On June 27, 2012 Senator Al Franken (D-Minn.) re-introduced the “End Debt Collection Abuse Act” (S. 3350) in hopes of creating a piece of legislation that will ultimately help consumers avoid the distasteful tactics of some debt collection companies and to provide more information to consumers regarding how to get help for their debts. The Senator first introduced this bill in September 2010 during a previous session of Congress; however, it was not enacted at the time. The End Debt Collector Abuse Act of 2012 has been referred to the Committee on Banking, Housing, and Urban Development.

The End Debt Collector Abuse Act hopes to amend the Fair Debt Collection Practices Act (FDCPA). The primary purpose of the FDCPA is to eliminate abusive practices in the collection of consumer debts, promote fair debt collection, and provide a way for consumers to not only dispute their debts, but to also receive validation information in hopes of keeping the information most accurate. This new Senate bill will not only create new provisions for attempting to collect debts, primarily medical debts, but it would also create a new structure to help consumers find relief from their debts.

The End Debt Collector Abuse Act of 2012 creates:

  • Enhanced validation notices:
    • An amendment to the FDCPA would provide for an itemization of the principle, fees, interest, and any other charges that make up the debt, including any other charges added after the date of the last payment made by or on behalf of the consumer on the subject debt.
    • It would also require the name and contact information of the person responsible for handling complaints on behalf of the debt collector to be disclosed.
  • Medical debt provisions:
    • All Medical Providers would automatically become “debt collectors” under the act and subject to the same restrictions as third party collectors.  This strips medical facilities of the normal “original creditor” exemptions from the FDCPA.
    • There would also be a prohibition on medical facility contact. No longer could a debt collector speak to a consumer regarding the debt in a hospital emergency department, labor and delivery, or any department where critical medical services are provided.
    • Tactics that were previously engaged in like the withholding of medical services, threatening to withhold medical services until the debt is paid would not be permissible.
  • Availability of information:
    • Collection companies would be required to disclose the availability of any charity care coverage, financial assistance, discounts based on income eligibility, or public or private insurance coverage that may assist in the payment of all or part of the debt. They would further be required to provide the consumer with information regarding how to apply for the available programs.
  • Dispute investigations and verification:
    • Upon receipt of a disputed debt the debt collector would be required to undertake a thorough investigation and provide the consumer specific responsive information and verification of the debt in a timely manner.
  • Awards and damages:
    • There would be an initial adjustment to account for inflation and then subsequent annual adjustments according to the Consumer Price Index.
  • Warrant for arrest as unfair debt collection practice:
    • A request by a debt collector to a court for the issuance of a warrant for the arrest of the debtor would be seen as unfair debt collection.

A complete copy of S. 3350 can be found at:

http://www.govtrack.us/congress/bills/112/s3350/text

Slovin & Associates Co., LPA is a regional law firm serving clients in Ohio, Kentucky, and Indiana, which provides legal services to commercial and consumer credit grantors. Our client’s needs include commercial litigation, collection of past due accounts, landlord tenant matters, bankruptcy services, and compliance with and litigation involving federal and state consumer laws.

Many thanks to Amy Holston for her contributions to this article.  Amy is a paralegal with Slovin & Associates Co., L.P.A.