An important victory for consumers alleged to owe credit card debt, a federal court decided that the Pennsylvania Borrowing statute, 42 Pa. C.S.A. 5521, applies to debt collection lawsuits filed against Pennsylvania consumers by out-of-state banks.

Plaintiff defaulted on a consumer credit card issued by Discover Bank. Discover Bank hired the debt collection law firm and defendant, Stock & Grimes of Jenkintown, Pennsylvania, to file a debt collection lawsuit against the consumer. Stock & Grimes filed the lawsuit about 3 years and 8 months after the 3-year anniversary of the consumer’s default.

Plaintiff defended the state-court action alleging that Pennsylvania’s standard 4-year statute of limitations for breach of contracts did not apply to the collection lawsuit because the Borrowing Statute imported Delaware’s shorter, 3-year statute of limitations for breach of contracts. The state-court action settled before the PA court could decide her defense.

After suing Stock & Grimes in the federal action alleging a violation the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692f, the federal court ruled that the filing of the collection lawsuit almost 4 years after plaintiff’s default was a Kimber violation of the FDCPA. A Kimber violation occurs when a consumer debt collector sues a consumer after a debt has become time-barred by the applicable statute of limitations.

The case is scheduled for a jury trial to determine plaintiff’s damages in July 2012.

Consumer Litigation Group, Plaintiff's attorneys, can be contacted at www.ConsumerLitigators.com.