CFC Supports SB 890 – The Fair Debt Buyers Practices Act

Bill Update: Unfortunately, SB 890 (Leno) failed passage out of the Assembly Banking and Finance Committee on a 3-3 vote and is now dead. 

CFC Position: Support

The Consumer Federation of California strongly supports Senate Bill 890, the Fair Debt Buyers Practices Act because our current system lacks transparency.

The Federal Trade Commission has called on state legislatures to address the problem of the ‘broken’ debt collection litigation system. Debt buyers have been cited for ‘robo-signing’ affidavits that state they have verified debtors’ records.  The lack of a thorough review of debtors’ records often goes hand-in-hand with a lack of documentary evidence showing how the amount of debt sought was calculated or proving that it is from the right person.

SB 890 requires that debt buyers have essential information about a debt before they try to collect it or bring a lawsuit, and share that information with the consumer on request. Under SB 890, a debt buyer would have to obtain, before it starts to collect the debt, certain information about the debt including the original creditor, account number and debt amount, the consumer’s name and address as it appeared on the original account, and an itemized accounting of the amount claimed to be owed.

California’s courts are being inundated debt collection law suits. This bill establishes rules that discourage false or confused claims and reduce the costly, unmeritorious claims that are crowding the system. For these reasons CFC supports this legislation.