Tuesday, 16 Apr 2024

U.S. watchdog to propose banning debt collectors from threatening lawsuits over expired debt

WASHINGTON (Reuters) – The U.S. consumer watchdog will propose banning debt collectors from threatening to sue borrowers for debt that has legally expired, an agency official said on Friday.

The Consumer Financial Protection Bureau will also propose establishing a national standard for how debt collectors must inform borrowers when they cannot be sued for expired debt. The proposed disclosure would also inform borrowers regarding actions they could take that would legally revive so-called “time-barred” debt.

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