Jun 10, 2013 Phil Burgess
Debt collection agencies in California may be legally obligated to verify the identity of the person they are contacting is indeed the owner of the overdue account. According to KERO-TV, the state senate unanimously passed the bill recently, which now heads to the Assembly.
The legislation is a result of a series of lawsuits that have been brought against California consumers for debts that they did not owe, the source noted. These cases of mistaken identity can be extremely detrimental for consumers and also do little to help the reputations of the debt relief firms that bring such lawsuits.
Agencies that purchase charged-off consumer accounts are the subjects of the proposal. If passed, the law would prevent debt buying companies from contacting a debtor without possessing the full history of the debt, as well as verification of the identity of individual.
According to CGI, debt collection agencies may need to adapt the manner in which they communicate. Walk-in offices largely gave way to call centers with the advent of phones, and the source noted that a similar transition to social media and mobile communication may be on the horizon. Such a change could help collectors better engage with consumers, allowing both parties to effectively communicate about the status of an account.
However, debt relief firms would be wise to follow regulations set out by local and state governments. Also, adhering to the Fair Debt Collection Practices Act is important if they wish to avoid litigation and penalties.