SB 531 requires assigned debt collectors to show they have authority to collect debt
SACRAMENTO – Governor Gavin Newsom today signed legislation by Senator Bob Wieckowski (D-Fremont) to require assigned debt collectors to provide more information to consumers and to show that they have authority to collect the debt. SB 531 was approved with bipartisan backing in the Legislature and is supported by legal service providers across the state.
“With his signature today, Governor Newsom strengthens protections for Californians struggling with debt and brings more transparency into the assigned debt collection process,” said Wieckowski, a member of the Senate Judiciary Committee. “I authored SB 531 because for too long we failed to properly shield consumers from abuses that this bill will end. Now consumers can demand more information and be more certain that they actually owe the debt and the collector has proper authority to collect it. Instead of being leery about dealing with some firm they do not recognize, they can respond with certainty when they are contacted.”
The Legislature enacted the Fair Debt Buying Practices Act in 2013 after receiving numerous complaints about collections against the wrong person, targeting debt that had already been paid and repeated attempts to collect incorrect debt amounts. The Act requires debt buyers who have debt sold to them to have proof of their ownership and allows consumers to request that proof. The law also requires disclosure of how much debt is owed, any fees or interests due and the date of the last payment.
SB 531 now applies those higher standards to collectors who are working with assigned debt.
The Consumer Financial Protection Bureau found that one of the top nationwide complaints it received from consumers were collectors attempting to collect on debt that was not owed. It was also a top complaint among California consumers.
The California Low Income Consumer Coalition is one of the organizations supporting the new law.
“Too often, consumers hear from debt collectors they have never heard of,” said CLICC Executive Director Ted Mermin. “Unsurprisingly, people often don’t respond to these strangers who are telling them to send money. This bill will give consumers information they need, in time for them to get an attorney or prepare to defend themselves. It’s an important step forward.”
The bill is also supported by the Public Law Center, 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.