Debt collectors attempting to collect debts from residents of Oregon are facing a significant liability risk because a law requiring debt collectors to provided certain documents upon request within 30 days– that went into effect last week– contains no safe harbor language in the event one of the documents cannot be obtained.
The statute is part of a much more comprehensive, and complex, law that went into effect on Jan. 1, 2018. The law also requires debt buyers obtain a license when purchasing portfolios that include receivables from individuals in Oregon, makes changes to the items required when filing an initial pleading in attempt to sue an individual for an unpaid debt, and outlines a number of other practices that are now considered to be unlawful.
A very thorough review of the law was provided by Kelly Knepper-Stephens, the general counsel of Stoneleigh Recovery Associates, during a webinar last week. A recording of the webinar is available here.
The law states makes it an unlawful collection practice for a debt collector to collect a debt before providing to a debtor, within 30 days after the date of the debtor’s request, all of these documents (listed in the statute):
- Original creditors name, written as the original creditor used the name in dealings with the debtor
- Name address and telephone number of the person that owns the debt and a statement as to whether the person is a debt buyer
- Last four digits of the original account number
- Date of purchase of account by debt buyer, current creditor
- Name and address of the debtor
- Copy of the bill of sale
- Copy of the agreement between the original creditor and debtor that is either (1) the contract or other writing the debtor signed that created and is evidence of the original debt; or (2) a copy of the most recently monthly statement that shows a purchase transaction or balance transfer or the debtor’s last payment (if made) if the debt is a credit card or other debt for such a contract or other writing that is evidence of the debt does not exist)
As well as an itemized statement that shows
- The amount the debtor last paid on the debt (if the debtor made a payment) and the date of the last payment
- The amount of date of the debtor’s last payment prior to charge-off (if debtor made a payment prior to charge-off)
- The charge-off balance
- Amount of interest, rate of interest, any fees, and any charges that the original creditor imposed, if the debt buyer or the debt collector knows the amount, rate, fee or charge
- The amount and rate of interest any fees, and any charges that the debt buyer or any previous owner of the debt imposed, if the debt buyer or debt collector knows the amount, rate, fee or charge
- The attorney fees the debt buyer or debt collector seeks, if the debt buyer or debt collector expects to recovery attorneys fees
- Any other fee, cost or charge the debt buyer seeks to recover
The law is not clear about what the debtor needs to say in order to trigger a debt collector’s requirement to provide these documents in 30 days, Knepper-Stephens said, so it is critical to evaluate the law carefully and make a determination about the best way to comply. The law does make clear that collection agencies are violating the law every time they fail to provide the notice within the 30-day timeframe.
New York has a similar state law, Knepper-Stephens said, but also included language that allowed for a collection agency to essentially wipe away an account by sending a satisfaction letter. Currently, no such language exists in the Oregon statute.
Knepper-Stephens said that the Receivables Management Association is working with the Oregon Attorney General and Department of Consumer & Business Services on the lack of a safe harbor as well as on other ambiguities that are currently in effect.