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On August 3, 2021, DC City Council unanimously approved an amended version of the pending DC Emergency Collection Bill. If signed by the mayor of DC, the amended bill will become applicable on October 1, 2021.
The changes address many of the more demanding aspects of the original bill, including limiting call volumes, credit card details and the number of monthly statements required, initial communication requirements, proof of ownership for lawsuits, damages and date of enforceability.
Here is a brief overview of the changes between the original invoice and the amended invoice:
Limiting the call volume: The initial bill limited calls to three calls per consumer over a seven-day period. Although this limit remains in the bill, the amendment clarifies that the limit of three calls does not apply to calls made at the request of the consumer.
Retail requirements / monthly statements: In addition to itemized accounting, the original bill required debt collectors collecting credit card debts to send consumers twenty-four month statements. The amendment clarifies that itemized accounting is to be measured from the charge balance and changes the requirements for monthly statements to include only copies of the charge statement and the most recent monthly statement showing a purchase, payment or balance transfer.
Initial communication: The original invoice required debt collectors to provide numerous documents and information to the consumer within five days of the initial communication, whether or not the consumer requested them. Instead, the amended bill now requires the debt collector to include a 12-point bold notice in the initial communication that the consumer can request specific types of information and documents. The exact wording of the statement and other information that the debt collector must provide to the consumer is provided in the amended invoice.
Proof of ownership required for lawsuits: The original invoice required debt collectors to include in any legal action to collect a debt an assignment or writing indicating the last four digits of the original account number and the name of the debtor associated with that number. Instead, according to the amended bill, debt collectors must indicate (a) the date the debt was sold or assigned; (b) each previous owner and the date the receivable was assigned; and (c) the amount owed when the original creditor sold the account.
Damage Rewards: The original bill stipulated that if a debt collector violated the requirements of the bill and the applicable law, the debt collector “would be” liable to the consumer for certain types of damages, and included wording that damages were to be awarded by violation. The amended bill replaces “shall†with “may†and removes the award of damages for breach.
Applicability date: The amended bill specifies that it will only be applicable on October 1, 2021.
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InsideARM Perspective:
The original bill passed without a hearing or an opportunity to comment and ultimately included requirements that would have been impossible for debt collectors to meet. The changes to the bill are expected to allow DC City Council to achieve its goal of protecting consumers in a way that is feasible for the industry. While the bill has yet to be signed, the DC mayor is expected to eventually sign this version. Accounts receivable entities should be sure to read the amended bill in its entirety to ensure that they are prepared to comply with it when it comes into force.
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