Passed by the Senate March 1, 2011 YEAS 48   ________________________________________ President of the Senate Passed by the House April 1, 2011 YEAS 92   ________________________________________ Speaker of the House of Representatives | I, Thomas Hoemann, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SUBSTITUTE SENATE BILL 5574 as passed by the Senate and the House of Representatives on the dates hereon set forth. ________________________________________ Secretary | |
Approved ________________________________________ Governor of the State of Washington | Secretary of State State of Washington |
State of Washington | 62nd Legislature | 2011 Regular Session |
READ FIRST TIME 02/17/11.
AN ACT Relating to collection agencies; amending RCW 19.16.500; and reenacting and amending RCW 19.16.250.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 19.16.250 and 2001 c 217 s 5 and 2001 c 47 s 2 are
each reenacted and amended to read as follows:
No licensee or employee of a licensee shall:
(1) Directly or indirectly aid or abet any unlicensed person to
engage in business as a collection agency in this state or receive
compensation from such unlicensed person: PROVIDED, That nothing in
this chapter shall prevent a licensee from accepting, as forwardee,
claims for collection from a collection agency or attorney whose place
of business is outside the state.
(2) Collect or attempt to collect a claim by the use of any means
contrary to the postal laws and regulations of the United States postal
department.
(3) Publish or post or cause to be published or posted, any list of
debtors commonly known as "bad debt lists" or threaten to do so. For
purposes of this chapter, a "bad debt list" means any list of natural
persons alleged to fail to honor their lawful debts. However, nothing
herein shall be construed to prohibit a licensee from communicating to
its customers or clients by means of a coded list, the existence of a
check dishonored because of insufficient funds, not sufficient funds or
closed account by the financial institution servicing the debtor's
checking account: PROVIDED, That the debtor's identity is not readily
apparent: PROVIDED FURTHER, That the licensee complies with the
requirements of subsection (((9))) (10)(e) of this section.
(4) Have in his or her possession or make use of any badge, use a
uniform of any law enforcement agency or any simulation thereof, or
make any statements which might be construed as indicating an official
connection with any federal, state, county, or city law enforcement
agency, or any other governmental agency, while engaged in collection
agency business.
(5) Perform any act or acts, either directly or indirectly,
constituting the practice of law.
(6) Advertise for sale or threaten to advertise for sale any claim
as a means of endeavoring to enforce payment thereof or agreeing to do
so for the purpose of soliciting claims, except where the licensee has
acquired claims as an assignee for the benefit of creditors or where
the licensee is acting under court order.
(7) Use any name while engaged in the making of a demand for any
claim other than the name set forth on his or her or its current
license issued hereunder.
(8) Give or send to any debtor or cause to be given or sent to any
debtor, any notice, letter, message, or form, other than through proper
legal action, process, or proceedings, which represents or implies that
a claim exists unless it shall indicate in clear and legible type:
(a) The name of the licensee and the city, street, and number at
which he or she is licensed to do business;
(b) The name of the original creditor to whom the debtor owed the
claim if such name is known to the licensee or employee: PROVIDED,
That upon written request of the debtor, the licensee shall make a
reasonable effort to obtain the name of such person and provide this
name to the debtor;
(c) If the notice, letter, message, or form is the first notice to
the debtor or if the licensee is attempting to collect a different
amount than indicated in his or her or its first notice to the debtor,
an itemization of the claim asserted must be made including:
(i) Amount owing on the original obligation at the time it was
received by the licensee for collection or by assignment;
(ii) Interest or service charge, collection costs, or late payment
charges, if any, added to the original obligation by the original
creditor, customer or assignor before it was received by the licensee
for collection, if such information is known by the licensee or
employee: PROVIDED, That upon written request of the debtor, the
licensee shall make a reasonable effort to obtain information on such
items and provide this information to the debtor;
(iii) Interest or service charge, if any, added by the licensee or
customer or assignor after the obligation was received by the licensee
for collection;
(iv) Collection costs, if any, that the licensee is attempting to
collect;
(v) Attorneys' fees, if any, that the licensee is attempting to
collect on his or her or its behalf or on the behalf of a customer or
assignor;
(vi) Any other charge or fee that the licensee is attempting to
collect on his or her or its own behalf or on the behalf of a customer
or assignor;
(d) If the notice, letter, message, or form concerns a judgment
obtained against the debtor, no itemization of the amounts contained in
the judgment is required, except postjudgment interest, if claimed, and
the current account balance.
(9) Communicate in writing with a debtor concerning a claim through
a proper legal action, process, or proceeding, where such communication
is the first written communication with the debtor, without providing
the information set forth in subsection (8)(c) of this section in the
written communication.
(10) Communicate or threaten to communicate, the existence of a
claim to a person other than one who might be reasonably expected to be
liable on the claim in any manner other than through proper legal
action, process, or proceedings except under the following conditions:
(a) A licensee or employee of a licensee may inform a credit
reporting bureau of the existence of a claim((: PROVIDED, That)). If
the licensee or employee of a licensee reports a claim to a credit
reporting bureau, the licensee shall, upon receipt of written notice
from the debtor that any part of the claim is disputed, ((forward a
copy of such written notice to)) notify the credit reporting bureau of
the dispute by written or electronic means and create a record of the
fact of the notification and when the notification was provided;
(b) A licensee or employee in collecting or attempting to collect
a claim may communicate the existence of a claim to a debtor's employer
if the claim has been reduced to a judgment;
(c) A licensee or employee in collecting or attempting to collect
a claim that has not been reduced to judgment, may communicate the
existence of a claim to a debtor's employer if:
(i) The licensee or employee has notified or attempted to notify
the debtor in writing at his or her last known address or place of
employment concerning the claim and the debtor after a reasonable time
has failed to pay the claim or has failed to agree to make payments on
the claim in a manner acceptable to the licensee, and
(ii) The debtor has not in writing to the licensee disputed any
part of the claim: PROVIDED, That the licensee or employee may only
communicate the existence of a claim which has not been reduced to
judgment to the debtor's employer once unless the debtor's employer has
agreed to additional communications.
(d) A licensee may for the purpose of locating the debtor or
locating assets of the debtor communicate the existence of a claim to
any person who might reasonably be expected to have knowledge of the
whereabouts of a debtor or the location of assets of the debtor if the
claim is reduced to judgment, or if not reduced to judgment, when:
(i) The licensee or employee has notified or attempted to notify
the debtor in writing at his or her last known address or last known
place of employment concerning the claim and the debtor after a
reasonable time has failed to pay the claim or has failed to agree to
make payments on the claim in a manner acceptable to the licensee, and
(ii) The debtor has not in writing disputed any part of the claim.
(e) A licensee may communicate the existence of a claim to its
customers or clients if the claim is reduced to judgment, or if not
reduced to judgment, when:
(i) The licensee has notified or attempted to notify the debtor in
writing at his or her last known address or last known place of
employment concerning the claim and the debtor after a reasonable time
has failed to pay the claim or has failed to agree to make payments on
the claim in a manner acceptable to the licensee, and
(ii) The debtor has not in writing disputed any part of the claim.
(((10))) (11) Threaten the debtor with impairment of his or her
credit rating if a claim is not paid: PROVIDED, That advising a debtor
that the licensee has reported or intends to report a claim to a credit
reporting agency is not considered a threat if the licensee actually
has reported or intends to report the claim to a credit reporting
agency.
(((11))) (12) Communicate with the debtor after notification in
writing from an attorney representing such debtor that all further
communications relative to a claim should be addressed to the attorney:
PROVIDED, That if a licensee requests in writing information from an
attorney regarding such claim and the attorney does not respond within
a reasonable time, the licensee may communicate directly with the
debtor until he or she or it again receives notification in writing
that an attorney is representing the debtor.
(((12))) (13) Communicate with a debtor or anyone else in such a
manner as to harass, intimidate, threaten, or embarrass a debtor,
including but not limited to communication at an unreasonable hour,
with unreasonable frequency, by threats of force or violence, by
threats of criminal prosecution, and by use of offensive language. A
communication shall be presumed to have been made for the purposes of
harassment if:
(a) It is made with a debtor or spouse in any form, manner, or
place, more than three times in a single week, unless the licensee is
responding to a communication from the debtor or spouse;
(b) It is made with a debtor at his or her place of employment more
than one time in a single week, unless the licensee is responding to a
communication from the debtor;
(c) It is made with the debtor or spouse at his or her place of
residence between the hours of 9:00 p.m. and 7:30 a.m. A call to a
telephone is presumed to be received in the local time zone to which
the area code of the number called is assigned for landline numbers,
unless the licensee reasonably believes the telephone is located in a
different time zone. If the area code is not assigned to landlines in
any specific geographic area, such as with toll-free telephone numbers,
a call to a telephone is presumed to be received in the local time zone
of the debtor's last known place of residence, unless the licensee
reasonably believes the telephone is located in a different time zone.
(((13))) (14) Communicate with the debtor through use of forms or
instruments that simulate the form or appearance of judicial process,
the form or appearance of government documents, or the simulation of a
form or appearance of a telegraphic or emergency message.
(((14))) (15) Communicate with the debtor and represent or imply
that the existing obligation of the debtor may be or has been increased
by the addition of attorney fees, investigation fees, service fees, or
any other fees or charges when in fact such fees or charges may not
legally be added to the existing obligation of such debtor.
(((15))) (16) Threaten to take any action against the debtor which
the licensee cannot legally take at the time the threat is made.
(((16))) (17) Send any telegram or make any telephone calls to a
debtor or concerning a debt or for the purpose of demanding payment of
a claim or seeking information about a debtor((, for which the charges
are payable by the addressee or by the person to whom the call is
made)): PROVIDED, That:
(a) This subsection does not prohibit a licensee from attempting to
communicate by way of a cellular telephone or other wireless device:
PROVIDED, That a licensee cannot cause charges to be incurred to the
recipient of the attempted communication more than three times in any
calendar week when the licensee knows or reasonably should know that
the number belongs to a cellular telephone or other wireless device,
unless the licensee is responding to a communication from the debtor or
the person to whom the call is made.
(b) The licensee is not in violation of (a) of this subsection if
the licensee at least monthly updates its records with information
provided by a commercial provider of cellular telephone lists that the
licensee in good faith believes provides reasonably current and
comprehensive data identifying cellular telephone numbers, calls a
number not appearing in the most recent list provided by the commercial
provider, and does not otherwise know or reasonably should know that
the number belongs to a cellular telephone.
(c) This subsection may not be construed to increase the number of
communications permitted pursuant to subsection (13)(a) of this
section.
(((17))) (18) Call, or send a text message or other electronic
communication to, a cellular telephone or other wireless device more
than twice in any day when the licensee knows or reasonably should know
that the number belongs to a cellular telephone or other wireless
device, unless the licensee is responding to a communication from the
debtor or the person to whom the call, text message, or other
electronic communication is made. The licensee is not in violation of
this subsection if the licensee at least monthly updates its records
with information provided by a commercial provider of cellular
telephone lists that the licensee in good faith believes provides
reasonably current and comprehensive data identifying cellular
telephone numbers, calls a number not appearing in the most recent list
provided by the commercial provider, and does not otherwise know or
reasonably should know that the number belongs to a cellular telephone.
Nothing in this subsection may be construed to increase the number of
communications permitted pursuant to subsection (13)(a) of this
section.
(19) Intentionally block its telephone number from displaying on a
debtor's telephone.
(20) In any manner convey the impression that the licensee is
vouched for, bonded to or by, or is an instrumentality of the state of
Washington or any agency or department thereof.
(((18))) (21) Collect or attempt to collect in addition to the
principal amount of a claim any sum other than allowable interest,
collection costs or handling fees expressly authorized by statute, and,
in the case of suit, attorney's fees and taxable court costs. A
licensee may collect or attempt to collect collection costs and fees,
including contingent collection fees, as authorized by a written
agreement or contract, between the licensee's client and the debtor, in
the collection of a commercial claim. The amount charged to the debtor
for collection services shall not exceed thirty-five percent of the
commercial claim.
(((19))) (22) Procure from a debtor or collect or attempt to
collect on any written note, contract, stipulation, promise or
acknowledgment under which a debtor may be required to pay any sum
other than principal, allowable interest, except as noted in subsection
(((18))) (21) of this section, and, in the case of suit, attorney's
fees and taxable court costs.
(((20))) (23) Bring an action or initiate an arbitration proceeding
on a claim when the licensee knows, or reasonably should know, that
such suit or arbitration is barred by the applicable statute of
limitations.
(24) Upon notification by a debtor that the debtor disputes all
debts arising from a series of dishonored checks, automated
clearinghouse transactions on a demand deposit account, or other
preprinted written instruments, initiate oral contact with a debtor
more than one time in an attempt to collect from the debtor debts
arising from the identified series of dishonored checks, automated
clearinghouse transactions on a demand deposit account, or other
preprinted written instruments when: (a) Within the previous one
hundred eighty days, in response to the licensee's attempt to collect
the initial debt assigned to the licensee and arising from the
identified series of dishonored checks, automated clearinghouse
transactions on a demand deposit account, or other preprinted written
instruments, the debtor in writing notified the licensee that the
debtor's checkbook or other series of preprinted written instruments
was stolen or fraudulently created; (b) the licensee has received from
the debtor a certified copy of a police report referencing the theft or
fraudulent creation of the checkbook, automated clearinghouse
transactions on a demand deposit account, or series of preprinted
written instruments; (c) in the written notification to the licensee or
in the police report, the debtor identified the financial institution
where the account was maintained, the account number, the magnetic ink
character recognition number, the full bank routing and transit number,
and the check numbers of the stolen checks, automated clearinghouse
transactions on a demand deposit account, or other preprinted written
instruments, which check numbers included the number of the check that
is the subject of the licensee's collection efforts; (d) the debtor
provides, or within the previous one hundred eighty days provided, to
the licensee a legible copy of a government-issued photo
identification, which contains the debtor's signature and which was
issued prior to the date of the theft or fraud identified in the police
report; and (e) the debtor advised the licensee that the subject debt
is disputed because the identified check, automated clearinghouse
transaction on a demand deposit account, or other preprinted written
instrument underlying the debt is a stolen or fraudulently created
check or instrument.
The licensee is not in violation of this subsection if the licensee
initiates oral contact with the debtor more than one time in an attempt
to collect debts arising from the identified series of dishonored
checks, automated clearinghouse transactions on a demand deposit
account, or other preprinted written instruments when: (i) The
licensee acted in good faith and relied on their established practices
and procedures for batching, recording, or packeting debtor accounts,
and the licensee inadvertently initiates oral contact with the debtor
in an attempt to collect debts in the identified series subsequent to
the initial debt assigned to the licensee; (ii) the licensee is
following up on collection of a debt assigned to the licensee, and the
debtor has previously requested more information from the licensee
regarding the subject debt; (iii) the debtor has notified the licensee
that the debtor disputes only some, but not all the debts arising from
the identified series of dishonored checks, automated clearinghouse
transactions on a demand deposit account, or other preprinted written
instruments, in which case the licensee shall be allowed to initiate
oral contact with the debtor one time for each debt arising from the
series of identified checks, automated clearinghouse transactions on a
demand deposit account, or written instruments and initiate additional
oral contact for those debts that the debtor acknowledges do not arise
from stolen or fraudulently created checks or written instruments; (iv)
the oral contact is in the context of a judicial, administrative,
arbitration, mediation, or similar proceeding; or (v) the oral contact
is made for the purpose of investigating, confirming, or authenticating
the information received from the debtor, to provide additional
information to the debtor, or to request additional information from
the debtor needed by the licensee to accurately record the debtor's
information in the licensee's records.
Sec. 2 RCW 19.16.500 and 1997 c 387 s 1 are each amended to read
as follows:
(1)(a) Agencies, departments, taxing districts, political
subdivisions of the state, counties, and cities may retain, by written
contract, collection agencies licensed under this chapter for the
purpose of collecting public debts owed by any person, including any
restitution that is being collected on behalf of a crime victim.
(b) Any governmental entity as described in (a) of this subsection
using a collection agency may add a reasonable fee, payable by the
debtor, to the outstanding debt for the collection agency fee incurred
or to be incurred. The amount to be paid for collection services shall
be left to the agreement of the governmental entity and its collection
agency or agencies, but a contingent fee of up to fifty percent of the
first one hundred thousand dollars of the unpaid debt per account and
up to thirty-five percent of the unpaid debt over one hundred thousand
dollars per account is reasonable, and a minimum fee of the full amount
of the debt up to one hundred dollars per account is reasonable. Any
fee agreement entered into by a governmental entity is presumptively
reasonable.
(2) No debt may be assigned to a collection agency unless (a) there
has been an attempt to advise the debtor (i) of the existence of the
debt and (ii) that the debt may be assigned to a collection agency for
collection if the debt is not paid, and (b) at least thirty days have
elapsed from the time notice was attempted.
(3) Collection agencies assigned debts under this section shall
have only those remedies and powers which would be available to them as
assignees of private creditors.
(4) For purposes of this section, the term debt shall include fines
and other debts, including the fee ((required)) allowed under
subsection (1)(b) of this section.