Bill Text: OR SB577 | 2011 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to debt collection practices.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB577 Detail]

Download: Oregon-2011-SB577-Introduced.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 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 1208

                         Senate Bill 577

Sponsored by Senator BONAMICI

                             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 as
introduced.

  Establishes requirements for legal action brought by debt buyer
to collect debt. Makes violation unlawful collection practice.
  Increases amount of damages in action for unlawful collection
practice. Prohibits award of attorney fees and costs to
prevailing debt collector in action for unlawful collection
practice unless court finds that debtor had no objectively
reasonable basis for bringing action or asserting ground for
appeal.
  Increases time period during which debtor must commence action
for unlawful collection practice and provides that time period
begins upon discovery of unlawful collection practice.

                        A BILL FOR AN ACT
Relating to debt collection practices; creating new provisions;
  and amending ORS 646.639 and 646.641.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 646.639 is amended to read:
  646.639. (1) As used in   { - subsection (2) of - }  this
section:
  (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 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 right granted by
a creditor 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 who in the ordinary course
of business engages in consumer transactions. + }
  (e) 'Debt' means   { - any - }  { +  an + } obligation or
alleged obligation arising 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   { - any - }  { +  a + } person
who { + , + } 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. 'Debt collector' includes a debt buyer as
defined in section 2 of this 2011 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 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 a debtor's
property when such action can only be taken pursuant to court
order without disclosing that prior court proceedings are
required.
  (d) Use profane, obscene or abusive language in communicating
with a debtor or the debtor's family.
  (e) Communicate with the debtor or any member of the debtor's
family repeatedly or continuously or at times known to be
inconvenient to that person 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 debtor at the debtor's place of employment
if the place is other than the debtor's residence, except that
the debt collector may:
  (A) Write to the debtor at the debtor's place of employment if
no home address is reasonably available and if the envelope does
not reveal that the communication is from a debt collector other
than a provider of 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 the debt   { - which - }  { +  that + } purports to
authorize telephone calls at the debtor's place of employment
 { - shall - }   { + may + } not be considered as giving
permission to the debt collector to call the debtor at the
debtor's place of employment.
  (h) Communicate with the 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.
  (i) Communicate with the debtor orally without disclosing to
the debtor within 30 seconds the name of the individual making
the contact and the true purpose thereof.
  (j) Cause any expense to the debtor in the form of long
distance telephone calls, telegram fees or other charges incurred
by 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 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 - }  { +  the communication + } is not in fact so
approved or authorized.
  (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 - }  { + fees or + } other charges   { - or fees - }  in
excess of the actual debt unless   { - they - }  { +  the
interest or fees or other charges + } are expressly authorized by
the agreement { + , contract or instrument + } creating the debt
or  { + otherwise  + }expressly allowed by law.
  (o) Threaten to assign or sell the 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) 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).
   { +  (4) It is an unlawful collection practice for a debt
buyer, as defined in section 2 of this 2011 Act, by use of any
direct or indirect action, conduct or practice, to violate a
provision of section 2 of this 2011 Act. + }
  SECTION 2.  { + (1)(a) The definitions in ORS 646.639 apply to
this section.
  (b) As used in this section:
  (A) 'Debt buyer' means:
  (i) A person engaged in the business of purchasing delinquent
consumer loans, delinquent consumer credit accounts or other
delinquent consumer debts for collection purposes, regardless of
whether the debt buyer collects the debt, hires a third party to
collect the debt or hires an attorney to pursue legal action to
collect the debt; and
  (ii) A debt collector acting as a debt buyer.
  (B) 'Legal action' means any lawsuit or legal proceeding,
including but not limited to mediation or arbitration.
  (2) A debt buyer that takes legal action to collect a debt, or
to attempt to collect a debt, shall:
  (a) Give the debtor written notice of the intent to take legal
action, sent to the debtor's last known address at least 30 days
in advance of commencing the legal action. If the running of the
applicable statute of limitations for collecting the debt ends
less than 30 days before the debt buyer intends to take legal
action, the time period during which legal action must be brought
under the applicable statute of limitations is extended by the
number of days, not to exceed 30 days, required to provide 30
days' notice before commencing legal action. The written notice
must include, at a minimum:
  (A) The name, address and telephone number of the debt buyer;
  (B) The name of the original creditor;
  (C) The original account number of the debt;
  (D) The balance due on the debt and whether the amount of the
balance due includes interest and fees; and
  (E) A clear and conspicuous statement informing the debtor
that:
  (i) A statute of limitations for collecting the debt may apply;
  (ii) The debtor should obtain legal advice as to when the
running of the applicable statute of limitations ends; and
  (iii) The debtor's payment of any amount after the date on
which the running of the statute of limitations ends reaffirms
the debt and restarts the running of the statute of limitations
for collecting the debt.
  (b) In the initial pleading filed to commence a legal action to
collect a debt, include the following:
  (A) The name of the original creditor;
  (B) The name of the current owner of the debt;
  (C) The last four digits of the original account number of the
debt;
  (D) The date of default or charge-off and the amount due at
that time;
  (E) The balance due on the debt and whether the amount of the
balance due includes interest and fees; and
  (F) The relevant terms of the underlying agreement, contract or
instrument creating the debt if not attached to the pleading.
  (3) Prior to entry of a default judgment against a debtor in a
legal action brought by a debt buyer to collect a debt, the court
shall require the debt buyer to submit a written statement made
under oath or affirmation stating:
  (a) That a written notice of intent to take legal action as
required under subsection (2)(a) of this section was sent to the
debtor at the debtor's last known address;
  (b) The balance due on the debt;
  (c) The basis for attorney fees, if requested; and
  (d) That the applicable statute of limitations for collecting
the debt has not run or, if extended under subsection (2)(a) of
this section, the date on which the running of the extended
statute of limitations ends. + }
  SECTION 3. ORS 646.641 is amended to read:
  646.641. (1)   { - Any - }  { +  A + } person injured as a
result of 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 - }  { +  or an amount up to $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 - }  { +  an + } action brought by a person
under this section, the court may award  { + a prevailing debtor
 + }reasonable attorney fees { +  and costs  + }  { - to the
prevailing party - } . { +  The court may award reasonable
attorney fees and costs at trial and on appeal to a prevailing
debt collector only if the court finds there was no 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 - }  { +  two years + } from the date of
the   { - injury - }  { +  discovery of the unlawful collection
practice + }.
  SECTION 4.  { + Section 2 of this 2011 Act and the amendments
to ORS 646.639 and 646.641 by sections 1 and 3 of this 2011 Act

apply to legal actions commenced on or after the effective date
of this 2011 Act. + }
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