Assemblymen Fight Debt Collection Practices

TRENTON – Legislation sponsored by Assemblymen John J. Burzichelli, Wayne P. DeAngelo, Paul Moriarty and the First District’s Matthew W. Milam to combat harassing consumer debt collection practices was released Thursday, June 4 by an Assembly committee.
The “New Jersey Fair Debt Collection Practices Act” would eliminate abusive debt collection practices and provide consumers a way to dispute and validate debt information to ensure that information’s accuracy.
“We’re not looking to halt efforts to try to collect a debt,” said Milam (D-1st). “What we’re doing here is putting a stop to harassing, oppressing, intimidating and abusive conduct by those collecting debts.”
The bill would prohibit, with limited exceptions, a debt collector from communicating with a debtor:
· 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.;
· If the debt collector knows 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 under certain circumstances.
The bill would also prohibit a debt collector from communicating with the debtor by a written communication that readily displays to anyone other than the recipient any information about the debt or uses any language or symbol indicating debt collection.
The bill would also prohibit, with limited exceptions, a debt collector from communicating:
· Information regarding a debt to any family member before obtaining a judgment against the debtor,
except to locate the debtor; or
· A list of debtors that discloses the nature or existence of a debt, commonly known as a deadbeat
list; or
· The name of a debtor in advertising any debt for sale.
The bill also would requires that, within five days after the initial communication with a debtor, a debt collector send the debtor a written notice containing information about the debt, the identity of the creditor, how to dispute the debt and that the debt collector will obtain verification of the debt if it is disputed.
The bill would also require a debt collector to stop all collection activities upon receipt of a written statement from the debtor claiming they were the victim of identity theft, which must include a copy of the police report and either the Federal Trade Commission’s standardized ID Theft Affidavit or a written certification statement.
The bill would prohibit a debt collector from:
· Engaging in conduct that is harassing, oppressing, intimidating, or abusive;
· Using false, deceptive, or misleading representations or means;
· Using unfair or unconscionable means;
· Reporting any information regarding overdue medical expenses for a child to a consumer reporting agency if the debt collector is notified of a court or administrative order identifying another person as responsible for payment of those expenses;
· Threatening criminal proceedings or other legal action if the debt collector does not intend to pursue
such action; and
· Collecting any amount incidental to the principal obligation, unless it is permitted by law or expressly authorized by the agreement creating the debt.
Violators would face a fine 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.
But the bill also specifies that in lieu of the assessment of punitive damages, a debtor aggrieved under its provisions is entitled to actual damages as a result of the violation or a civil penalty of $1,000, whichever is greater, together with reasonable attorney’s fees, court costs and any punitive damages allowed by the court.
The bill was released 4-0-1 by the Assembly Consumer Affairs Committee and now goes to the Assembly Speaker, who decides if and when to post it for a vote.