WASHINGTON, DC– U.S. Sens. Cory Booker (D-NJ) and Mike Lee (R-UT) today introduced the Stop Debt Collection Abuse Act of 2017, a bill that will strengthen protections for consumers against predatory debt collection practices. Rep. Mia Love (R-UT) and Rep. Keith Ellison [D-MN] introduced a companion bill in the House of Representatives.
“From hardworking families to small businesses owners and students, too many Americans have fallen victim to predatory debt collection practices, and it is especially egregious when consumers are harassed by private collectors working on behalf of government agencies,” said Sen. Booker. “This bill will require that all debt collectors—including those acting on behalf of the government — are held to the same high standard and help ensure that consumers are treated with respect, integrity and fairness.”
"There is clear need for a consistent standard for debt collectors that contract with the federal agencies," said Sen. Lee. "Just like the Fair Debt Collection Practices Act protects consumers who owe private debts, this bill would protect individuals who owe debts to the Federal from harassment and exorbitant fees."
“Consumers deserve protection from bullying from government-hired debt collectors,” Rep. Love said. “This is also about fairness, by putting government-hired debt collectors on a level playing field with private debt collectors.”
The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from consumers. Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them. One of the biggest exemptions to the FDCPA, however, are debt collectors acting to pursue a debt owed to state or federal government entities.
The bill mandates all federal agencies be subject to the same high standards of the FDCPA. Additionally, it requires a first-of-its kind study of debt collection practices at the federal, state and local levels, including of the contracting processes and the efforts of some debt collectors to go after low-income families. This important study conducted by the Government Accountability Office (G.A.O.) would examine the practices of debt collection at all levels of government and help make the case for federal action. The bill would also ensure that debt buyers are treated as debt collectors for the purposes of the FDCPA and prevent debt collectors from charging exorbitant and unreasonable fees.
The Stop Debt Collection Abuse Act of 2017 would:
· Insist that all federal agencies be subject to the same high standards of the Federal Debt Collection Practices Act (FDCPA).
· Compel an important study conducted by the Government Accountability Office (G.A.O.) of the practices of debt collection at the federal, state and local levels.
· Clarify that the definition of consumer debt includes the penalties, fines, and fees owed by debtors to the federal government. It would also confirm that “debt buyers” are debt collectors for the purposes of FDCPA.
· Necessitate additional consumer protections, including that debt collectors working on behalf of the federal government cannot charge fees that are higher than 10% of the amount collected. It would also ensure that consumers who have been accidentally overpaid by the federal agents are covered under the FDCPA, which is not the case under current law.
In December 2015, Booker penned an op-ed for CNN on the prevalence of Americans being targeted and hassled by private collectors working to collect government debts.