California nears passage of stricter debt buying regulations

The state of California moved a step closer to approving new rules on debt collection practices this week. Consumer advocates have trumpeted the regulations as a win for state residents, particularly those levied with high levels of debt. The proposed regulations affect companies that purchase consumer debt and then seek to collect outstanding payments. These firms would be required to provide additional documentation to prove that they're seeking accurate payments from the right debtors. The legislation was prompted by a number of consumers who were wrongly targeted by debt collection firms because of mistake identity or similar names. "Opponents say the proposal would create an unfair burden on debt buyers, requiring excessive documentation and making it more difficult to collect in legitimate circumstances," the Los Angeles Times reports. State Attorney General Kamala Harris rebutted, claiming the Fair Debt Buyers Practices Act will impose reasonable requirements on debt buyers and collectors, while ensuring that consumers are not forced to pay the debts of others. Reports of similar cases have been on the rise in recent years, as tightened finances among government, consumers and private businesses alike have driven organizations to recoup dues through debt collection services.