Bill Text: OR HB2826 | 2013 | Regular Session | Engrossed

---

Bill Title: Relating to debt collection practices.

Spectrum: Committee Bill

Status: (Failed) 2013-07-08 - In committee upon adjournment. [HB2826 Detail]

Download: Oregon-2013-HB2826-Engrossed.html

---

     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 2006

                           A-Engrossed

                         House Bill 2826
                  Ordered by the House April 24
            Including House Amendments dated April 24

Sponsored by COMMITTEE ON CONSUMER PROTECTION AND GOVERNMENT
  EFFICIENCY

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.

  Establishes requirements under which debt buyer may bring legal
action to collect debt. Specifies notice that debt buyer must
give to debtor. Makes violation unlawful collection practice.
  Increases amount of damages that may be awarded in action for
unlawful collection practice.   { - Prohibits court from awarding
attorney fees and costs to prevailing debt collector in action
for unlawful collection practice unless court finds that debtor
did not have objectively reasonable basis for bringing action or
asserting ground for appeal. - }  { +  Permits court to award
attorney fees and costs to prevailing plaintiff. Permits award to
prevailing defendant only if court finds that plaintiff did not
have objectively reasonable basis for bringing action. + }
  Increases time period during which debtor may bring action for
unlawful collection practice.

                        A BILL FOR AN ACT
Relating to debt collection practices; creating new provisions;
  amending ORS 646.639 and 646.641; and repealing ORS 646.643.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + (1) As used in this section:
  (a) 'Debt buyer' means a person that engages in the business of
purchasing, in order to collect amounts due from, delinquent
consumer loans, delinquent consumer credit accounts or other
delinquent consumer debts, whether the person collects the
amounts due directly, hires a third party to collect the amounts
due or hires another person to pursue legal action to collect the
amounts due.
  (b) 'Legal action' means a lawsuit, mediation, arbitration or
any other legal proceeding in any court. + }
   { +  (c) 'Original creditor' means the last entity that
extended credit to a consumer to purchase goods or services, to
lease goods or as a loan of money. + }
   { +  (2) A debt buyer that takes legal action to collect or
attempt to collect a debt shall:
  (a) Notify the debtor in writing, at least 30 days before
beginning the legal action, that the debt buyer intends to take
legal action. The debt buyer must send the written notice to the
debtor's last-known address. The written notice must include, at
a minimum:
  (A) The debt buyer's name, address and telephone number;
  (B) The original creditor's name, written as the original
creditor used the name in dealings with the debtor;
  (C) The original creditor's account number for the debt;
  (D) A statement that shows:
  (i) The amount the debtor last paid on the debt and the date of
the payment;
  (ii) The balance due on the debt on the date on which the
debtor last made a payment;
  (iii) An itemization of the interest, fees and charges that the
original creditor imposed;
  (iv) An itemization of the interest, fees and charges that the
debt buyer or any other assignee imposed; and
  (v) All payments made on and credited to the debt after a
default or a charge-off; and
  (E) A statement that tells the debtor clearly and conspicuously
that:
  (i) An applicable statute of limitations may bar the debt buyer
from taking legal action to collect the debt;
  (ii) The debtor may seek legal advice if the debtor has
questions about when the time period during which the debt buyer
may take legal action under the applicable statute of limitations
will end; and
  (iii) If the debtor pays any amount on the debt, the payment
affirms the existence of the debt and begins a new time period
during which the debt buyer may take legal action to collect the
debt, subject to the applicable statute of limitations.
  (b) State in or attach to, as appropriate, the initial pleading
the debt buyer files to begin legal action to collect the debt:
  (A) The original creditor's name, written as the original
creditor used the name in dealings with the debtor;
  (B) The name of the person that now owns the debt;
  (C) The last four digits of the original creditor's account
number for the debt;
  (D) The amount and date of the debtor's last payment on the
debt and the amount and date of the debtor's last payment before
the debtor's default or a charge-off;
  (E) A detailed itemization of:
  (i) The balance due on the debt;
  (ii) Interest, fees and charges that the original creditor
imposed;
  (iii) Interest, fees and charges that the debt buyer or any
other assignee imposed;
  (iv) Attorney fees; and
  (v) Any other fees, costs or charges the debt buyer has imposed
or seeks;
  (F) A copy of the contract or other writing that the debtor
signed and that is evidence of the original debt or, if the debt
buyer's claim is based on credit card debt for which a signed
writing that is evidence of the debt does not exist, a copy of
any documents that the credit card transaction generated; and
  (G) A copy of each assignment, or other writing that is
evidence of a transfer of ownership of the debt, which must show:
  (i) The debtor's name clearly associated with the original
creditor's account number for the debt;
  (ii) The date on which the debt buyer purchased the debt;
  (iii) That the debt buyer owns the debt; and
  (iv) That an unbroken chain of ownership exists between
assignees of the transferred debt.
  (3)(a) Before a court enters judgment against a debtor in a
legal action that a debt buyer brings to collect a debt, or after
arbitration, the debt buyer shall file with the court:
  (A) Business records authenticated in accordance with ORS
40.460 that establish the nature and amount of the debt;
  (B) An affidavit from the original creditor that describes the
circumstances that created the debt, when the debtor defaulted,
when and to whom the original creditor assigned the debt and the
amount due on the debt at the time of the assignment, and that
authenticates the contract of sale or assignment and any related
exhibits the debt buyer submits;
  (C) An affidavit from each seller or assignor that previously
owned the debt, in which the seller or assignor authenticates the
contract of sale or assignment and any related exhibits that the
debt buyer submits and traces the chain of ownership for the
debt;
  (D) A statement of the basis for any attorney fees the debt
buyer seeks, along with evidence that shows that the debt buyer
is entitled to attorney fees;
  (E) An affidavit that states that the debt buyer complied with
the requirement set forth in subsection (2)(a) of this section;
and
  (F) An affidavit that states that the time period during which
the debt buyer may take legal action to collect the debt under
the applicable statute of limitations, or any extension of the
time period available under the statute of limitations, has not
ended.
  (b) A court may not enter judgment for a debt buyer that has
not complied with the requirements set forth in this section. The
court may, in the court's sole discretion, dismiss the legal
action with or without prejudice.
  (c) A debtor by motion before the court, without waiving the
debtor's right to offer evidence if the court does not grant the
motion, may assert that the amount that the debt buyer seeks is
more than the debtor owes and ask the court either to require the
debt buyer to amend the pleading to reflect the correct amount or
to dismiss the legal action without prejudice. The court, in
considering the motion, shall require the debt buyer to offer
evidence that shows that the debtor owes the amount that the debt
buyer seeks. The court may not award attorney fees to a debt
buyer that obtains a judgment that is less than the amount the
debt buyer sought in the original complaint, unless the judgment
is the result of a negotiated agreement.
  (4) If the debt buyer prevails in a legal action under this
section, the debt buyer may:
  (a) Collect interest on the judgment in an amount that does not
exceed the weekly average one-year constant maturity Treasury
yield that the Board of Governors of the Federal Reserve System
publishes in the calendar week that precedes the date of the
judgment. Notwithstanding any other law or any interest rate
specified in the contract or other writing that created the debt,
the debt buyer may not receive any interest on the judgment other
than the interest specified in this paragraph.
  (b) Collect attorney fees only if the contract or other writing
that created and is evidence of the debt obligates the debtor to
pay attorney fees if the debt buyer prevails in a legal action to
collect the debt.
  (5) A debt buyer's violation of the provisions of this section
through any direct or indirect action, conduct or practice is an
unlawful collection practice under ORS 646.639. + }
  SECTION 2. ORS 646.639 is amended to read:
  646.639. (1) As used in   { - subsection (2) of - }  this
section { +  and section 1 of this 2013 Act + }:
  (a) 'Consumer' means a natural person who purchases or acquires
property, services or credit for personal, family or household
purposes.
  (b) 'Consumer transaction' means a transaction between a
consumer and a person   { - who - }   { + that + } sells, leases
or provides property, services or credit to consumers.

    { - (c) 'Commercial creditor' means a person who in the
ordinary course of business engages in consumer transactions. - }

    { - (d) - }  { +  (c) + } 'Credit' means   { - the - }  { +
a + } right   { - granted by - }  { +  that + } a creditor { +
grants + } to a consumer to defer payment of a debt, to incur a
debt and defer   { - its - }  payment { +  of the debt + }, or to
purchase or acquire property or services and defer payment
 { - therefor - }  { +  for the property or services + }.
   { +  (d) 'Creditor' means a person that engages in consumer
credit transactions. + }
  (e) 'Debt' means   { - any - }  { +  an + } obligation or
alleged obligation
  { - arising - }  { +  that arises + } out of a consumer
transaction.
  (f) 'Debtor' means a consumer who owes or allegedly owes
  { - an obligation arising out of a consumer transaction - }
 { +  a debt + }.
  (g) 'Debt collector' means { + :
  (A) + }   { - any - }  { +  A + } person   { - who - }  { +
that + } by   { - any - }  direct or indirect action, conduct or
practice,   { - enforces - }  { +  collects + } or attempts to
  { - enforce an obligation that is owed or due to any commercial
creditor, or alleged to be owed or due to any commercial
creditor, by a consumer as a result of a consumer transaction - }
 { +  collect a debt owed, or alleged to be owed, to a creditor;
or
  (B) A debt buyer, as defined in section 1 of this 2013 Act + }.
  (h) 'Person' means an individual, corporation, trust,
partnership, incorporated or unincorporated association or any
other legal entity.
  (2) It   { - shall be - }  { +  is + } an unlawful collection
practice for a debt collector, while collecting or attempting to
collect a debt to do any of the following:
  (a) Use or threaten   { - the - }  { +  to + } use   { - of - }
force or violence to cause physical harm to a debtor or to the
debtor's family or property.
  (b) Threaten arrest or criminal prosecution.
  (c) Threaten   { - the seizure, attachment or sale of - }  { +
to seize, attach or sell + } a debtor's property when   { - such
action can only be taken pursuant to - }  { +  doing so requires
a + } court order   { - without disclosing - }  { +  and the debt
collector does not disclose + } that prior court proceedings are
required { +  to seize, attach or sell the debtor's property + }.
  (d) Use profane, obscene or abusive language in communicating
with a debtor or the debtor's family.
  (e) Communicate with   { - the - }   { + a + } debtor or any
member of the debtor's family repeatedly or continuously or at
times known to be inconvenient to   { - that person - }  { +  the
debtor or any member of the debtor's family and + } with intent
to harass or annoy the debtor or any member of the debtor's
family.
  (f) Communicate or threaten to communicate with a debtor's
employer concerning the nature or existence of the debt.
  (g) Communicate { + ,  + }without the debtor's
permission { + , + } or threaten to communicate with
 { - the - }   { + a + } debtor at the debtor's place of
employment if the place { +  of employment + } is other than the
debtor's residence, except that the debt collector may:
  (A) Write to   { - the - }   { + a + } debtor at the debtor's
place of employment if   { - no - }  { +  a + } home address
is { +  not + } reasonably available and if the envelope does not
reveal that the communication is from a debt collector other than
 { - a provider of - }  { +  the person that provided + } the
goods, services or credit from which the debt arose.

  (B) Telephone a debtor's place of employment without informing
any other person of the nature of the call or identifying the
caller as a debt collector but only if the debt collector in good
faith has made an unsuccessful attempt to telephone the debtor at
the debtor's residence during the day or during the evening
between the hours of 6 p.m. and 9 p.m. The debt collector may not
contact the debtor at the debtor's place of employment more
frequently than once each business week and may not telephone the
debtor at the debtor's place of employment if the debtor notifies
the debt collector not to telephone at the debtor's place of
employment or if the debt collector knows or has reason to know
that the debtor's employer prohibits the debtor from receiving
such communication. For the purposes of this subparagraph, any
language in any { +  agreement, contract or + } instrument
 { - creating - }  { +  that creates or is evidence of + } the
debt
  { - which - }  { +  and that + } purports to authorize
telephone calls at the debtor's place of employment   { - shall
not be considered as giving - }  { +  does not give + }
permission to the debt collector to call the debtor at the
debtor's place of employment.
  (h) Communicate with   { - the - }   { + a + } debtor in
writing without clearly identifying the name of the debt
collector, the name of the person, if any, for whom the debt
collector is attempting to collect the debt and the debt
collector's business address, on all initial communications. In
subsequent communications involving multiple accounts, the debt
collector may eliminate the name of the person, if any, for whom
the debt collector is attempting to collect the debt, and the
term 'various' may be substituted in
  { - its - }  place { +  of the person's name + }.
  (i) Communicate with   { - the - }   { + a + } debtor orally
without disclosing to the debtor within 30 seconds { +  after
beginning the communication + } the name of the individual
 { - making the contact - }  { +  who is initiating the
communication + } and the true purpose   { - thereof - }  { +  of
the communication + }.
  (j)   { - Cause - }  { +  Conceal the true purpose of a
communication in such a way as to cause + } any expense to
 { - the - }   { + a + } debtor in the form of long distance
telephone calls, telegram fees or other charges
  { - incurred by a - }  { +  the debtor might incur by using
a + } medium of communication  { - , by concealing the true
purpose of the debt collector's communication - } .
  (k) Attempt to or threaten to enforce a right or remedy
 { - with knowledge or reason to know - }  { +  while knowing or
having reason to know  + }that the right or remedy does not
exist, or threaten to take any action   { - which - }  { +
that + } the debt collector in the regular course of business
does not take.
  (L) Use   { - any - }  { +  a + } form of communication
 { - which - }  { +  that + } simulates legal or judicial process
or   { - which - }  { +  that + } gives the appearance of being
authorized, issued or approved by a governmental agency, { +
a + } governmental official or an attorney at law   { - when it
is not in fact so approved or authorized - }  { +  if a
governmental agency, a governmental official or an attorney at
law has not in fact approved or authorized the communication + }.
  (m) Represent that an existing debt may be increased by the
addition of attorney fees, investigation fees or any other fees
or charges when   { - such - }  { +  the + } fees or charges may
not legally be added to the existing debt.
  (n) Collect or attempt to collect   { - any - }  interest or
 { - any - } other charges or fees in excess of the actual debt
unless   { - they are expressly authorized by - }  the
agreement { + , contract or instrument + }
  { - creating - }  { +  that creates + } the debt { +  expressly
authorizes + } or
  { - expressly allowed by - }  { +  a + } law { +  expressly
allows the interest or other charges or fees + }.
  (o) Threaten to assign or sell   { - the - }   { + a + }
debtor's account with an attending misrepresentation or
implication that the debtor would lose any defense to the debt or
would be subjected to harsh, vindictive or abusive collection
tactics.
   { +  (3)(a) It is an unlawful collection practice for a debt
collector that is acting as a debt buyer or on behalf of a debt
buyer to:
  (A) Bring an action or initiate an arbitration proceeding
against a debtor or otherwise attempt to collect a debt if the
debt collector knows or reasonably should know that an applicable
statute of limitations bars the action, arbitration proceeding or
collection attempt; or
  (B) Bring an action or initiate an arbitration proceeding
against a debtor or otherwise attempt to collect a debt without
valid documentation that shows:
  (i) The name of the original creditor, written as the original
creditor used the name in dealings with the debtor;
  (ii) The name and address of the debtor;
  (iii) The original creditor's account number for the debt, as
shown in the original creditor's records;
  (iv) A copy of the contract or other writing that the debtor
signed and that is evidence of the original debt;
  (v) An itemized accounting of the amount the debt collector
claims that the debtor owes, including all fees and charges; and
  (vi) Evidence that the debt collector owns the specific debt
instrument or account that is the subject of the action,
proceeding or collection attempt.
  (b) As used in this subsection, 'original creditor' has the
meaning given that term in section 1 of this 2013 Act. + }
    { - (3) - }   { + (4) + } It   { - shall be - }  { +  is + }
an unlawful collection practice for a debt collector, by use of
any direct or indirect action, conduct or practice, to enforce or
attempt to enforce an obligation made void and unenforceable by
the provisions of ORS 759.720 (3) to (5).
   { +  (5) It is an unlawful collection practice for a debt
collector to use any direct or indirect action, conduct or
practice to violate a provision of section 1 of this 2013
Act. + }
  SECTION 3. ORS 646.641 is amended to read:
  646.641. (1)   { - Any - }  { +  A + } person { +  that is + }
injured as a result of  { +  another person's  + }willful use or
employment   { - by another person - }  of an unlawful collection
practice may bring an action in an appropriate court to enjoin
the practice or to recover actual damages or   { - $200 - }  { +
$1,000 + }, whichever is greater. The court or the jury may award
punitive damages, and the court may provide such equitable relief
as   { - it - }  { +  the court + } deems necessary or proper.
  (2)   { - In any action brought by a person under this section,
the court may award reasonable attorney fees to the prevailing
party. - }   { + The court may award reasonable attorney fees and
costs at trial and on appeal to a prevailing plaintiff in an
action under this section. The court may award reasonable
attorney fees and costs at trial and on appeal to a prevailing
defendant only if the court finds that the plaintiff did not have
an objectively reasonable basis for bringing the action or
asserting the ground for appeal. + }
  (3)   { - Actions brought under this section shall be commenced
within one year from the date of the injury. - }  { +  A person
that brings an action under this section must bring the action
within two years after the later of the date on which:
  (a) The injury occurred; or
  (b) A court dismissed or entered judgment in an action to
collect a debt from the person. + }
  SECTION 4.  { + ORS 646.643 is repealed. + }
  SECTION 5.  { + Section 1 of this 2013 Act, the amendments to
ORS 646.639 and 646.641 by sections 2 and 3 of this 2013 Act and
the repeal of ORS 646.643 by section 4 of this 2013 Act apply to
legal actions that begin on or after the effective date of this
2013 Act. + }
                         ----------