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Collection Law in California

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Hiya Ad!!!

I posted this already, but since you started a new thread, I'll post it again, as it might be helpful to someone.

1785.30. Upon notification of the results of a consumer credit reporting agency's reinvestigation pursuant to Section 1785.16, an consumer may make a written demand on any person furnishing

information to the consumer credit reporting agency to correct any information which the consumer believes to be inaccurate. The person upon whom the written demand is made shall acknowledge the demand within 30 days. The consumer may require the consumer credit reporting agency to indicate on any subsequent reports issued during the dispute that the item or items of information are in dispute. If upon investigation the information is found to be inaccurate or incorrect, the consumer may require the consumer credit reporting agency to delete or correct the item or items of information within a

reasonable time. If within 90 days the consumer credit reporting agency does not receive any information from the person requested to furnish the same or any communication relative to this information from this person, the consumer credit reporting agency shall delete the information from the report.

Andi

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Article 2.6

Unfair Collection Practices

The law prohibits all debt collection practices that are

judicially determine d to be “unfa ir.”60 The law also

prohibit s certain practices on the legisla tively

expressed basis that they are unfair. The following

specific rules apply:

1. Physical force or criminal means. It is unlawful for a

collector to collect a debt by using physical force or any

criminal means to cause harm to the person, reputation or

property of anyone.61

2. Amount or charges lawfully owing. It is unlawful for

a collector to collect any amount (inclu ding any inte rest,

fee, charge, or expense incidental to the principal amount

of the debt) unless such amount is either: (a) expressly

authorized by the agreement between the debtor and the

origina l credito r, or (B) e xpress ly permitte d by statute.62

Attempts to collect “interest,” “service c harges,”

“collection charges,” “attorney’s fees,” “legal notice

fees” and other fees, charges or penalties, result in a

violation unless the charge is expressly authoriz ed by a

statute or a valid agreement between the parties.63 It is

also a violation to misrepresent a de bt’s character,

amount or legal status.64 For example, it is a violation to

attempt to collect a claim that is too old to be

enforceable.65

65: is referenced as:

65. In Kimber v. Federal Financial Corp. (M.D. Ala. 1987) 668

F.Supp. 1480, the court held that it is unfair under the federal

statute to file a time-barred collection suit against a consumer, and

that it is deceptive to even threaten to file such a suit.

Can this be taken to mean that you can't even try to attempt to collect a time-barred bill????

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ASSIGNED DEBTS:

... Hey look what I found.

CIVIL CODE

SECTION 1788.10-1788.17

1788.10. No debt collector shall collect or attempt to collect a

consumer debt by means of the following conduct:

(a) The use, or threat of use, of physical force or violence or

any criminal means to cause harm to the person, or the reputation, or

the property of any person;

(B) The threat that the failure to pay a consumer debt will result

in an accusation that the debtor has committed a crime where such

accusation, if made, would be false;

© The communication of, or threat to communicate to any person

the fact that a debtor has engaged in conduct, other than the failure

to pay a consumer debt, which the debt collector knows or has reason

to believe will defame the debtor;

(d) The threat to the debtor to sell or assign to another person

the obligation of the debtor to pay a consumer debt, with an

accompanying false representation that the result of such sale or

assignment would be that the debtor would lose any defense to the

consumer debt;

(e) The threat to any person that nonpayment of the consumer debt

may result in the arrest of the debtor or the seizure, garnishment,

attachment or sale of any property or the garnishment or attachment

of wages of the debtor, unless such action is in fact contemplated by

the debt collector and permitted by the law; or

(f) The threat to take any action against the debtor which is

prohibited by this title.

(d) The threat to the debtor to sell or assign to another person

the obligation of the debtor to pay a consumer debt, with an

accompanying false representation that the result of such sale or

assignment would be that the debtor would lose any defense to the

consumer debt;

Is this saying that not only can you not threaten to assign a debt, but also that the DEBTOR right to DEAL with the OC is protected. Therefore if you never pay a CA they are obligated under california law to return the debt to the OC.

???? Opinions please !!!!

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Here is some more information that I got from another site.

With regards to assignments: "Case law tells us that even though a creditor can legally assign an account to a collector, it is not enforceable unless the debtor agrees to the assignment. The collector has no standing to collect without your consent. The agreement can be established by making a payment to the collector. This is called "consideration."

In order for you to be obligated to any assignee, you must have derived some benefit from the assignee, or paid a bill to them, or signed a new written agreement (a novation). You must agree to the assignment or it is not enforceable.

The affirmative defenses include "accord and satisfaction," "statute of frauds (no contract in writing)," and "failure of consideration," for most of these types of cases. These defenses are to be used when the "debtor" is sued by one of the assignees (it doesn't matter if the original creditor ends up as one of the assignees).

The first is "failure of consideration" which means, there is no evidence that an agreement was made, no payment, no exchange of any benefit or detriment to any party. The second is "statute of frauds" which means there is no contract in writing between the parties. Because the original creditor never actually named the new collector as an assignee in the credit agreement, the assignee can never be a party to that agreement unless permitted by both the debtor and creditor.

The third used is "accord and satisfaction" which means the debt has been satisfied in full. The analogy is if you owed your neighbor $100 and a friend paid the debt for you and your neighbor accepted $75 in satisfaction of the debt, neither your friend nor your neighbor can sue you for the $25 because they accepted another amount in lieu of the original debt. It can also be called a "novation." This also happens because of an assignment. If a debt is assigned to a third party collector, it is no longer legally enforceable because the creditor has waived his standing or rights to collect. The same applies to the third party collector. No one can put himself in harms way (incur a debt knowingly and voluntarily) and then expect to be awarded damages for his losses.

In any case, these defenses don't need to be spelled out when addressing a collector (not the creditor) with a request for validation. The statute takes care of all that for you. Keep it simple. Most of these cases are won, in my opinion, because of the collector's poor record keeping and the incompetence of collector employees. I always recommend that you don't discuss a collection with anyone over the phone, but request that all correspondence about the dispute be done in writing. Always get the name, phone number and company name from the caller and tell them not to call you anymore. If they do,they can be fined by the FTC.

The credit history is another project. You can legally force the collectors and bureaus to remove those items, for the same reasons an assignee collector cannot enforce any collection. You may not be able to do the same with the orginal creditors unless you can prove they repudiated the debts or that there was some accord and satisfaction in the form of an insurance claim or write-off, as a consequence of the assignment."

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Please be advised that under the TILA section 15 a credit card account is legally defined as an "open" account.

The Act is in Title I of the Consumer Credit Protection Act and is implemented by the Federal Reserve Board via Regulation Z (12 C.F.R. Part 226).

Adsoft, can you give me a link or point me in the right direction where I can find TILA section ??? for an auto loan. Actually, I need to read the entire thing because I am a loan processor in California. I need this information to help my clients get into thier homes.

Thanks so very much for all of your hard work and for sharing so much information.

Lisa

Here you go sorry it took so long, have been working on some other areas:I can't keep up with all my threads.

http://www.ftc.gov/os/statutes/fcb/fcb.pdf

The TILA is harder to read than the other ACTS, its in PDF format and is not a easily outlined as the FDCPA and FCRA.

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Just to refire this quality old thread, has anyone pushed the issue of phone numbers in PRs?

Calif Civil Code Section 1785.16(d)(4) reads:

(4) a notice that, if requested by the consumer, a

description of the procedure used to determine the accuracy and

completeness of the information shall be provided to the consumer by

the consumer credit reporting agency, including the name, business

address, and telephone number of any furnisher of information

contacted in connection with that information,

Similar to Federal law, except that is doesn't make the phone number optional if I'm reading that correctly. I've gotten fax numbers or non-working phone numbers listed with my TLs in the past.

Thoughts?

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CA Civil Code §3294 states:

(a) In an action for the breach of an obligation not arising

from contract, where it is proven by clear and convincing evidence

that the defendant has been guilty of oppression, fraud, or malice,

the plaintiff, in addition to the actual damages, may recover damages

for the sake of example and by way of punishing the defendant.

Additionally:

(1) "Malice" means conduct which is intended by the defendant to

cause injury to the plaintiff or despicable conduct which is carried

on by the defendant with a willful and conscious disregard of the

rights or safety of others.

(2) "Oppression" means despicable conduct that subjects a person

to cruel and unjust hardship in conscious disregard of that person's

rights.

(3) "Fraud" means an intentional misrepresentation, deceit, or

concealment of a material fact known to the defendant with the

intention on the part of the defendant of thereby depriving a person

of property or legal rights or otherwise causing injury.

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It appears that those of us who live in California need to have a new statement on our mini Miranda during our initial contact with a CA. Here is the url for the new law that took effect on July 1.

http://www.leginfo.ca.gov/pub/bill/sen/sb_1001-1050/sb_1022_bill_20030902_chaptered.html

And here is the statement that needs to be included. I wonder who will be the first to sue over this not being included?

""The state Rosenthal Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act require that, except

under unusual circumstances, collectors may not contact you before 8 a.m. or after 9 p.m. They may not harass you by using threats of violence or arrest or by using obscene language. Collectors may not use false or misleading statements or call you at work if they know or have reason to know that you may not receive personal calls at work. For the most part, collectors may not tell another person, other than your attorney or spouse, about your debt. Collectors may contact another person to confirm your location or enforce a judgment. For more information about debt collection activities, you may contact the Federal Trade Commission at 1-877-FTC-HELP or www.ftc.gov."

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After reading the posts I failed to respond to, let me answer some of them so anyone else is not confused.

In California:

To restart the SOL, you must sign an agreement. Verbal does not count. A payment does not count.

It is illegal and a violation to even attempt collection of a timebarred debt. Violation of FDCPA 807(2)(a). Go to second post, click, scroll to page 9, Article 2.6, read, click on footnotes, and there it is.

An OC who has CO'd an account, but, is not attempting collection, does not have to respond to a DV. The FDCPA only applies to them if they are collecting their own debt. Second post, click, scroll to Article 2.

State law takes precedence over Federal if it offers more protection to the consumer. See FDCPA 816.

CCC 1788.17 is the best section to use as it covers most of everything else. In short, it wraps the package. Also, before filing suit, read both

Federal and State, and pick the best one. Honestly, State is the best as it is more restrictive than Federal. Plus, if you lose, you supposedly can file under the other, but, don't quote me on this, check first.

As to the continued reporting of a timebarred debt, it is legal to report up to the 7 year date. The CRA's sometimes delete at 6 yrs, 9 mths. It is said that IF the TL is verified by the reporting party to a CRA when theTL is disputed, it is considered continued activity. I fully agree with this, BUT, no decision has ever been made as to if it will hold up. Scroll through this thread as I think I placed it here where I showed the argument one could present in court to prove this. But, if I'm not mistaken, I began a seperate thread on this matter so we could discuss it. Let me know and I will gladly say it again.

As to using the SOL letter, there is no guarantee it will work. Some have had success while others, including myself, have not.

As to the SOL in California, if you live here, the SOL here is the one you use, not the other state. To be considered a resident, it is said that all you need to do is put a roof over your head and obtain utilities. The only way a CA can use the original state's SOL is IF you moved back there and they can prove you took up residence. Then they can ask that the SOL be tolled.

If I missed one, do not hesitate to ask again.

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Query on this sticky...

FDCPA 816, as you say, means state law offers greater protection from federal when there is a conflict. What if two state laws on SOL conflict?

Example - Electric bill is reported delinquent in Michigan. Consumer moves to Cali & disputes account that has been assigned to CA. CA removes account from CRA's. Consumer is happy.

OC then sells account to JDB (A$$et) this past January, and JDB now begins to collect on the same debt when the consumer now resides in Cali..

Mich has 6 year SOL on written contracts. Cali has 4. Account first went delinquent in June 2000. Original CA started to try and collect in Nov. 2000.

Which SOL controls? Cali or Mich.? Also, if JDB sues to collect, will they sue in Mich or Cali? I believe FDCPA states that suit must be filed either in the jurisdiction where the contract was signed or where defendant lives. I live in Cali, but the utility service was provided in Mich....

Also, is there any case law to support that if A$$et validates the account when I dispute with CRA, then this constitutes an attempt to collect on the debt?

Cheers,

MP

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****NOTE that this Sticky has been pruned and unrelated posts are now in another thread called 'California Collection Thread'****

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