Oregon Passes Bill Allowing State AG to Sue Debt Collection Agencies
The Oregon legislature passed a bill that gives power to the state’s attorney general to sue for unlawful debt collection practices.
Oregon state legislators are tightening the reins on the accounts receivable management industry.
Last Wednesday, the Oregon House of Representatives and the Senate passed Senate Bill 328, which gives the Oregon Attorney General authority to sue any collection agency in the United States that practices unjust collection tactics against Oregon residents.
According to Tony Green, spokesman for the Oregon Department of Justice, the AG never had this power before. Green said that the AG could only bring companies to justice under the Unlawful Trade Protection Act (UTPA). A loophole in the UTPA prevented debt collection from falling under its authority, even though it applies to most industries in the state.
“The debt collectors did not fall under the UTPA,” Green told insideARM. “In the narrow sense we didn’t have the power to go after debt collectors, but in the broader sense, the AG has had power over dozens and dozens of other industries for a long time.”
Green mentioned that one reason the new AG, John Kroger, sanctioned Senate Bill 328 is because of hundreds of complaints raised by Oregon residents about illegal debt collection practices.
Complaints spanned from collectors calling debtors in the middle of the night, harassing debtors at work, threatening with arrests, using racial epithets and more.
“All of these are unlawful under the Unlawful Debt Collection Practices Act [sic]; however the state had no power to enforce it on behalf of the injured consumer,” Green said.
In response to the bill, ACA International’s Legislative Director of State Government Affairs David Cherner said, “It would have been better if more authority was vested with the actual regulator of debt collectors. I’m not convinced that this type of authority that’s now given to the AG is going to result in complaints decreasing. I think there are other ways to address the rise in complaints, and unfortunately I don’t believe that this proposal is going to necessarily do that...There are more effective ways to insure that complaints between consumers and debt collectors are resolved.”
An Oregon collection agency owner said the bill is going to impact the industry, because it is not going to do what the AG thinks it should do.
“The bill is not going to give [the Oregon AG] the power to take away unlawful debt collectors’ licenses in the state of Oregon to stop them from continued operation. He hasn’t accomplished anything,” the owner said.
Other Oregon collection agencies say that the new bill won’t change the way they do business. “I don’t think it is going to cause any problems with our agency,” Said Christine Cyphert, general manager of Account Collection Bureau, Inc.
The bill now goes before Governor Ted Kulongoski for his signature. Once the bill is signed it will go into effect on January 1, 2010.
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Comments
Comment from Someone in Collections on April 6, 2009 at 3:06PM EST
what took you so long?
Comment from Gerold Floyd on April 6, 2009 at 5:24PM EST
Perhaps if the ACA actually revoked membership regularly when members are found to be in violation of state and federal law, the industry would actually respond. Without the ACA membership, these rogue companies would find it harder to get business and would eventually be weeded out of the gene pool.
Comment from concern for the future on April 6, 2009 at 5:25PM EST
The collections industry needs to be able and willing to regulate itself. This continues to be our biggest challenge. We have allowed our industry to go unchecked for too long, now we are faced with legislators who dont fully understand what we do, to make the decisions for us. We need organizations such as our own ACA to be granted more authority to regulate and respond, and we need to do it before it is too late!
Comment from Anonymous on April 6, 2009 at 6:03PM EST
The hand writing is on the wall it seems inevitable that debt collection is going to be a much more regulated industry. The sensible thing would be to accept that reality and work to craft legislation that makes sense. If the industry continues to resist this the legislation will much worse than it needs to be and not helpful for the industry or for consumers.
Comment from Comet on April 7, 2009 at 4:03PM EST
Ninety five percent of the Oregon Complaints were about out of state collectors. I imagine that ratio may be the same in other states as well.