Protecting the Rights of Consumers For Over 25 Years

Question: What is my option if the agency wants to take me to the court or pay $250 to settle out of court because they told that I had a check bounce in 2008? Received a call from a collection agency that said I had a $25 check bounce in 2008. I never got any letters saying that my check was returned by the bank. During that time period, the bank changed hands and was bought out by another bank. I was never contacted in 2008 and now this agency said it would take me to court or pay a $250 to settle out of court.

Answer: The statute of limitations for the civil penalty is 2 years in Illinois. The statute of limitations for the $25 check is three years. A separate statute of limitations applies to the underlying transaction in connection with which the check was issued. If it was payment for the sale of goods the statute is four years, if it was payment for some other transaction it was five years. However, it can be reported on a credit report for 7.5 years.

The demand for the penalty after the statute has run appears to be violate the Fair Debt Collection Practices Act