Bill Introduced to Amend FDCPA to Protect Consumers From ‘Predatory’ Collectors

A bill has been introduced in the House of Representatives that seeks to amend the Fair Debt Collection Practices Act to change the information included in the written notice that follows an initial communication and provide written notice at least 30 days before commencing a legal action against a consumer.

The bill, H.R. 1671 — the Securing Consumers Against Misrepresented Debt Act of 2021 or SCAM Debt Act — was introduced by Rep. Suzanne Bonamici [D-Ore.]. The bill, according to a press release issued by Rep. Bonamici, is to protect consumers from “predatory” debt collectors.

Among the provisions of the bill would be to change the information that collectors have to include in the written notice that follows an initial communication. For example, instead of being required to provide the amount of the debt, collectors would have to provide an itemization of the debt that includes the total amount that was owed, the most recent date of default, and the amount owed on the most recent date of default, the amount of any payments made since such date, and the amount of any interest or fees accrued on the debt since such date. Instead of being required to disclose the name of the creditor to whom the debt was owed, collectors would be required to disclose the name of the original creditor and, if different, the name of the creditor on the most recent date of default and the name of the current creditor to whom the debt is owed. The dispute notification language would also change to remove the “in writing” requirement.

Prior to commencing legal action against a consumer, collectors would be required to provide consumers with a written notice, sent between 30 and 60 days before filing a lawsuit that would include all the methods that a consumer can use to contact the collector and much of the information included in the written notice sent after the initial communication. Collectors would also be required to disclose specific information in its pleading when filing collection lawsuits, including:

  • All information contained in the notice required under section 809(a) (excluding the information described in paragraphs (3), (4), and (5) of such section), except any account numbers and any personally identifiable information, updated to ensure correctness;
  • The last four digits of the account number of the original debt;
  • Admissible documentary evidence of—
    • The written agreement, contract, or instrument creating the debt, if any, or other documents showing that the consumer agreed to the agreement, contract, or instrument creating the debt;
    • any terms and conditions relevant to the debt;
    • that the consumer incurred the debt and the amount owed; and
    • that there is a chain of title of the ownership of debt and the right to collect the debt, including documents showing the date of each transfer of ownership of the debt and the identity of each owner of the debt; and
  • A sworn affidavit stating—
    • that the applicable statute of limitations for collecting the debt has not expired and the date on which such statute of limitations expires; and
    • that the debt collector personally reviewed all applicable records and documents relating to the debt to be collected.

“Predatory debt collection is a pervasive problem that threatens consumers, their livelihoods, and their well-being,” said Rep. Bonamici in a statement. “The aggressive and unscrupulous tactics these predatory debt collectors take can trail consumers from their homes to their workplace, causing disruption and stress. And frequently, the debt they are seeking to collect does not exist or cannot be verified. The SCAM Debt Act will help consumers by providing them with the information they need to recognize predatory debt collectors and their tactics, and by finally holding these unscrupulous collectors accountable for their harmful practices.

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