AN ACT Relating to
collection of business to business debts; and amending RCW 19.16.100 and
19.16.250.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
Sec. 1. RCW 19.16.100 and 1994 c
195 s 1 are each amended to read as follows:
Unless a different
meaning is plainly required by the context, the following words and phrases as
hereinafter used in this chapter shall have the following meanings:
(1) "Person"
includes individual, firm, partnership, trust, joint venture, association, or
corporation.
(2) "Collection
agency" means and includes:
(a) Any person directly
or indirectly engaged in soliciting claims for collection, or collecting or
attempting to collect claims owed or due or asserted to be owed or due another
person;
(b) Any person who
directly or indirectly furnishes or attempts to furnish, sells, or offers to
sell forms represented to be a collection system or scheme intended or
calculated to be used to collect claims even though the forms direct the debtor
to make payment to the creditor and even though the forms may be or are
actually used by the creditor himself in his own name;
(c) Any person who in
attempting to collect or in collecting his own claim uses a fictitious name or
any name other than his own which would indicate to the debtor that a third
person is collecting or attempting to collect such claim.
(3) "Collection
agency" does not mean and does not include:
(a) Any individual
engaged in soliciting claims for collection, or collecting or attempting to
collect claims on behalf of a licensee under this chapter, if said individual
is an employee of the licensee;
(b) Any individual
collecting or attempting to collect claims for not more than one employer, if
all the collection efforts are carried on in the name of the employer and if
the individual is an employee of the employer;
(c) Any person whose
collection activities are carried on in his or its true name and are confined
and are directly related to the operation of a business other than that of a
collection agency, such as but not limited to trust companies, savings and loan
associations, building and loan associations, abstract companies doing an
escrow business, real estate brokers, public officers acting in their official
capacities, persons acting under court order, lawyers, insurance companies,
credit unions, loan or finance companies, mortgage banks, and banks;
(d) Any person who on
behalf of another person prepares or mails monthly or periodic statements of
accounts due if all payments are made to that other person and no other
collection efforts are made by the person preparing the statements of account;
or
(e) An
"out-of-state collection agency" as defined in this chapter.
(4) "Out-of-state
collection agency" means a person whose activities within this state are
limited to collecting debts from debtors located in this state by means of
interstate communications, including telephone, mail, or facsimile
transmission, from the person's location in another state on behalf of clients
located outside of this state.
(5) "Claim"
means any obligation for the payment of money or thing of value arising out of
any agreement or contract, express or implied.
(6) "Statement of
account" means a report setting forth only amounts billed, invoices,
credits allowed, or aged balance due.
(7)
"Director" means the director of licensing.
(8) "Client"
or "customer" means any person authorizing or employing a collection
agency to collect a claim.
(9)
"Licensee" means any person licensed under this chapter.
(10) "Board"
means the Washington state collection agency board.
(11) "Debtor"
means any person owing or alleged to owe a claim.
(12)
"Commercial claim" means any obligation for payment of money or thing
of value arising out of any agreement or contract, express or implied, where
the transaction which is the subject of the agreement or contract is not
primarily for personal, family, or household purposes.
Sec. 2. RCW 19.16.250 and 1983 c
107 s 1 are each 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)(e) of this section.
(4) Have in his
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 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 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 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 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 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 its own behalf or
on the behalf of a customer or assignor.
(9) 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 the credit reporting bureau;
(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 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 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 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) Threaten the
debtor with impairment of his credit rating if a claim is not paid.
(11) 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 it again receives notification in writing that an attorney is
representing the debtor.
(12) 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;
(b) It is made with a
debtor at his or her place of employment more than one time in a single week;
(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.
(13) 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) 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) Threaten to take
any action against the debtor which the licensee cannot legally take at the
time the threat is made.
(16) 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.
(17) 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) 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)
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) of this section, and, in the case of suit,
attorney's fees and taxable court costs.
