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WBK Industry News - State Regulatory Developments

Maine Revises its Fair Debt Collection Practices Act

On June 16, 2017, Maine Governor Paul LePage signed into law a bill, Maine Legislative Document 1199 (“L.D. 1199”), which amends the Maine Fair Debt Collection Practices Act (“MEFDCPA”) and establishes new requirements for debt buyers.  The changes made by L.D. 1199 will go into effect on January 1, 2018.

The bill defines a “debt buyer” to mean a person that is regularly engaged in the business of purchasing charged-off consumer debt for collection purposes, whether the person collects the debt or hires a third party, which may include an attorney-at-law, in order to collect the debt.  However, a “debt buyer” does not include a “supervised financial organization,” as defined in Me. Rev. Stat. tit. 9-A, § 1-301(38-A) (e.g., banks and trust companies), or a person that acquires charged-off consumer debt incidental to the purchase of a portfolio predominantly consisting of consumer debt that has not been charged-off.  Pursuant to L.D. 1199, a debt buyer is considered to be a debt collector under the MEFDCPA and must obtain a debt collector license from the Maine Superintendent of Consumer Credit Protection.

Moreover, L.D. 1199 prohibits a debt buyer from collecting or attempting to collect on a debt, or selling or otherwise transferring ownership of a debt, unless the debt buyer possesses: (1) the name of the owner of the debt; (2) the original creditor’s name at the time of the charge-off; (3) the original creditor’s account number used to identify the debt at the time of the charge-off, if the original creditor used an account number to identify the debt at the time of charge-off; (4) the principal amount due at charge-off; (5) an itemization of interest and fees, if any, incurred after charge-off claimed to be owed and whether the interest and fees were imposed by the original creditor or any subsequent owners of the debt; (5) the date that the debt was incurred or the date of the last charge billed to the consumer’s account for goods or services received (if the debt is not from a revolving credit account); (6) the date of the last extension of credit for the purchase of goods or services, or for the loan of money (if the debt is from a revolving credit account); (7) the date and amount of the last payment, if applicable; (8) the names of all persons or entities that owned the debt after the time of the charge-off, if applicable, and the date of each sale or transfer; (9) documentation establishing that the debt buyer is the owner of the specific debt at issue; and (10) a copy of the contract, application, or other documents evidencing the consumer’s liability for the debt.

The bill also requires a debt buyer to conduct criminal background checks on its officers and employees who are actively engaged in the collection of debt or have access to consumer credit information.  In addition, L.D. 1199 makes it unlawful for a debt buyer to sell, collect or attempt to collect a debt that has been paid, settled or discharged in bankruptcy.  Further, the bill requires a debt buyer to provide specific documents when bringing a collection action against a consumer (e.g., a copy of the contract or other document evidencing the consumer’s agreement to the debt, and a copy of the bill of sale or other writing establishing that the debt buyer is the owner of the debt).

The full text of L.D. 1199 can be found at: http://www.mainelegislature.org/legis/bills/getPDF.asp?paper=HP0836&item=3&snum=128.