Debt collection-related bill stalled in California

Debt collection legislation is becoming increasingly common in state governments all over the United States. The issue has pitted consumer advocates against those in the industry, who are pushing back against efforts to increase regulation. In one recent case, a bill in California that seeks to put new restrictions on those in the debt collection sector has been stalled by DBA International, an industry advocacy group. The group says the Fair Debt Buyers Practices Act, which was introduced last March by State Senator Mark Leno, would be detrimental to those who are in the business legitimately. The legislation focuses on changing the way collection agencies would alert people after purchasing their delinquent accounts from businesses and organizations. However, in a recent move, Leno requested the bill be put into the inactive file, meaning that it would be discussed later and shelved for the time being. The bill was originally created in response to a report from the Federal Trade Commission report, which reported a number of violations within the industry. Others who have raised concern includes the California Attorney General, who said he feared that sloppy work in the industry could have resulted in judgments against the wrong people. Jan Stieger, executive director of DBA International, said that had the bill passed, it would have made conducting collection operations very difficult and harmed the state's economy. "This bill put up a lot of barriers," Stieger said in an interview with InsideARM.com. "If they (debt buyers) made any mistakes (in filing a lawsuit), they couldn’t withdraw the lawsuit or do anything. It could have put people out of business for one letter error." In recent debt collection news in Texas, a national debt collection firm was sued by a couple in Sherman after an employee of the agency told the couple they would go to jail if they didn't pay their debts, the Southeast Texas Record reports. Ernest and Keila Scruggs sued H&P Capital for violations of the Fair Debt Collections Practices Act. The couple is hoping to be compensated for attorney's fees, court costs and statutory damages.