Revision: Jan. 17, 2013, midnight
HB 339-FN – AS INTRODUCED
2013 SESSION
08/03
HOUSE BILL 339-FN
AN ACT relative to consumer credit.
SPONSORS: Rep. C. Rice, Merr 27; Rep. Davis, Merr 20
COMMITTEE: Commerce and Consumer Affairs
This bill requires debt collectors to provide documentation of certain consumer debts before collecting them.
This bill also requires debt collectors to give notice to consumers before initiating a suit or arbitration.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
13-0727
08/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Thirteen
AN ACT relative to consumer credit.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Consumer Collection Practices. Amend RSA by inserting after chapter 399-G the following new chapter:
CHAPTER 399-H
399-H:1 Title and Scope.
I. This chapter shall be known and cited as the “Consumer Collection Practices Act.” This chapter shall be liberally and remedially construed to effectuate its purpose. The purpose of the chapter is to protect consumers, and this chapter is to be construed as a consumer protection statute for all purposes.
II. Should a court decide that any provision of this chapter is unconstitutional, preempted, or otherwise invalid, that provision shall be severed and such decision shall not affect the validity of the chapter other than the part severed.
399-H:2 Definitions. The following definitions apply in this chapter:
I. “Consumer” means a natural person.
II. “Consumer debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.
III. “Debt collector” means any person who regularly collects or attempts to collect, directly or indirectly, consumer debts owed or due or asserted to be owed or due another. The term does not include any officer or employee of a creditor who, in the name of the creditor, collects debts for such creditor, but it does include any creditor who, in the process of collecting its own debts, uses any name other than its own which would indicate that a third person is collecting or attempting to collect such debts.
IV. “Debt buyer” means a person or entity that is engaged in the business of purchasing delinquent or charged-off consumer loans or consumer credit accounts, or other delinquent consumer debt for collection purposes, whether it collects the debt itself or hires a third party for collection or an attorney-at-law for litigation in order to collect such debt. A debt buyer is considered to be a debt collector for all purposes.
V. “Original creditor” means the last entity to extend credit to the consumer for the purchase of goods or services, for the lease of goods, or as a loan of money. The original creditor shall be identified by the name that it used in its dealings with the consumer.
399-H:3 Requirements for Debt Collection.
I. No person shall attempt to collect on a consumer debt without obtaining reasonable verification that the consumer owes the debt in the amount claimed, which shall include:
(a) Complete, authenticated documentation that the person attempting collection is the owner of the specific debt instrument or account at issue; and
(b) Reasonable verification of the consumer’s liability and the amount of the debt allegedly owed by the consumer. For purposes of this subparagraph, reasonable verification shall include:
(1) Documentation of the name of the original creditor;
(2) The name, last address, date of birth, and last four digits of the Social Security Number of the consumer as it appeared on the original creditor’s records;
(3) The consumer’s last account number with the original creditor;
(4) The date that the debt was incurred, and the date and amount of the last payment by the consumer toward the debt; in the case of credit, the date that the debt was incurred shall be the last extension made for the purchase of goods or services, for the lease of goods, or as a loan of money;
(5) A copy of the signed contract, signed application, or other documents that provides evidence of the consumer’s liability and the terms thereof; and
(6) An itemized accounting of the amount claimed to be owed, including the amount of the principal; the amount of any interest, fees, or charges; and whether the charges were imposed by the original creditor, a debt collector, or a subsequent owner of the debt. If the debt arises from a credit card, the account shall include copies of the last 24 periodic statements required by the Truth in Lending Act, 15 U.S.C. section 1637(b), that evidence the transactions, purchases, fees, and charges that comprise the debt.
II. Copies of actual business records containing the above documentation shall be provided to the consumer, upon request, within 20 days of such request.
III. No debt collector that is a debt buyer or acting on behalf of a debt buyer shall make any written statement in connection with any attempt to initiate or pursue the collection of a debt unless that statement is supported by the evidence set forth in paragraph I which has been reviewed by the debt buyer. The documentary evidence shall be retained on file by the debt buyer for a period of at least 5 years and shall be made available to any affected consumer without a fee within 5 business days of a request. An affidavit or other sworn statement referring to documents not attached or included as part of that statement shall not be sufficient to meet this requirement.
IV. Whenever a payment is received by a debt collector, including a debt buyer, toward payment of a consumer debt, an original receipt or an exact copy thereof shall be furnished to the person from whom payment is received within 10 days of payment. All receipts shall:
(a) Show the amount and date paid, the name of the debt buyer, the account number assigned by the debt buyer, the name of the original creditor, and the account number issued by the original creditor (redacted for security purposes to show only the last 4 digits). If the debt buyer is in possession of the names of any prior purchasers of the debt and the account numbers issued by those purchasers, this information shall also be included.
(b) State clearly and conspicuously whether the payment is accepted as payment in full or as a full and final compromise of the debt. If any part of the debt will be owing after the payment is made, the receipt shall state clearly and conspicuously the balance due after payment is credited.
V. Copies of all receipts issued pursuant to this section shall be kept by the debt collector for 3 years.
VI. A debt collector shall confirm in writing to the consumer, within 5 business days, any debt payment schedule or settlement agreement reached regarding a consumer debt.
VII. In all communications concerning a consumer debt, the debt collector shall list a telephone number for which a call to that number shall be either:
(a) Answered by a natural person qualified to address consumer inquiries concerning communications the debt collection agency has with consumers; or
(b) Routed to such a natural person 60 seconds after the call is linked to the collector’s telephone line for such number and that shall be answered by such natural person within 3 minutes after the call is routed. The required call-back number shall be answered by a natural person during all times when the collector conducts business with consumers.
VIII. Notwithstanding RSA 570-A, a consumer may record any telephone conversation between the consumer and a debt collector or debt buyer, without the knowledge or consent of the collector. Any such recording shall be admissible in federal and state courts or other legal proceedings respecting debt collection practices or seeking collection of a consumer debt.
IX. Notwithstanding RSA 524:6-a, a debt collector shall not seek a warrant for the arrest of a consumer for any action or failure to act that arises or relates to a civil lawsuit, unless the consumer has committed a violation of the criminal code.
399-H:4 Limitations on Actions for Consumer Debts.
I. Any action for the collection of a consumer debt shall be commenced within 3 years of the accrual of the cause, which shall be the earlier of the date of charge-off, placement for collection, or 180 days after the last regular payment. This period shall apply whether the claim sounds in contract, account stated, open account, or other cause, and notwithstanding the provisions of any other statute of limitations unless that statute provides for a shorter limitations period. This paragraph shall apply to all claims brought after the effective date of this chapter.
II. Any waiver by any consumer of any protection provided by or any right of the consumer under this section is void, and may not be enforced by any federal or state court or any other person.
III. If a consumer debt has been charged-off or placed for collection, or there has not been any payment on the debt for over 180 days, any subsequent payment toward the debt shall not extend the 3-year limitations period, nor shall it bar the consumer from asserting any defenses to the collection of a consumer debt. If a payment on a defaulted or charged-off debt completely cures the default and pays off any delinquency, then a new cause of action may accrue upon a subsequent default or charge-off.
IV. When the period within which an action may be commenced under this section has expired, the right to collect the consumer debt is extinguished as well as the remedy. No person shall attempt to collect a consumer debt after the 3-year period described in paragraph I has expired.
V. Any action for collection of a consumer debt shall be based on only a claim for breach of contract and not on an open account, account stated, quantum meruit or other cause of action. This provision does not preclude the consumer’s right to raise a defense based upon the reasonable value of services provided.
399-H:5 Requirements for Lawsuits Involving Consumer Debts.
I. No debt collector shall bring suit or initiate an arbitration proceeding against a consumer to collect on a consumer debt without first giving the consumer written notice of the intent to file a legal action at least 30 days in advance. The written notice shall include the name, address, and telephone number of the debt collector, the name of the original creditor and the original creditor’s last account number (redacted for security purposes to show only the last 4 digits), a copy of the contract or other document evidencing the consumer debt, and an itemized accounting of all amounts claimed to be owed.
II. In any action brought by a debt collector to collect a consumer debt, all of the following materials must be attached to the complaint:
(a) A copy of the contract or other writing evidencing the original debt, which must contain a written signature of the defendant or evidence of the consumer’s agreement by electronic means in compliance with Section 101(c) of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. section 7001(c). If the debt arises from a credit card and no document signed by the consumer to evidence liability ever existed, then reasonable verification shall include copies of documents generated when the credit card was actually used, including the disclosures required by 15 U.S.C sections 1637(a) and (b).
(b) An itemization of the amount sought, by:
(1) the amount owed for goods or services, the amount owed for the lease of goods, or the amount of credit extended;
(2) interest, fees, and charges imposed by the original creditor;
(3) interest, fees, and charges imposed by any debt buyer or other assignee of the debt, if applicable;
(4) attorney’s fees;
(5) any other fees, costs, or charges sought or imposed;
(6) the amount and date of the last payment by the consumer before default or charge-off, whichever is earlier; and
(7) each payment credited to the debt after default or charge-off.
(c) If the action is brought by a debt buyer or other assignee of the debt, a copy of the assignment or other writing establishing that the debt buyer or assignee is entitled to collect the debt. If the debt has been assigned more than once, each assignment or other writing evidencing transfer of the interest in the debt must be attached and authenticated to establish an unbroken chain of ownership or assignment. Each assignment or other writing evidencing transfer of ownership or the right to collect must contain the original creditor’s account number (redacted for security purposes to show only the last 4 digits) of the debt purchased or otherwise assigned and the date of purchase and assignment, and must clearly show the consumer’s correct name associated with the original account number.
III. In any action to collect a consumer debt, a consumer’s failure to respond to a request for admissions shall not be deemed an admission unless the request is served in accordance with the rules of superior court, upon an attorney for the consumer.
399-H:6 Preservation of Legal Rights.
I. Prior to a dispute arising, a written agreement shall not waive or have the practical effect of waiving the rights of a party to that agreement to resolve that dispute by obtaining:
(a) Injunctive, declaratory, or other equitable relief;
(b) Relief on a class-wide basis;
(c) Punitive damages;
(d) Multiple or minimum damages as specified by statute;
(e) Attorney’s fees and costs as specified by statute or as available at common law; or
(f) A hearing at which that party can present evidence in person.
II. Prior to a dispute arising, a written agreement shall not require or have the practical effect of requiring that any aspect of a resolution of a dispute between the parties to the agreement be kept confidential. This provision shall not affect the rights of the parties to agree that certain specified information is a trade secret or otherwise confidential or to later agree, after the dispute arises, to keep a resolution confidential.
III. Any provision in a written agreement violating this section shall be void and unenforceable. A court may refuse to enforce other provisions of the agreement as equity may require.
IV. Any person who is a party to an agreement that violates this section can bring an action in court to reform such an agreement so that it complies with this chapter. The party or parties responsible for drafting the offending provisions shall be liable for the reasonable attorney’s fees and costs of the person or entity bringing the action if that action prevails or where, after the action is commenced, the parties reform the contract voluntarily.
399-H:7 Enforcement; Remedies. Any violation of the provision of this chapter shall also constitute an unfair and deceptive act or practice within the meaning of RSA 358-A:2, and may be enforced by the attorney general pursuant to RSA 358-A.
2 Exemption from Attachment and Execution. Amend RSA 511:2, XIX to read as follows:
XIX. Subject to the Uniform Fraudulent Transfer Act, RSA 545-A, any interest in, including any payment or distribution of any kind from, a retirement plan or arrangement qualified for tax exemption purposes under present or future acts of Congress; provided, any transfer or rollover contribution between retirement plans shall not be deemed a transfer which is fraudulent as to a creditor under the Uniform Fraudulent Transfer Act. “Retirement plan or arrangement qualified for tax exemption purposes” shall include without limitation, trusts, custodial accounts, insurance, annuity contracts, and other properties and rights constituting a part thereof. By way of example and not by limitation, retirement plans or arrangements qualified for tax exemption purposes permitted under present acts of Congress include defined contribution plans and defined benefit plans as defined under the Internal Revenue Code (IRC), individual retirement accounts including Roth IRAs and education IRAs, individual retirement annuities, simplified employee pension plans, Keogh plans, IRC section 403(a) annuity plans, IRC section 403(b) annuities, and eligible state deferred compensation plans governed under IRC section 457. This paragraph shall be in addition to and not a limitation of any other provision of New Hampshire law which grants an exemption from attachment or execution and every other species of forced sale for the payment of debts. This paragraph shall be effective for retirement plans and arrangements in existence on, or created after January 1, 1999, but shall apply only to extensions of credit made, and debts arising, after January 1, 1999.
3 Effective Date. This act shall take effect January 1, 2014.
LBAO
13-0727
01/15/13
HB 339-FN - FISCAL NOTE
AN ACT relative to consumer credit.
FISCAL IMPACT:
Due to time constraints, the Office of Legislative Budget Assistant is unable to provide a fiscal note for this bill, as introduced, at this time. When completed, the fiscal note will be forwarded to the House Clerk's Office.