Debt Collectors Must Be Licensed
The new law requires all consumer debt collectors to be licensed with the California Department of Financial Protection and Innovation (DFPI). The law also prohibits unlicensed consumer debt collectors from doing business in California.
Some exemptions to this new licensing requirement include those debt collectors licensed under the student loan servicers, California Real Estate Law, foreclosure trustees, Residential Mortgage Lending Act, and persons subject to the Karnette Rental-Purchase Act.
Unfortunately, dealing with debt collectors is usually an unpleasant experience, no matter their licensing. This is why it’s better to work with a professional San Diego credit repair service to explore credit restoration and avoid debt collectors altogether.
Limitations on Contact
There are some limitations on how debt collectors can contact you. The Fair Debt Collection Practices Act (FDCPA) imposes restrictions on when and how often a debt collector can contact you, as well as what information they must include in their communications with you.
Specifically, the FDCPA prohibits debt collectors from contacting you at inconvenient times or places, such as before 8:00 AM or after 9:00 PM. Additionally, they shall not contact you at work if they know that your employer prohibits such communication.
There is also a limit on the number of times a debt collector can contact a consumer per week, which is now capped at seven times per week.
Additionally, collectors are no longer allowed to send voicemails and must email consumers through the contact information they have on file.
No Communication With Deceased Consumers’ Families
The law says that if you’re a debt collector and you receive information that the person you’re trying to collect from has died, you may not contact any member of that person’s family–including their spouse, children, or parents.
This is true unless a family member has been designated as an authorized representative or executor of the estate in writing.
Record Retention
A debt collector must retain records related to debt for at least three years from the date of the last activity on the account. This means that paper documents and electronic records, which include scanned versions of physical documents, must be stored in a secure area and be accessible only by authorized personnel.
This is to ensure that in the case of any investigation, no information is destroyed or tampered with, allowing you adequate time to respond to such investigations.
Disclosures Concerning Debts
The Federal Trade Commission also made a new rule that requires debt collection agencies to include specific information in their collection letters. This law is designed to make it easier for customers to understand how the debt was incurred, how much they owe, and what actions they can take to resolve the debt.
The details of the letter include the following:
- Actual information of the debt collector (name, address)
- Original creator’s account number
- An organized list of current debts
Protection Against Violence
If a debt collector calls you and threatens to harm you or someone in your family, they are breaking the law. Under the new provisions, debt collectors will not be allowed to threaten violence or make any other threats that could be perceived as violent in nature.
They can’t also use profane language or engage in any behavior that would be considered harassment under state law.
Debt Collection Laws Simplified
We believe the new debt collection laws in 2022 are a huge step forward for consumers and businesses alike.
These laws will help consumers get their debts resolved in a dignified way. They will also help business owners avoid unnecessary stress by making sure they have a clear understanding of the rules they must follow when collecting debts.
If you or someone you know still has questions about the new debt collection laws, feel free to reach out to the experts at The Phenix Group–we’ll be happy to help!