Oregon Considers Stricter Debt Buying Requirements

A new bill could change the way debt buyers file collection lawsuits against debtors.

The bill, labeled HB 2252, was brought to the attention of Oregon’s House Committee on Consumer Protection and Government Effectiveness. It summarizes the notices that debt buyers would be required to provide to the debtor before they could proceed with filing a lawsuit. This includes a record of certain documents that must also be passed on to the court prior to filing.

Industry group DBA International, who represents debt-buyers and Encore Capitol Group, a debt-buying leader, voiced displeasure with the bill at a public hearing after it was given to the House Committee earlier in the year. Encore claimed the bill greatly exceeds federal rules and rules that other states currently use.

They also said some of the documents required don’t exist because there are no signed contracts for a growing number of credit card accounts – particularly when consumers sign up for online or by the phone. Encore went on to comment that the Consumer Financial Protection Bureau and Federal Trade Commission are aware that “pre-charge-off account itemization” is usually not given to debt-buyers. A charge-off is a debt that creditors don’t expect to be paid on so it gets written off as a loss by the company and passed to a third-party collector.

DBA complained the bill would make debt-buyers hand over 20 distinctive pieces of data, notices and documents to the debtor three times to prove that they have the right debtor, they own the debt and they know the correct amount that must be paid back.

They also think the requirements in the bill won’t protect Oregonians from scammers and fraud. As a matter of fact, they say it “imposes extreme and in some cases impossible requirements on the industry which will not solve the problem of bad actors.”

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