Business groups in North Carolina are backing a bill pending in the states House that would lift restrictions the legislature passed in 2009 to protect people from nefarious and abusive collections.
Supporters for HB 541 include the North Carolina Chamber, the North Carolina Bankers Association, the North Carolina Retail Merchants Association and the state chapter of the National Federation of Independent Business, which represents small businesses.
The bill would eliminate a requirement that debt buyers must have detailed information about debts including when and where accounts originated and specifics about the amount of interest and fees before suing a consumer. The legislation would bring requirements for debt buyers in line with what other states demand. It "changes none of the existing protections for consumers against abusive debt collection practices, Sheryl Wright, an executive with debt-buying giant Encore Capital Group said.
Encore Capital, based in San Diego, hired lobbyists in North Carolina to push the measure.
The broad business backing is generating dismay among consumer advocates.
Ellen Harnick, senior policy counsel at the Durham, N.C.-based Center for Responsible Lending, said, "It is just disappointing ... to think that there is this notion that we are going to change the laws of our state so that creditors can get a few more cents on the dollar than theyd otherwise get."
Kevin Anderson, who leads the consumer protection division in the North Carolina Attorney General's office, said the 2009 law has been effective in easing collection abuses. Such abuses have included lawsuits filed against consumers who actually had paid their bills or who couldn't even determine, based on the evidence presented in complaints, whether they had paid or successfully disputed. Such lawsuits, Anderson said, "seemed to be predicated on the notion that consumers just wont show up and contest the suits. They didnt have much evidence supporting their claims.
Supporters of the bill believe the 2009 law, which was approved with bipartisan support, made it unfairly burdensome to collect debt, essentially swinging the pendulum too far in the direction of consumer protections.