The California state Senate yesterday passed SB 531, a bill that would require the original creditor or owner of a debt to notify a consumer within five days of the sale or assignment of the debt to someone else, while also giving consumers the right to request certain information about a debt from debt collectors, such as the debt became delinquent or the date of the last payment, among other pieces of information.
The bill, which was sponsored by Sen. Bob Wieckowski, now heads to the California state Assembly for its consideration.
Among the information that collectors and creditors must provide to consumers when the right to collect payments on a delinquent dent has been sold or assigned are: the dollar amount of the outstanding debt and the name of the party to whom the debt was sold or assigned.
Upon request from the debtor, collectors would also be required to provide the following information:
- The debt balance and an explanation of the amount, nature, and reason for all interest and fees, if any, imposed by the creditor or any subsequent entities to which the debt was assigned
- The explanation shall identify separately the balance, the total of any interest, and the total of any fees
- The date the debt became delinquent or the date of the last payment
- The name and an address of the creditor and the creditor’s account number associated with the debt. The creditor’s name and address shall be in sufficient form so as to reasonably identify the creditor
- The name and last known address of the debtor as they appeared in the creditor’s records before the assignment of the debt to the debt collector
- The names and addresses of all persons or entities other than the debt collector to which the debt was assigned. The names and addresses shall be in sufficient form so as to reasonably identify each assignee
- The California license number of the debt collector
Collectors and debt buyers will also be required to notify consumers of their rights to request this information in their first written communication to a debtor.
Additionally, disclosures will have to be made when collecting on time-barred debts under the provisions of the statute.
“SB 531 will broaden some of the higher transparency and notification standards of the Fair Debt Buying Practices Act (FDBPA) that cover debt that is sold to debt that is assigned to collectors,” said Sen. Wieckowski, himself a bankruptcy attorney, in a statement. “Having the knowledge of who is authorized to collect a debt that you owe increases the likelihood that people will respond to a notice they receive in the mail and also reduces the chances of falling victim to a scam.”