Statute of limitations leads to lawsuit

A Michigan-based debt collection agency used deceptive practices to coax debtors into reviving old debt that had gone beyond a statute of limitations. As a result, Asset Acceptable has agreed to pay the federal government $2.5 million in a proposed settlement. The firm allegedly misled hundreds of people to believe they owed money, many times for debt that had gone years without being collected. If debt exceeds a state's statute of limitations, collectors can only ask for the money - but not sue for it, MSNBC reports. However, KCPQ-TV reports that AA trained its employees to ask for partial payments from debtors, which essentially restarts the clock on their debt, allowing them to be sued. The company also allegedly used the threat of negative credit reporting to  encourage payment, saying the debt could tarnish a person's credit report for employment and that making a payment would wipe it away. The news source cites the example of one victim, police officer Joey Russo. AA repeatedly contacted him over a five-year period to pay $16,000 for a car note and a gym membership he never had.  "The older the debt, the more likely it is that there will be problems with its accuracy because substantiation of the initial debt may be lacking," David Vladeck, director of the FTC's Bureau of Consumer Protection, told MSNBC.