The sponsor of a bill in California that would require collection agencies to obtain licenses has said it is “more important than ever” to enact the proposed legislation now, because without it, “more families will be unnecessarily threatened or ripped off.”
California State Sen. Bob Wieckowski says his bill was already “sorely needed” before the coronavirus pandemic struck California and the rest of the United States, and will become even more important because the debt loads of individuals across the country will be exacerbated by COVID-19.
“Given the power debt collectors have to affect people’s bank accounts, personal property and credit scores, we need SB 908 now more than ever to hold the industry accountable and punish the bad actors who otherwise would prey on the vulnerable and desperate,” Wieckowski wrote yesterday. “Without a state licensing requirement and robust enforcement, the industry can continue its reckless behavior with no accountability. California has no idea how many debt collectors operate within the state, the sheer volume of debt they are collecting from Californians, or what qualifications these companies require of employees who manage thousands of accounts.”
Wieckowski introduced his bill in February, calling on California to become one of about three dozen states nationwide that would require collection agencies to be licensed at the state level. The state of New York was also planning a similar move, but it appears as though that has been shelved as the state deals with the coronavirus pandemic.
If enacted, SB 908 would require collectors to reference their license number in every phone conversation with consumers. As well, all written and digital communications would require the collectors’ license numbers. The Commissioner on Business Oversight would have authority over the licensing process and would be able to consider the personal history and credit reports of those seeking licenses. The fee to obtain a license would be $100 for investigating the application and obtaining fingerprints, and a $300 application fee. Along with filling out a license application, the collector would be required to include a sample of all documents it will use in correspondence with California consumers.
