California SB 233, Fair Debt Buying Practices Act

[doublethefun9941]

 

UPDATE: Fair Debt Buying Practices Act

Straight of the State Website 

 

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB233

 

 

 

* The original post from May 2013 begins below. 

 

 

Here is a copy of the new California SB 233, Fair Debt Buying Practices Act.

 

http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0201-0250/sb_233_bill_20130515_amended_sen_v96.pdf

 

 

 

It was approved by the California Senate 36-0. Most likely it still has to be looked at by the California General Assembly so it not a sure thing yet. The law if approved would go into effect January, 1 2014. Included is a brief description of the requirements which came straight from the bill posted above. Mostly about sold debt, can't tell if it applies to original creditors. 

 

 

 

 

 

This bill would enact the Fair Debt Buying Practices Act, which

would regulate the activities of a person or entity that has bought

charged-off consumer loans debt, as defined, for collection purposes

and the circumstances pursuant to which the person may bring suit. The

bill would apply to consumer debt sold or resold on or after January 1,

2014. The bill would prohibit a debt buyer, as defined, from making

any written statement in an attempt to collect a consumer debt unless

the debt buyer possesses information that the debt buyer is the sole

owner or is authorized to assert the rights of all owners of the specific

debt at issue, the debt balance, as specified, and the name and address

of the creditor at the time the debt was charged off, among other things.

The bill would require the debt buyer to make certain documents

available to the debtor, without charge, upon receipt of a request, within

15 days. The bill would require that a specified notice be included with

the debt buyer’s first written communication with the debtor. The bill

would require all settlement agreements between a debt buyer and a

debtor to be documented in open court or otherwise in writing and

would require a debt buyer who receives a payment on a debt to provide

a receipt or statement containing certain information. The bill would

prohibit a debt buyer from initiating a suit to collect a debt if the statute

of limitations on the cause of action has expired. The bill would

prescribe penalties for each violation of the act and would provide that

its provisions may not be waived. The bill would require a debt buyer

bringing an action on consumer debt to include certain information in

his or her complaint. The bill would prohibit an entry of judgment in

favor of a plaintiff debt buyer unless business records authenticated

through a sworn declaration and relating to the debt and ownership of

it, among other things, are submitted by the debt buyer to the court, and

would permit a court to dismiss a debt buyer’s action to collect with

prejudice if this information is not provided or if the debt buyer fails

to appear or is not prepared on the date scheduled for trial.

(2) Existing law establishes a process for the enforcement of money

judgments and requires a levying officer to provide certain documents

and information to a judgment debtor and to a designated employer in

connection with wage garnishment. Existing law permits a process

server also to serve an earnings withholding order on an employer and

requires that the process server also serve certain documents at this

time. Existing law requires an employer who is served with an earnings

withholding order to provide certain documents to an employee who is

a judgment debtor.

This bill would require, in the circumstances described above, that a

copy of the form that the judgment debtor may use to make a claim of

exemption and a copy of the form used to provide a financial statement

also be provided.

 

 

A wonderful part of this is that they must now publicly admit what they settled the debt for. 

Also, "The bill would require a debt buyer bringing an action on consumer debt to include certain information in his or her complaint." That would sure be a nice change of pace.

 

The law has its good an bad points and definately helps those who are willing to fight. it Makes the debt validation process a lot more meaningful and people could really make a JDB life miserable before trial if they don't have the required docs. Hopefully we will get more documents in the complaint which which make it easier to file an answer and start useful BOP/discovery quicker because we have a better idea about what docs they have. 

 

However, does this bill really helps consumers, especially the 95% that don't answer the complaint. It does not address sewer service of the Compliant, and the law specifically says "The bill would prohibit an entry of judgment in favor of a plaintiff debt buyer unless business records authenticated through a sworn declaration and relating to the debt and ownership of it, among other things, are submitted by the debt buyer to the court, and would permit a court to dismiss a debt buyer’s action to collect with prejudice if this information is not provided or if the debt buyer fails to appear or is not prepared on the date scheduled for trial." Its nice they are requiring more information to get a default judgment but the declaration can still likely be just as bad as it always has. Will this law substantially reduce the amount of default judgments in this state. Who knows.

 

But still it is a step in the right direction. 

 

 

 

Also, here are two articles about how the FEDS are expanding the robosigning probe against Chase  as well as California Attorney General Suing Chase for the same reasons. 

 

http://thinkprogress.org/economy/2013/05/28/2069421/bank-misconduct-credit-card-debt-beyond-jpmorgan/

 

http://ar-management.tmcnet.com/topics/accounts-receivable-management/articles/337948-california-sues-jp-morgan-chase-over-debt-collecting.htm

 

 

I am not an attorney

 

[Christine]

Thanks for posting and I'll be following this law.

[bravoflaca2000]

THANK YOU .Great post on the news with chase . I have one with midland on chase card pending on my credit report . They wont sue of course its less than 600.00 dollars and not worth it to them.

BUT STUFF LIKE THIS IS GREAT TO KNOW!!!!

[spacemandave]

The devil is in the details. You need to make sure the lobbyists don't make it easier for a JDB to prove a debt in court.

[SkippieB]

Enrolled  July 02, 2013 Passed  IN  Senate  May 24, 2013 Passed  IN  Assembly  July 01, 2013 Amended  IN  Senate  May 15, 2013 Amended  IN  Senate  April 22, 2013 Amended  IN  Senate  April 01, 2013

 

Passed in Assembly July 1st

 

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB233

 

Carol-Lynn

[doublethefun9941]

Thanks SkippyB for the post. That is great news. 

 

 

 

 

 

I am not an attorney

[SkippieB]

It's a start but if I'm reading it right (see below) all they need to attach to the complaint is the final billing statement to satisfy 1788.58 for a revolving credit account.  

 

My question is a charged-off debt considered to be revolving credit account.

 

 

1788.58. In an action brought by a debt buyer on a consumer debt:

 

 A copy of the contract or other document described in subdivision ( of Section 1788.52, shall be attached to the complaint.

 

1788.52

 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.

 

 

Carol-Lynn

[doublethefun9941]

Chase significantly reduces the amount of debt it sells to JDB's.

 

http://www.americanbanker.com/issues/178_126/chase-halts-card-debt-sales-ahead-of-crackdown-1060326-1.html?zkPrintable=1&nopagination=1

 

 

I am not an attorney

[doublethefun9941]

California Codes 1788-1788.3

 

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=civ&group=01001-02000&file=1788-1788.3

 

Fair Debt Buying Practices Act

Straight of the State Website

 

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB233

 

 

I am not an attorney

[doublethefun9941]

Found a great site that has hundreds of examples of Cardmember Agreements from many different companies. 

 

http://www.consumerfinance.gov/credit-cards/agreements/

 

 

 

I am not an attorney