A Summary Of Senator Al Franken's Bill (S. 3888) To Amend The FDCPA

It is widely anticipated that Congress will amend the FDCPA in the near future, perhaps as soon as next year. Exactly how the Act will be amended, however, is still an open question.

On September 29, 2010, Senator Al Franken (D-MN) introduced a bill to amend the FDCPA, S.3888, which he styled as the "End Debt Collector Abuse Act of 2010." The most widely-publicized portion of the proposed bill is the section that prohibits collectors from seeking a warrant for the arrest of a debtor. But the real teeth in the bill can be found in its proposals to 1) expand the duties of collectors to provide information with the initial validation notice and in response to disputes received from consumers, 2) significantly increase statutory damages, and 3) allow courts to issue injunctive relief for violations of the Act.

A copy of the text of the bill appears in the window below.


S.3888 Al Franken Bill To Amend The FDCPA -

It seems highly unlikely that Congress will take any action on Senator Franken's bill this year, but it may become the starting point in the drive to amend the Act in the coming year. If S. 3888 were adopted into law without any changes, it would amend the FDCPA as follows:

1. Add a new subsection, 1692f(9), providing that "unfair or unconscionable means to collect or attempt to collect any debt" would include: "(9) A request by a debt collector to a court or any law enforcement agency for the issuance of a warrant for the arrest of a debtor or any other similar request that a debt collector knows or should know would lead to the issuance of an arrest warrant, in relation to collection of a debt."

2. Add new required language and new obligations for debt collectors in subsection 1692g(a), by requiring that the initial validation notice include:

"(5) the date of the last payment to the creditor on the subject debt by the consumer and the amount of the debt at the time of default;

(6) the name and address of the last person to extend credit with respect to the debt;

(7) an itemization of the principal, fees and interest that make up the debt and any other charges added after the date of the last payment to the creditor;

(8) a description of the rights of the consumer – (A) to request that the debt collector cease communication with the consumer under section 805(c); and (B) to have collection efforts stopped under subsection (b); and

(9) the name and contact information of the person who is responsible for handling complaints on behalf of the debt collector.”

3. Add new language to subsection 1692g(b)(2) which provides: "(2) Reasonable investigation and verification required. Upon receipt of a notification under paragraph (1) that a debt is disputed by the consumer, the debt collector shall undertake a thorough investigation of the substance of the dispute, and shall timely provide to the consumer specific responsive information and verification of the disputed debt."

4. Add a new remedy for injunctive relief to section 1692k(d) as follows: "In a civil action alleging a violation of this title, the court may award appropriate relief, including injunctive relief."

5. Add a new subsection 1692k(f) that would provide an increase in the amount of statutory damages the can be awarded under the FDCPA, and would then allow for subsequent annual increases in statutory damages, adjusted based upon the Consumer Price Index, as follows:

"(f) Adjustment for inflation.

(1) initial adjustment - Not later than 90 days after the date of the enactment of this subsection, the Commission shall provide a percentage increase (rounded to the nearest multiple of $100 or $1,000, as applicable) in the amounts set forth in such section equal to the percentage by which - (A) the Consumer Price Index for All Urban Consumers (all items, United States city average) for the 12-month period ending on the June 30 preceding the date on which the percentage increase is provided, exceeds (B) the Consumer Price Index for the 12-month period preceding January 1, 1978.

(2) Annual adjustments - With respect to any fiscal year beginning after the date of the increase provided under paragraph (1), the Commission shall provide a percentage increase (rounded to the nearest multiple of $100 or $1,000, as applicable) in the amounts set forth in this section equal to the percentage by which - (A) the Consumer Price Index for All Urban Consumers (all items, United States city average) for the 12-month period ending on the June 30 preceding the beginning of the fiscal year for which the increase is made, exceeds (B) the Consumer Price Index for the 12-month period preceding the 12-month period described in subparagraph (A)."

When he introduced the bill, Senator Franken explained that there were "big problems in the debt collection industry that are long overdue in being addressed" and that he had learned of these problems as a result of a series of articles about collectors featured in his local newspaper, the Minneapolis Star Tribune.

You can watch Senator Franken's Senate Floor Statement introducing the bill here: