AB 2440: Fair debt collection practices: debt collector responsibilities.

The Rosenthal Fair Debt Collection Practices Act prohibits debt collectors from engaging in certain unlawful acts or practices, including using, or threatening the use of, physical force or violence, using obscene or profane language, and making false representations. The act also requires a debt collector to cease collection activities, until completion of a specified review, when an alleged debtor provides certain information to show that the debtor is a victim of an identity theft crime.

This bill would require a debt collector who is also the original creditor, upon determination that an alleged debt is not due and owning from a person, for any reason other than identity theft, to terminate debt collection activities based on this determination. The bill would also require a debt collector, upon request from a person under these circumstances, to provide a written notification to that person confirming that the debt is not due and owing within 30 calendar days after making its determination. The bill would additionally require a debt collector that has purchased the alleged debt or contracted with the original creditor to collect the alleged debt, within 10 days of being notified that the debt is not due and owing, to terminate collection. The bill would further require the debt collector, in cases in which adverse information about the person was furnished to a consumer credit reporting agency, within 10 business days after its determination, to notify the agency to correct and update that information.