The California Assembly passed legislation, the Fair Debt Buyers Practices Act, to regulate the activities of debt-buyers. "Debt buyer" is defined in the Act as a person or entity that is regularly engaged in the business of purchasing charged-off consumer debt for collection purposes. Among the many consumer protections in the Act, debt buyers would be prohibited 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 and the name and address of the creditor at the time the debt was charged off. Notably, the Act prohibits a debt buyer from initiating a suit to collect a debt if the statute of limitations on the cause of action has expired. If signed into law by the governor, the provisions of the Act would apply to consumer debt sold or resold on or after January 1, 2014.
Alert July 09, 2013