The state of Oregon’s House Committee On Business and Labor is having a meeting this afternoon, and under the bills being discussed at the meeting is House Bill 2356, which would, among other things, establish requirements under which debt buyers may bring legal action to collect debt and specifies the notice that debt buyers must give to debtors.
If enacted, debt buyers would be forced to provide written notice to individuals 30 days prior to initiating any legal action. The communication must be sent to the individual’s last known address. The notification must include, at a minimum:
- The debt buyer’s name, address and telephone number
- The original creditor’s name, written as the original creditor used the name in dealings with the debtor
- The original creditor’s account number for the debt, as shown in the original creditor’s records
- A statement that shows:
- The amount the debtor last paid on the debt and the date of the payment
- The balance due on the debt on the date on which the debtor last made a payment
- An itemization of the interest, fees and charges that the original creditor imposed
- An itemization of the interest, fees and charges that the debt buyer and any other assignee imposed
- All payments made on and credited to the debt after a default or a charge-off
- A statement that tells the debtor clearly and conspicuously that
- An applicable statute of limitations may bar the debt buyer from bringing legal action to collect the debt
- The debtor may seek legal advice if the debtor has questions about when the time period during which the debt buyer may bring legal action under the applicable statute of limitations will end
- The alleged debt may be reported to a consumer reporting agency and affect the consumer’s credit score
- If the debtor pays any amount on the debt, the payment affirms the existence of the debt and begins a new time period during which the debt buyer may bring legal action to collect the debt, subject to the applicable statute of limitations.
The bill goes on to include other provisions that debt buyers must follow prior to initiating or during the course of attempting to take legal action against an individual. The bill would also require debt buyers to submit affidavits from each seller or assignor that previously owned a debt and an affidavit that traces the chain of ownership. An affidavit from the original creditor would also be required, in which the creditor describes the circumstances that created the debt, when the debtor defaulted, when and to whom the original creditor assigned the debt and the amount due on the debt at the time of the assignment, and authenticates the contract of sale or assignment and any related exhibits the debt buyer submits.
Today’s meeting includes testimony from representatives from the Center for Responsible Lending — a consumer advocacy, AARP, and the Oregon State Bar.
The CRL included a study of 300 legal actions filed in Oregon, in which 48% of the cases were “won” by the debt buyer because the individual did not mount a defense. The CRL also claims that “cases filed by six companies alone accounted for almost one-quarter (23%) of all civil cases filed in Oregon Circuit Courts in 2012 and 2013. To underscore this point, six companies alone filed over 75,000 collection cases in Oregon from 2012-2016.”