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On August 3, 2021, the DC City Council unanimously approved an amended version of the pending DC Emergency Debt Collections Bill. If signed by the Mayor of DC, the amended bill will become effective October 1, 2021.
The amendments address several of the more demanding aspects of the original bill, including limiting call volumes, breaking down credit cards and the number of monthly statements required, upfront communication requirements, proof of property for lawsuits, damages and date of applicability.
Here is a brief overview of the changes between the original bill and the amended bill:
Call volume limitation: The original bill limited calls to three calls per consumer over a seven-day period. While this limit remains in the bill, the amendment clarifies that the three-call limit does not apply to calls made at the request of the consumer.
Retail Requirements/Monthly Statements: In addition to detailed accounting, the original bill required debt collectors collecting credit card debt to send consumers twenty-four-month statements. The amendment clarifies that itemized accounting should be measured from the charged balance and changes the monthly statement requirements to include only copies of the charge statement and the last monthly statement showing a purchase, payment, or balance transfer.
Initial Communication: The original bill required debt collectors to provide numerous documents and information to the consumer within five days of the initial communication, whether or not the consumer requested it. Instead, the amended bill now requires the debt collector to include a bold 12-point notice in the initial communication that the consumer may request specific types of information and documents. The exact wording of the statement and other information that the debt collector must provide to the consumer is provided in the amended invoice.
Proof of ownership requirements for lawsuits: The original bill required debt collectors to include in any legal action to collect a debt an assignment or writing showing the last four digits of the original account number and the name of the debtor associated with that number. Instead, under the amended bill, debt collectors must report (a) the date the debt was sold or assigned; (b) each previous owner and the date the debt was assigned; and (c) the amount owed when the original creditor sold the account.
Damage rewards: The original bill stated that if a debt collector violates the requirements of the bill and applicable law, the debt collector “shall” be liable to the consumer for certain types of damages, and provided that damages- interest was to be awarded by breach. The amended bill replaces “shall” with “may” and removes the award of damages per breach.
Date of application: The amended bill specifies that it will not be applicable before October 1, 2021.
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InsideARM perspective:
The original bill passed without a hearing or opportunity for comment and ultimately included requirements that would have been impossible for debt collectors to meet. The amendments to the bill should allow the DC City Council to achieve its goal of protecting consumers in a way that the industry can do. Although the bill has yet to be signed into law, it is expected that the DC mayor will eventually sign this version. Accounts receivable entities should be sure to read the amended bill in its entirety to ensure that they will be prepared to comply with it when it comes into force.
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