Go New Jersey! Now that the sub-prime crisis is at its height, you know debt collectors are getting more aggressive. We posted before that the FTC’s report on collection agency agency consumer complaints showed a dramatic increase in unethical practices of the collection agency industry.

FTC report: http://www.ftc.gov/os/2008/03/P084802fdcpareport.pdf
Link to Bill: http://www.njleg.state.nj.us/2008/Bills/A2500/2493_I1.HTM

A timely bill has been introduced in the New Jersey State Legislature. A summary is given below.

ASSEMBLY, No. 2493
STATE OF NEW JERSEY
213th LEGISLATURE

INTRODUCED MARCH 10, 2008
SYNOPSIS “New Jersey Fair Debt Collection Practices Act.”

This bill establishes the “New Jersey Fair Debt Collection Practices Act.” Generally, the bill eliminates abusive practices in the collection of consumer debts, promotes fair debt collection and provides consumers with an avenue for disputing and obtaining validation of debt information in order to ensure that information’s accuracy. The bill creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the bill.

The bill defines a “debt collector” as any person who by any direct or indirect action, conduct, or practice, collects or attempts to collect an obligation that is owed or due, or alleged to be owed by or due from a debtor in this State as a result of a consumer transaction. The term “debt collector” includes, but is not limited to, an attorney, and any person working under the direction or control of an attorney, who regularly collects or attempts to collect, directly or indirectly, a debt that is owed or due, or alleged to be owed by or due from a debtor in this State as a result of a consumer transaction; but does not include: any officer or employee of the United States or any state, or agencies or instrumentalities of any state, to the extent that collecting or attempting to collect a debt is in the performance of any official duties; or any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt.

The bill prohibits, with limited exceptions, a debt collector from communicating with a debtor under the following circumstances:

· At any time or place known or should be known to be inconvenient to the debtor, presumed to be no earlier than 8 a.m. and no later than 9 p.m., local time at the debtor’s location;

· If the debt collector knows that the debtor is represented by an attorney with respect to that debt and can readily ascertain that attorney’s name and address; or

· At the debtor’s place of employment, except that:

o The debt collector may send a single letter to the debtor at the debtor’s place of employment if the debt collector has been unable to locate the debtor at the debtor’s residence; and

o The debt collector may telephone the debtor at the debtor’s place of employment if the debt collector has been unable to contact the debtor at his residence. The debt collector, however, may not make more than one telephone call per month to the debtor at his place of employment.

The bill also prohibits a debt collector from communicating with the debtor by means of a written communication, including on an envelope, which readily displays or conveys to any person, other than the recipient debtor, any information about the debtor’s debt or that uses any language or symbol that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt.

The bill also prohibits, with limited exceptions, a debt collector from communicating:

· Information regarding a debt to any member of the debtor’s family prior to obtaining a judgment against the debtor, except where the purpose of the communication is to locate the debtor; and

· To any person, any list of debtors that discloses the nature or existence of a debt, commonly known as “deadbeat lists,” or in advertising any debt for sale, by naming the debtor.

The bill does allow a debt collector to communicate with any person other than the debtor for the purpose of acquiring location information about the debtor, provided that the debt collector meets certain requirements, including, but not limited to, identifying himself and not stating that the debtor owes any debt.

The bill also requires that, within five days after the initial communication with a debtor, a debt collector must, unless the following information is contained in the initial communication or the debtor has paid the debt, send the debtor a written notice containing: the amount of the debt owed to the creditor; the name of the creditor to whom the debt is owed; a statement that unless the debtor, within 30 days after receipt of the notice, disputes the validity of the debt or any portion of the debt, the debt will be assumed to be valid by the debt collector; a statement that if the debtor notifies the debt collector in writing within the 30-day period that the debt, or any portion of the debt, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the debtor; and a statement that, upon the debtor’s written request within the 30-day period, the debt collector will provide the debtor with the name and address of the original creditor, if different from the current creditor.

The bill also requires a debt collector to stop all collection activities upon receipt from a debtor of the debtor’s written statement that the debtor claims to be the victim of identity theft with respect to the specific debt being collected by the debt collector, consisting of either: the Federal Trade Commission’s standardized ID Theft Affidavit, or a written statement that certifies that the representations are true, correct, and contain no material omissions of fact to the best knowledge and belief of the debtor.

The bill prohibits a debt collector from:

· Engaging in any conduct, the natural consequence of which is to harass, oppress, intimidate or abuse any person in connection with the collection of a debt;

· Using any false, deceptive or misleading representation or means in connection with the collection of any debt;

· Using unfair or unconscionable means to collect or attempt to collect any debt;

· Reporting solely in his own name any credit or debt information to a consumer reporting agency;

· Reporting to a consumer reporting agency any credit or debt information regarding overdue medical expenses owed by a parent for a minor child if the debt collector is notified orally or in writing of the existence of a court order or administrative order identifying another person as the party responsible for payment of medical expenses for that minor child;

· Threatening criminal proceedings or other legal action if the debt collector does not intend to pursue such action; and

· Collecting any amount, including interest, fees, charges, or expenses, incidental to the principal obligation, unless the amount is expressly authorized by the agreement creating the debt or permitted by law.

A violation of this bill’s provisions is an unlawful practice and a violation of the consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.). Violations of the consumer fraud act are punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, a violation may result in cease and desist orders issued by the Attorney General, and the awarding of treble damages, attorneys’ fees and costs of suit to the injured party.

The bill also provides that a violation of the federal “Fair Debt Collection Practices Act,” Pub.L.95-109 (15 U.S.C. s.1692 et seq.) constitutes a violation of this bill.

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