Fremont State Senator Introduces Debt Collection Bill

SACRAMENTO, CA —The state Senate this week approved legislation written by Sen. Bob Wieckowski (D-10th-Fremont) designed to ensure debt collectors working with assigned debt are subject to the same standards as collectors working with debt that has been purchased, according to Wieckowski's office.

The bill, SB 531, was approved with bipartisan support in the Assembly and now heads to Gov. Gavin Newsom for his consideration.

"SB 531 will raise the standards for collectors working with assigned debt and make them more accountable to consumers, just as we do with collectors working with debt that is sold," Wieckowski, a member of the Senate Judiciary Committee, said in a statement. "It will eliminate the lax oversight of collectors who do not operate under the Fair Debt Buying Practices Act.

"Abusive collection tactics must be eliminated and providing consumers with more transparency about their debt will address the complaints about collectors that legal service providers are hearing from their clients."

According to a release from Wieckowski's office, the legislature enacted the Fair Debt Buying Practices Act in 2013 after numerous complaints about collections against the wrong person, targeting debt that already had been paid and attempts to collect incorrect debt amounts.

The 2013 act required debt buyers - that have debt sold to them - to have proof of ownership, and it allowed consumers to request that proof. The law also required disclosure of the amount of debt that is owed, fees or interest and the date of the last payment, according to sources.

However, these same protections for consumers did not exist for debt collectors that have been assigned debt, which is common for hospital and medical debts, according to Leigh Ferrin, director of litigation and pro bono at the Public Law Center.

With SB 531, the same standards will be applied to debt collectors who have purchased debt and those that have been assigned debt. The latter now will be forced to have proof of authority to collect the debt, and consumers will be able to request that proof and other basic information about the debt.

"(The new law) will allow debtors to better understand the debt collection process," Ferrin said. "The protections of the Fair Debt Buying Practices Act do not apply (to debt collectors who have been assigned debt), and the collector is not required to give (the consumer) basic information about their debt.

"SB 531 will change that and give people the information they need to resolve their debt issues more quickly."

According to Wieckowski, SB 531 also is supported by the California Low-Income Consumer Coalition, Center for Responsible Lending, Neighborhood Legal Services of Los Angeles County and the Western Center on Law and Poverty.