Lawsuit: Transworld Systems Failed to Disclose Debt’s Legal Status

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Transworld Systems Inc. is on the receiving end of a proposed class action lawsuit that claims it violated the Fair Debt Collection Practices Act (FDCPA) by neglecting to inform a New York consumer that the statute of limitations on her debt may have expired. According to the complaint, the defendant sent the plaintiff a collection letter demanding payment on a defaulted student loan with a “Default Date” of July 1, 2011. The suit alleges that the debt was time-barred by New York’s six-year statute of limitations, meaning the plaintiff could not be sued over it. The defendant’s letter, however, made no mention of the debt’s legal status, according to the suit, and failed to inform the plaintiff that any partial payment could renew the statute of limitations, an alleged violation of New York state law and the FDCPA.