The state of New Jersey's Assembly Consumer Affairs Committee on Thursday approved a law designed to help consumers combat wrongful collection practices. The issue now moves to the full Assembly for a possible floor vote at an as-yet-unscheduled time.
The "New Jersey Fair Debt Collection Practices Act," among many provisions, would ban collectors from contacting debtors: at any time or place known to be inconvenient to the debtor, including no earlier than 8 a.m. and no later than 9 p.m.; if the collector knows the debtor is represented by a lawyer; at the debtor's place of employment, except under certain circumstances.
Violators would face a fine of up to $10,000 for a first offense and $20,000 for any additional offenses. A violation also could result in cease-and-desist orders from the state attorney general's office and a possible award of damages, attorney fees and lawsuit costs.
"We're doing nothing here to relieve a consumer of a rightful debt but this is a fairness bill that's needed more than ever to ensure consumers aren't harassed by unscrupulous debt collectors," says Assemblyman John J. Burzichelli, a Democrat and a co-sponsor of the proposal. "What we're doing here is creating guidelines under which debt collectors may conduct business, defining the rights of consumers and prescribing penalties for violations. At it's core, this is simply consumer protection."
Adds Assemblyman Matthew Milam, also a Democrat and a co-sponsor of the bill. "What we're doing here is putting a stop to harassing, oppressing, intimidating and abusive conduct by those collecting debts."
The bill, if passed, also would prohibit collectors from communicating with the debtor by a written communication that readily displays - possibly to someone other than the recipient - any information about the debt or uses language indicating debt collection. It would keep collectors from disclosing information about a debt to any family member, before obtaining a judgment against the debtor, except to locate the debtor.
It would require that, within five days after the initial communication with a debtor, a debt collector send the debtor a written notice containing information about the debt, the identity of the creditor, how to dispute the debt and that the debt collector will obtain verification of the debt if it is disputed.
The bill also would require a debt collector to stop all collection activities upon receipt of a written statement from the debtor claiming they were the victim of identity theft, which must include a copy of the police report and either the Federal Trade Commission's standardized ID Theft Affidavit or a written certification statement.
A report released last week by the Federal Trade Commission revealed identity theft and collections at the top of a consumer complaint list, (see story). A survey by the National Association of Attorneys General showed collection, auto sales and home repairs leading a national list of consumer complaints.