An interesting bill was recently proposed by representative Mia Love from
Utah amending the Fair Debt Collection Practices Act (“FDCPA”)
and making several pro-consumer changes. The bill was only recently introduced
and is probably in part a response to the recent Supreme Court decision
of Henson v. Santander which ruled upon the definition of a “debt
collector” under the FDCPA. So, what does the bill change?
Debt Collectors: The bill dramatically broadens the definition of what a debt collector
is and thus expands the scope of who is subject to the FDCPA. Right now
a debt collector is defined in the FDCPA as someone who uses any instrumentality
of interstate commerce to collect debts AND falls into several other categories
related to debt collection. The bill would remove the “and”
requirement. Meaning that people persons who do not use the instruments
of interstate commerce could be subject to FDCPA liability.
Government Notice: It is not uncommon for governmental agencies who are owed debts to later
assign the rights to collect upon the debts to private companies. The
bill would create a requirement under the law that before any agency does
so, the agency itself must notify the debtor of the assignment. That would
eliminate the scenario now where consumers are often advised by the company
to whom the debt was assigned. A debtor might reasonably not trust some
random company they have never heard of which claims they bought a debt.
Now the governmental agencies would have to inform them, if the bill passes that is.
Reasonable Collection Costs: Some contracts allow for collection fees. This would limit the amount
of fees that debt collectors could receive to “reasonable”
fees and not more than 10% of the amount of the debt. Enshrining that
in law would be a huge win for members of the public and a huge blow to
There are a few other provisions but those are the most important ones.
The bill was only just introduced and Washington is highly politically
charged at the moments so the bill probably won’t pass but the changes
it proposes would certainly help strengthen the rights of the public against
harassment by debt collectors.
If you would like to read more about the FDCPA and consumers fighting back
against debt collectors, you can find other stories on our
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers
with their debt problems,
contact us to see how we may be able to help you.
This document has been provided for informational purposes only and is
not intended and should not be construed to constitute legal advice. Please
consult your attorney in connection with any legal issues related to the
matters discussed in this article as the applicability of state, local
and federal laws may vary.