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With the enactment of AB 3072 (Seastrand), Statute of 1988 Legislative Session, Chapter 338, the Legislature deregulated the Collection Agency Act that required registration for licensing and regulation of collection agencies (July 1, 1992). With this deregulation, consumers must address violations of their rights through civil remedy. What follows represents only a portion of the information available in the bill.
The federal Fair Credit Reporting Act was adopted in 1970 and the California Consumer Credit Reporting Agencies Act was adopted in 1970, revamped in 1975 and supplemented in 1976, 1980, and 1982.
The Federal Trade Commission cannot provide information on the registration of collection agencies and individual collectors. With deregulation of the industry, there is no agency that would have this information. Collection agencies need only a local business license to operate. Anyone can be a debt collector.
Fair Credit Reporting Act:
Chapter 22 Section II Validation of Debt
22.2 California Debt Collection Practices Act
(Robbins-Rosenthal Fair Debt Collection Practices Act) (Civil Code 1788-1788.32)
22.3 Legislative Purpose and Intent
The legislature has acknowledged that the economy is dependent upon a credit system in which debts that are just and owing can be collected. It has also recognized that unfair or deceptive collection practices undermine the public confidence which is essential to the credit system, and that there is, therefore, a need to ensure that "debt collectors and debtors exercise their responsibilities to one another with fairness, honesty and due regard for the rights of the other". (Civil Code 1788.1[a].)
22.4 Overview of Functions of Act
The California Debt Collection Practices Act regulates the form and content of communications by a debt collector to the debtor and others, prohibits a variety of deceptive debt collection practices, and outlaws a variety of other practices.)
22.24 Collection Agency Must Verify Debt
If a debtor disputes a debt in writing, the collection agency must obtain verification of the debt and mail a copy of the verification to the debtor.)
22.28 Duty to Stop Collection Efforts
The collection agency must stop efforts to collect the debt, or any disputed portion thereof, if the debtor gives written notice to the collection agency within 30 days after receiving the written notice from the collection agency, informing the collection agency either that the debtor disputes the debt or any portion thereof, or requesting the name and address of the original creditor. The prohibition of efforts to collect the debt continues until the collection agency obtains verification of the debt or a copy of a judgment and mails a copy of the verification or judgment to the debtor.)
22.31 When Requested by Debtor's Attorney
With certain exceptions, the California act prohibits a debt collector from initiating communications with the debtor regarding the debt at any time after the debtor's attorney has made a written request to the debt collector to direct all future communications to the attorney. (The debt collector can contact the debtor if the debtor's attorney does not answer letters, return telephone calls, or discuss the debt).)
22.35 At Debtor's Place of Employment
A collection agency must honor a debtor's request not to contact the debtor either in person or by telephone at the debtor's place of employment. However, the debtor may revoke such a request either orally or in writing at an time.)
22.38 When Debtor Denies Liability or Requests Communications Cease
With certain limited exceptions, a collection agency may not communicate with a debtor with respect to a debt anytime after the debtor notifies the agency in writing that (1) the debtor would like the agency to stop communicating, or (2) the debtor does not owe, or refuses to pay, the debt. If the debtor's notice is given by mail, the prohibition is effective upon receipt.)
The collection agency may, however, communicate with the debtor to advise the debtor that:
- No further attempt will be made to collect the debt.
- The collection agency may invoke specified remedies which are ordinarily invoked by the agency (or the creditor), such as filing a suit.
- The collection agency intends to invoke a specified remedy, such as filing suit.
- The prohibition on communication with the debtor also extends to communications by a collection agency to the debtor's spouse, parent, guardian, executor, or administrator.
Collection agencies may not do the following:
A debt collector may not make anonymous calls without identifying self by a name (or alias) as well as the agency.
To cause the debtor expense for charges, telegram fees, or charges for other similar communications.
Repeated/Continuous Ringing or Frequent Calls:
To cause phone to ring continuously to annoy debtor or with frequency that becomes harassment.
To engage in conduct in an effort to oppress, or abuse any person.
To threaten use of physical force or violence; threaten to use criminal means to cause harm to the person, reputation, or property of anyone; threaten to accuse the debtor of the commission of a criminal offense if the debt is not paid (where the accusation, if made, would be false).
The Federal Trade Commission (FTC) enforces federal standards for the debt collection industry as a whole but does not represent individual consumers. No agency can provide information on individual agencies or collectors.
Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC 20580
A consumer may retain an attorney or file in small claims court to obtain legal remedies or assistance with debt collection agencies; in addition, the consumer may request the Better Business Bureau's (BBB) arbitration/mediation services. The BBB can assist a consumer if complaint is filed before a collection agency gets involved but not afterwards. Additional resources are listed in "A Guide to Alternative Dispute Resolution".
CALIFORNIA DEPARTMENT OF CONSUMER AFFAIRS AND DEREGULATION:
Since the deregulation of the collection agency industry, collection agency records kept by the state have been placed in archive storage. The California Department of Consumer Affairs (DCA) continues to receive requests for information from these files. Some of the file data is public information; however, other information deemed confidential may only be accessed by a subpoena. Questions about historical records may be address by contacting the following division in the DCA.
Questions relative to collection agencies formerly licensed by the California Department of Consumer Affairs:
California Department of Consumer Affairs
1625 North Market Blvd. Suite N-120
Sacramento, CA 95834