Bill Text: NC S471 | 2015-2016 | Regular Session | Introduced
Bill Title: Modernize Collection Agency Laws
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-03-30 - Re-ref to Judiciary II. If fav, re-ref to Insurance [S471 Detail]
Download: North_Carolina-2015-S471-Introduced.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2015
S D
SENATE DRS15153-MD-74 (03/12)
|
Short Title: Modernize Collection Agency Laws. |
(Public) |
|
|
Sponsors: |
Senator Hartsell (Primary Sponsor). |
|
|
Referred to: |
|
|
A BILL TO BE ENTITLED
AN ACT to update and modernize the laws related to collection agencies.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 58‑70‑5 reads as rewritten:
"§ 58‑70‑5. Application to Commissioner for permit.
Any person, firm, corporation or association desiring to
secure a permit as provided by G.S. 58‑70‑1, shall make
application to the Commissioner of Insurance for each physical location
at which such person, firm, corporation or association desires to carry on the
collection agency business as hereinafter defined. Such Nothing in
this section shall be construed to require that a person, firm, corporation, or
association secure a permit for a remote location from which employees work
under the control and monitoring of a collection agency through
telecommunications and computer links, so long as (i) records required to be
kept under G.S. 58‑70‑25 are not maintained at the remote
location; (ii) the remote location is not held open to the public as a place of
business; and (iii) the person, firm, corporation, or association has a valid
permit issued pursuant to this Article for at least one physical location in
this State. An applicant shall be entitled to a permit upon submission to
the Commissioner of Insurance of the following:
…."
SECTION 2. G.S. 58‑70‑20(a) reads as rewritten:
"§ 58‑70‑20. Bond requirement.
(a) As a condition precedent to the issuance of any
permit under this Article, every applicant for a permit shall file with the
Commissioner a bond in favor of the State of North Carolina that is executed by
a surety company licensed to transact surety business in this State. The bond
shall be maintained in force during the permit period, continuous in form, and
remain in effect until all moneys collected have been accounted for. The bond
shall expressly provide that the bond is for the benefit of any person, firm or
corporation for whom the collection agency engages in the collection of
accounts. The bond shall be in the amount of ten thousand dollars ($10,000) five
thousand dollars ($5,000) for the initial permit. The amount of the bond
for any renewal permit shall be no less than ten thousand dollars ($10,000),five
thousand dollars ($5,000), nor more than seventy‑five thousand
dollars ($75,000),twenty thousand dollars ($20,000), and shall be
computed as follows: The total collections paid directly to the collection
agency less commissions earned by the collection agency on those collections
for the calendar year ending immediately prior to the date of application,
multiplied by one‑sixth."
SECTION 3. G.S. 58‑70‑65 reads as rewritten:
"§ 58‑70‑65. Remittance trust account.
(a) Each permit holder shall deposit, no later than two banking days after receipt, in a separate trust account in any bank located in North Carolina or in any other bank approved by the Commissioner, sufficient funds to pay all moneys due or owed to all collection creditors or forwarders. The funds shall remain in the trust account until remitted to the creditor or forwarder, and shall not be commingled with any other operating funds. The trust account shall be used only for the purpose of:
(1) Remitting to collection creditors or forwarders the proceeds to which they are entitled.
(2) Remitting to the collection agency the commission that is due the collection agency.
(3) Reimbursing consumers for overpayments.
(4) Making adjustments to the trust account balance for bank service charges.
(b) No refund for overpayment by a debtor in an amount
of less than one dollar ($1.00)ten dollars ($10.00) is required.
(c) Each permit holder located outside this State shall deposit in a separate trust account, designated for its North Carolina creditors, funds to pay all monies due or owing all collection creditors or forwarders located within this State. In the case of alien corporations that are permit holders, the trust account must be established with a bank located in the United States or in any bank approved by the Commissioner."
SECTION 4. Part 2 of Article 70 of Chapter 58 of the General Statutes is amended by adding two new sections to read:
"§ 58‑70‑86. Assignment of claims.
It is lawful for a collection agency, for the purpose of collecting or enforcing the payment thereof, to take an assignment of any such claim from a creditor, and sue on the claim as the real party in interest, if all of the following apply:
(1) The assignment between the creditor and collection agency is in writing;
(2) The original agreement between the creditor and debtor does not prohibit assignment; and
(3) The collection agency gives the debtor written notice of such assignment as soon as practical after the assignment is made, and at least 30 days before filing any civil action to collect the debt.
"§ 58‑70‑87. Convenience fee.
After a consumer has agreed to pay a debt, or make a payment on a debt, a collection agency may charge a fee for processing a particular method of payment or for initiating a payment method that includes a fee charged by a payment processing company, so long as all of the following are satisfied:
(1) The consumer authorizes the method of payment and has been notified in advance that the payment may be made by reasonable alternative means that will not result in additional charges, fees, or expenses.
(2) The fee charged does not exceed fifteen dollars ($15.00) or five percent (5%) of the payment, whichever is less.
(3) The collection agency provides written or verbal disclosure of all of the following information to the consumer:
a. That a fee will be charged.
b. The amount of the fee.
c. The number of times the fee will be charged.
d. The payment method by which a consumer can avoid paying the fee."
SECTION 5. G.S. 58‑70‑90(2) reads as rewritten:
"§ 58‑70‑90. Definitions.
As used in this Part, the following terms have the meanings specified:
…
(2) "Consumer" means an individual,
aggregation of individuals, corporation, company, association, or partnership
that has incurred a debt or alleged debt.a natural person obligated or
allegedly obligated to pay a debt."
SECTION 6. G.S. 58‑70‑115 reads as rewritten:
"§ 58‑70‑115. Unfair practices.
No collection agency shall collect or attempt to collect any debt by use of any unfair practices. Such practices include, but are not limited to, the following:
…
(2) Collecting or attempting to collect from the
consumer all or any part of the collection agency's fee or charge for
services rendered, collecting or attempting to collect any interest or other
charge, fee or expense incidental to the principal debt unless legally entitled
to such fee or charge.any amount, including any interest, fee, charge,
or expense incidental to the principal obligation, unless the amount is
expressly authorized by the agreement creating the debt or permitted by law.
…."
SECTION 7. G.S. 58‑70‑130 reads as rewritten:
"§ 58‑70‑130. Civil liability.
(a) Any collection agency which violates Part 3 of this Article with respect to any debtor shall be liable to that debtor in an amount equal to the sum of any actual damages sustained by the debtor as a result of the violation.
(b) Any collection agency which violates Part 3 of
this Article with respect to any debtor shall, in addition to actual damages
sustained by the debtor as a result of the violation, also be liable to the
debtor for a penalty in such amount as the court may allow, which shall not be
less than five hundred dollars ($500.00) for each violation nor greater
than four thousand dollars ($4,000) for each violation.one thousand
dollars ($1,000) per individual action.
(c) The specific and general provisions of Part 3 of
this Article shall constitute unfair or deceptive acts or practices proscribed
herein or by G.S. 75‑1.1 in the area of commerce regulated thereby;
provided, however, that, notwithstanding the provisions of G.S. 75‑16,
the civil penalties provided in this section shall not be trebled. Civil
penalties in excess of four thousand dollars ($4,000) for each violation
shall not be imposed.the amounts authorized under subsection (b) of this
section shall not be imposed.
(d) The remedies provided by this section shall be cumulative, and in addition to remedies otherwise available. Any punitive damages assessed against a collection agency shall not be reduced by the amount of the civil penalty assessed against such agency pursuant to subsection (b) of this section.
(e) The clear proceeds of civil penalties imposed under this section in suits instituted by the Attorney General shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2.
(f) An action alleging a violation of Part 3 of this Article must be commenced within one year after the cause of action accrues."
SECTION 8. This act becomes effective October 1, 2015.
