California Senate approves Wieckowski bill to strenghen debt notification rules

May 13, 2021

SACRAMENTO – The California Senate voted overwhelmingly today to expand consumer rights and notification requirements covering assigned debt collection practices. SB 531, authored by Senator Bob Wieckowski (D-Fremont) will now head to the Assembly for consideration.

“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 Senator Wieckowski, a bankruptcy attorney, who has successfully authored several bills to assist consumers dealing with debt issues. “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.”

The Legislature passed the FDBPA in 2013 to eliminate cases where collectors were going after the wrong person, collecting incorrect amounts and targeting debt that had already been paid off. However, the Act only covers debt that is sold rather than debt that is assigned to a collector. Legal service providers say debtors’ rights and protections given under the FDBPA are being circumvented as a result.

“Abusive debt collection practices are consistently among the top complaints filed by consumers,” said Marisabel Torres, California policy director of the Center for Responsible Lending. “SB 531 allows consumers to request proof that collectors have the authority to collect a debt.  It increases transparency and raises the standards under which debt is collected.”

The bill would give the consumer the right to request that proof, along with other basic information in regards to the debt. It would also require the original creditor or debt owner to notify consumers within five days of a sale or assignment of debt. The notification to the consumer must include the debt amount and the name of the party to whom the debt will be transferred.

In addition to the Center for Responsible Lending, SB 531 is also supported by the Western Center on Law and Poverty, the California Low-Income Consumer Coalition, the Public Law Center and Neighborhood Legal Services of Los Angeles County.

Senator Wieckowski represents the 10th District, which includes parts of Alameda and Santa Clara counties.