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California, Oregon legislatures advance collection bills

Jun 10, 2013 Philip Burgess

Debt collection reforms may be on the horizon for California and Oregon. InsideARM recently reported that bills in both states made their way past legislative bodies.

A bill in California that would address debt buying practices was approved by a senate committee, according to the source. Known as the Fair Debt Buying Practices Act, the proposed legislation would require that debt buyers have proof that they are the owner of an account owed by a debtor. Also, before collection efforts can be conducted, buyers must ensure that they have documentation regarding the date of the last payment or default, the names and addresses for the debtor and creditor they purchased the account from, the outstanding balance of a debt and a record of the account's ownership history.

InsideARM also stated that a bill in Oregon would prohibit government-hired debt collection firms from using official state labeling. If passed, collectors would not be able to imply that they are part of a district attorney or other state-run office. Using the name, letterhead or seal of a state agency would be outlawed. Recently passed by the state senate, the bill is now subject to a committee hearing, according to the source.

The Oregonian also noted that the proposal would make it illegal for district attorney's offices to obtain fees from private collection firms. Despite being approved in the senate, the source speculated that due to opposition from state prosecutors, the bill faces a stiff battle in the house of representatives.

One district attorney in Oregon, Alex Gardner, told the newspaper that he wants language removed from the bill that refers to check enforcement agencies as debt collectors. He claimed that failing to do so would be disastrous for bad check diversion initiatives in the state.