Lawsuit Claims Asset Recovery Solutions, Navient Misrepresented Legal Status of Consumer’s Debt

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Asset Recovery Solutions, LLC, (ARS) and Navient Solutions, LLC are defendants in a proposed class action alleging the defendants sent an unlawful collection letter that falsely implied the two companies have "chosen" not to sue the plaintiff over her time-barred debt when they were legally unable to do so. 

According to the lawsuit, the plaintiff’s debt to Independent Bankers Bank was purchased by Navient Solutions, who then contracted the collection services of ARS. The defendants allegedly sent the plaintiff, a South Carolina consumer, a letter in November 2017 that stated, in part:

“The law limits how long you can be sued on a debt. Because of the age of your debt, Navient will not sue you for it and Navient will not report it to any credit reporting agency.”

The complaint argues that this language is deceptive because it suggests the defendants have opted not to take legal action against the plaintiff “instead of the true fact that neither Defendant Navient, nor Defendant ARS, nor any subsequent creditor/collector can file a lawsuit.” 

Further, the suit claims that this language could lead the “unsophisticated consumer” to believe that the defendants can change their minds and sue in the future, which may coerce a payment out of the alleged debtor. The letter also failed to “disclose that the previously-lapsed statute of limitations to file a lawsuit to collect the debt will recommence upon payment by Plaintiff,” the case claims. 

The lawsuit argues that the letter’s alleged “misleading statements and material omissions” violated the plaintiff’s rights under the Fair Debt Collection Practices Act (FDCPA).