If you are being hounded by a debt collector over an old debt and you live in California, you need to pay attention to the Fair Debt Buying Practices Act. Under that new California law the buyer of old debts who is now attempting to collect on the debt has certain hurdles to jump over before you have to pay.
But consumers may not realize the collectors and debt buyers have to produce certain documents or the debt is uncollectible or even that you might not be able to be sued over the old debt.
The law applies to debt which was sold or resold after January 1, 2014 and consumers should receive a notice when included debt under the law is attempted to be collected. This notice should read:
“You may request records showing the following: (1) that [insert name of debt buyer] has the right to seek collection of the debt; (2) the debt balance, including an explanation of any interest charges and additional fees; (3) the date of default or the date of the last payment; (4) the name of the charge-off creditor and the account number associated with the debt; (5) the name and last known address of the debtor as it appeared in the charge-off creditor’s or debt buyer’s records prior to the sale of the debt, as appropriate; and (6) the names of all persons or entities that have purchased the debt. You may also request from us a copy of the contract or other document evidencing your agreement to the debt. A request for these records may be addressed to: [insert debt buyer’s active mailing address and email address, if applicable].”
If a collector cannot provide this information or the debt is beyond the statute of limitations then the debt owner or collector acting as their agent would not be able to file a lawsuit to collect the debt. Essentially, they’d be all bark and no bite.
The law requires collectors or bad debt owners to tell consumers when they can’t sue and requires them to inform consumers, “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 older than seven years delinquent and will not appear on the consumer credit report, the collector must tell the consumer, “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.”
Debt owners or collectors who violate this law may be subject to huge fines. Courts may award actual damages, statutory damages, and attorney’s fees and costs and even have the discretion to levy civil penalties of up to $500,000 in class actions brought against debt buyers engaging in patterns of willful noncompliance with the law. Because of these potential fees, local consumer attorneys may be more willing to take on these cases on a contingency.
Fair Debt Buying Practices Act Notifications
To get into the nitty-gritty of what the collector or bad debt owner must provide the consumer, let’s turn to the law. It says:
A debt buyer shall not make any written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer possesses the following information:
- That the debt buyer is the sole owner of the debt at issue or has authority to assert the rights of all owners of the debt.
- The debt balance at charge off and an explanation of the amount, nature, and reason for all post-charge-off interest and fees, if any, imposed by the charge-off creditor or any subsequent purchasers of the debt. This paragraph shall not be deemed to require a specific itemization, but the explanation shall identify separately the charge-off balance, the total of any post-charge-off interest, and the total of any post-charge-off fees.
- The date of default or the date of the last payment.
- The name and an address of the charge-off creditor at the time of charge off, and the charge-off creditor’s account number associated with the debt. The charge-off creditor’s name and address shall be in sufficient form so as to reasonably identify the charge-off creditor.
- The name and last known address of the debtor as they appeared in the charge-off creditor’s records prior to the sale of the debt. If the debt was sold prior to January 1, 2014, the name and last known address of the debtor as they appeared in the debt owner’s records on December 31, 2013, shall be sufficient.
- The names and addresses of all persons or entities that purchased the debt after charge off, including the debt buyer making the written statement. The names and addresses shall be in sufficient form so as to reasonably identify each such purchaser.
- A debt buyer shall not make any written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer has access to a copy of a contract or other document evidencing the debtor’s agreement to the debt. If the claim is based on debt for which no signed contract or agreement exists, the debt buyer shall have access to a copy of a document provided to the debtor while the account was active, demonstrating that the debt was incurred by the debtor. For a revolving credit account, the most recent monthly statement recording a purchase transaction, last payment, or balance transfer shall be deemed sufficient to satisfy this requirement.
- A debt buyer shall provide the information or documents identified in subdivisions (a) and (b) to the debtor without charge within 15 calendar days of receipt of a debtor’s written request for information regarding the debt or proof of the debt. If the debt buyer cannot provide the information or documents within 15 calendar days, the debt buyer shall cease all collection of the debt until the debt buyer provides the debtor the information or documents described in subdivisions (a) and (b). Except as provided otherwise in this title, the request by the debtor shall be consistent with the validation requirements contained in Section 1692g of Title 15 of the United States Code. A debt buyer shall provide all debtors with whom it has contact an active postal address to which these requests can be sent. A debt buyer may also provide an active email address to which these requests can be sent and through which information and documents can be delivered, if the parties agree. – Source
If you live in California and you are being pursued for an old debt by someone you don’t recognize, it might make sense to contact a lawyer licensed in California and find out what your rights are. You may be eligible to receive compensation if the collector is breaking the law.
Hopefully more laws like this will be enacted by more states or on a federal level.
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