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New Bill SB 233 on Fair Debt Buying Practices goes into place January 1, 2014
Have you ever lost a commission because your client has very old debt that resurfaces long after the statute of limitations?
Many debt collectors "buy and resell" debt, time and time again in the hopes of collecting by continuing to "roll the debt forward".
The new law applies to consumer debt "sold or resold" on or after Jan. 1, 2014 but can cerainly be used to create pressure on collectors attempting to unfaily pressure consumers prior to Jan 1st.
"Debt buyers" (i.e. collection agencies and attorneys) must have IN THEIR POSSESSION proof they are:
a) The sole owner of the debt.
b) The amount of account balance at charge off.
c) Date of default or last payment.
d) Name and address of both the creditor and debtor at the time the debt was charged off.
e) A complete chain of title on the account if bought and sold multiple times. f) The debt buyer must make all documents without charge, upon request, within 15 days.
g) All settlement agreements by a debt buyer who receives a payment must provide a receipt or statement.
h) If the debt is legally too old to file a lawsuit, but still can be reported to the credit bureaus, 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, we may continue to report it to the credit reporting agencies as unpaid for as long as the law permits this reporting."
i) If the debt is older than the statute of limitations (4 years in Ca.) and credit bureau reporting (7 yrs.) 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."
CLICK HERE TO VIEW BILL SB233
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