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Fair Debt Buying Practices Act passes assembly.
The California General Assembly Monday unanimously passed a bill
that require debt buyers in the state to have in their possession a long
list of account information before debt collection efforts can begin. The
new law also mandates specific disclosure language debt buyers must use in
collection communications.
Titled the Fair Debt Buying Practices Act, California SB 233
passed the Assembly Monday on a 72-0 vote. In late May, the bill passed the
state's Senate on a 36-0 unanimous vote. The measure now goes to California
Governor Jerry Brown for his signature. Its provisions would take place on
January 1, 2014.
Most significantly, the bill places a long list of requirements on
purchasers of charged-off consumer debt that must be met before collection
efforts can begin. Debt buyers must have in their possession proof that they
are the sole owner of the debt, the account balance at chargeoff, date of
default or last payment, name and address of both the creditor and debtor,
and a complete chain of title on the account if bought and sold multiple
times.
There is also a long list of requirements for initial
communications with a debtor. In addition to explicitly stating that the
consumer has the right to request the information outlined above, debt
buyers must disclose certain rights to consumers regarding time-barred debt.
If a debt is too old to file suit, but still within credit
reporting thresholds, the debt buyer must use the following language in its
first written communication:
"The law limits how long you can be sued on a debt. Because of the age of
your debt, we will not sue you for it. If you do not pay the debt, [insert
name of debt buyer] may [continue to] report it to the credit reporting
agencies as unpaid for as long as the law permits this reporting."
If the debt is beyond both the reporting and legal statute of
limitations, the following must be included in the letter:
"The law limits how long you can be sued on a debt. Because of the age of
your debt, we will not sue you for it, and we will not report it to any
credit reporting agency."
The Fair Debt Buying Practices Act also sets formal requirements
for the information presented as evidence in a debt collection lawsuit and
bars a debt buyer from selling an account that has been settled for less
than the full amount owed.
http://tinyurl.com/nxwfozx
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green
Attorney at Law
Fitzgerald & Green
1010 E. Union St. Ste. 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
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