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New Weapon Against Abusive Third-party Debt Colllectors

California’s Fair Debt Buying Practices Act is now effective, as of January 1, 2014.

It applies to any consumer debt sold or resold on or after January 1, 2014.

The Fair Debt Buying Practices Act restricts the written statements debt buyers can make to consumers in attempting to collect a debt, and prohibits a debt buyer from making any written statement to a consumer unless the debt buyer has access to a copy of the contract or other document evidencing the consumer’s agreement to the debt (which includes the most recent monthly statement recording a purchase transaction).

Among other remedies, consumers can make a written request for information regarding the debt, and the debt buyer must provide the requested information within 15 days or it must cease collections until it gets the information. A consumer’s right as to the request for information must be disclosed to the consumer by the debt buyer in the debt buyer’s first written communication with the consumer.

If a debt buyer brings a lawsuit to collect on the debt, the third-party debt buyer must make certain allegations in the complaint, and attach a copy of the contract or other document evidencing the consumer’s agreement to the debt.

Importantly, the Fair Debt Buying Practices Act allows for consumers to sue debt buyers who violate the law. Consumers (you) can sue for statutory penalties of $100 to $1,000, and the law provides for class actions, in which one consumer can sue on behalf of other consumers. Consumers also can recover their reasonable attorney’s fees and costs if they prevail, allowing consumer rights lawyers, like our firm, to bring viable cases on a contingency basis – meaning that we advance all of the costs and the consumer pays nothing for our services, since we will hope to recover those amounts from the debt buyer at the end of the case.

Please contact me right away if you have been sued by a debt buyer to see if I can help you.

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Estate Planning Attorney Eric Ridley