Councilmember Cheh Re-Introduces Debt Buying Limitation Amendment Act

FOR IMMEDIATE RELEASE                                                                                                       

February 5, 2019

Communications Director: Kelly Whittier

Councilmember Cheh Re-Introduces Debt Buying Limitation Amendment Act

Bill to regulate harassing and predatory debt buyer practices

WASHINGTON, D.C. –Today, February 5^th, Councilmember Mary M. Cheh (D-Ward 3) re-introduced the “Debt Buying Limitation Amendment Act of 2019.” Debt buying occurs when entities, such as banks, sell large bundles of debt to third-party companies at a great discount. Many debt buying companies then attempt to collect on that debt from consumers by means often characterized as aggressive and predatory, frequently attempting to collect from the wrong consumer or on expired debt. In 2018, the Consumer Financial Protection Bureau reported that the most common debt collection complaint was from attempts to collect on a debt that was not owed.

“Debt buyers are notorious for harassment of consumers and their extended families in their efforts to collect. Regularly targeting seniors, veterans, and communities of color, they employ aggressive and confusing collection tactics ranging from repetitive phone calls to threats of harm or legal action. Furthermore, due to poor debt documentation, debt buyers often attempt to collect from the wrong consumer or on debt that is past the statute of limitations. This bill will provide greater safeguards for consumers and will hold these third-party companies to greater accountability when operating in the District,” said Councilmember Cheh.

The bill strengthens the District’s laws on debt collection in five ways:

1. Requires debt collectors to possess specific information about the debt before attempting to collect from a consumer. 
2. Places filing requirements, such as an accounting of the debt, on debt buyers that bring a cause of action against a consumer and provide penalties for violating those provisions.
3. Prohibits debt collectors from harassing a member of a consumer’s family in their debt-collecting activities, and would prohibit debt collectors from knowingly making false accusations about a consumer’s reputation for credit worthiness.
4. Ensures that a violation of the federal Fair Debt Collection Practices Act is also a violation of District law.
5. Eliminates the issue of “zombie debt:” that is, even after the statute of limitations has run on a debt, debt collectors persuade consumers to pay their debt.  They don’t tell the consumer, however, that a subsequent payment starts the statute of limitations over again and gives the debt collector another chance to sue the consumer.  Under this bill, any subsequent payment of a debt would not affect the statute of limitations—once it has expired, it would remain expired. 

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