Four Year Statute of Limitations For Store Credit Cards

A statute of limitations sets forth the time that a plaintiff has to file a lawsuit on his claim. These statutes vary from state to state. For example, a New Jersey personal injury victim generally has two years from the date of the accident to file a lawsuit, or is barred from making a claim thereafter.

For breach of contract, the statute of limitations is generally six years. This would include contract cases and also loan and credit transactions such as bank loans and credit cards. However, in a recent published opinion (Midland Funding v. Thiel) in August 2016, the New Jersey Appellate Division held that the statute of limitations for suing on store credit cards was four years, not six. In other words, a Target customer for example purchasing merchandise on a Target credit card but not paying his statement would have to be sued within four years of the payment default.

The court based this decision on Article 2 of the New Jersey Commercial Code, which prescribes a four year statute of limitations for suits to recover payment for goods sold.

This decision is not applicable to a Visa or Mastercard or other credit card which is not limited to a particular store chain.

Because the creditor proceeded with the lawsuit on store credit card debt that was more than 4 years old, the court found that the creditor had violated the Fair Debt Collection Practices Act (FDCPA), and therefore was liable to the customer for legal fees and statutory damages.

If you are the target of collection action, it is important to determine the date of your default and to calculate whether a creditor lawsuit is out of time. Under the FDCPA, that information can be requested from the creditor. If your transaction involves a store credit card with a date of default more than four years old, you would have a complete defense to any lawsuit, and the possibility of recovering legal fees and statutory damages if the creditor proceeds with litigation. Call us today for a consultation.

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