On Monday, July 1st, the California General Assembly passed a bill entitled the “Fair Debt Buying Practices Act”, California SB 233. The bill mandates debt buyers in California to obtain extensive account information before they can even begin the collection of a debt. It also requires debt buyers to use specific disclosures language in their collection communications. The following are several items a purchaser must now possess before beginning collection efforts: (1) proof that they are the sole owner of the debt, (2) a full chain of title, (3) date of last payment or default, (4) the account balance at charge-off, and (5) name and address of both the debtor and the creditor. In addition, if the account was bought and sold several times, a complete chain of title on the account is required.
The bill, which passed the California Senate earlier this year, will now head to California Governor Jerry Brown for signature. A full copy can be found at http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB233. The law is set to take effect on January 1st of 2014.