Assembly Banking and Finance approves Wieckowski bill on assigned debt collection

SB 531 requires assigned debt collectors to prove they have authority to collect the debt

June 29, 2021

SACRAMENTO – The Assembly Banking and Finance Committee approved legislation by Senator Bob Wieckowski (D-Fremont) today to strengthen protection for consumers who are dealing with assigned debt collectors who operate with fewer restrictions than those governing debt that is sold. SB 531 now heads to the Assembly Judiciary Committee.

After numerous complaints of collections against the wrong person, targeting debt that had already been paid and attempts to collect incorrect debt amounts, the Legislature enacted the Fair Debt Buying Practices Act in 2013. The Act addressed these issues by requiring debt buyers, who have debt sold to them, to have proof of their ownership and it allowed consumers to request that proof. The law also required disclosure of how much debt is owed, any fees or interests and the date of the last payment.

“Now, what we are seeing are debt collectors saying the debt they are collecting is assigned and not sold, in order to circumvent the protections in the Fair Debt Buying Practices Act,” said Wieckowski, a member of the Senate Judiciary Committee, whose authored several bills in his legislative career to protect consumers from abusive collection tactics. “SB 531 is about basic record keeping, more transparency and protections for consumers who have debt.”

The Bureau of Consumer Financial Protection found that from 2016-2017 collecting on debt not owed was the number one consumer financial issue in California, with more than 3,700 complaints and those are just the reported complaints.

SB 531 requires collectors who have debt assigned to them to have proof that they have authority to collect the debt. The consumer could request the proof and other basic information about the debt.

The bill is supported by the California Low Income Consumer Coalition (CLICC).

“CLICC’s members work extensively with low-income consumers who have received collection letters from, or who have been sued by, debt collectors,” CLICC Executive Director Ted Mermin said. “One of the first questions a client is asked is whether or not they are familiar with the debt collector. Most of the time, they say ‘no.’ Because so many debtors go unrepresented, many are stuck navigating the process on their own – and may never be confident that a collector is truly collecting a debt that they owe.”

The bill is also supported by the Public Law Center, the Center for Responsible Lending, Neighborhood Legal Services of Los Angeles County and the Western Center on Law and Poverty.

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