[Congressional Record Volume 156, Number 133 (Wednesday, September 29, 2010)]
[Senate]
[Pages S7801-S7802]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FRANKEN (for himself and Mr. LeMieux):
  S. 3888. A bill to make improvements to the Fair Debt Collection 
Practices Act, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. FRANKEN. Mr. President, we have big problems in the debt 
collection industry that are long overdue in being addressed. Before I 
even begin, I wish to preface my remarks by saying when someone takes 
out a loan, they ought to pay it back. I have no intention of making it 
easier for people to skip out on legitimate debts. But we also cannot 
sit idly by as debt collectors prey on good people who have always 
tried to do the right thing.
  In 1977, by my calculations 33 years ago, Congress passed the Fair 
Debt Collection Practices Act to protect consumers from abusive 
practices by debt collectors. But times have changed and that law needs 
updating.
  Congress did not foresee the abuses that would arise as the growing 
debt collection industry found ways around the intent of the law to 
make a profit on the backs of hard-working Americans. All around our 
country, there are numerous stories of people being taken advantage of 
by unscrupulous debt collectors. The debt collectors do not let the law 
or common decency stop them from doing whatever it takes for them to 
make a buck.
  Those abuses include nasty and harassing calls, including the use of 
racial slurs and going after innocent people for debts they do not owe. 
In my State alone, and you can find similar stories from all over the 
country, consumers have been subjected to endless collection attempts 
over debts they do not recognize or debts they do not believe ever 
existed, debts that have already been paid, debts owed by different 
people, and debts that have been dramatically inflated.
  Just this week, I met a man from Minnesota who was repeatedly 
harassed by debt collectors for a debt he did not owe. And in spite of 
the evidence he provided, it did not stop until he got a lawyer. Debt 
collectors have time and money on their side, and now some are even 
exploiting scarce law enforcement resources to go after unsuspecting 
Minnesotans. Debt collection firms are preying on people with good 
intentions. But without the time and money to figure out their rights 
and to fight back, this is basically a David and Goliath situation, but 
here, usually Goliath is the one that wins.
  For some people, this bad situation spirals into an even worse 
nightmare. The problems in the debt collection industry first came to 
my attention in June, when my hometown newspaper, the Star Tribune, 
began a series on the subject about the story about the Minnesotans who 
have landed in jail because debt collectors were pursuing them for a 
debt.
  One woman who told her story, a Minneapolis resident, spent a full 
day in jail over a $250 credit card debt. During that day she was 
treated like a criminal, groped by an inmate, and offered drugs by 
another, and slept in a room with a dozen other women, sharing a toilet 
with no privacy.
  Here is what she told the newspaper.

       We hear every day about how there is no money for public 
     services. But it seems like the collectors have found a way 
     to get the police to do their work.

  She is right. These rogue debt collectors are gaming the system and 
using law enforcement resources for the sole purpose of corporate 
profit. Then there is the story of a woman from Richfield, MN, a suburb 
south of Minneapolis, who was arrested one day recently because she had 
defaulted on a credit card in 2006. A debt-buying company had bought up 
her old credit card debt and started sending collection notices. But 
she ignored them because she had never heard of that company. The next 
thing you know, she was stopped on the road and arrested.
  This harassment and abuse needs to be stopped. That is why Senator 
LeMieux and I are introducing the End Debt Collector Abuse Act, which 
would forbid debt collectors from seeking the arrest of a consumer in 
pursuit of payment. The court can initiate it, just not the debt 
collector.
  It would also require the debt collectors to provide consumers with, 
get this, basic information upfront such as an itemization of 
principle, fees, and interest that make up the debt, so that consumers 
can recognize a debt, determine whether the collectors' claim is 
accurate, and exercise their rights.

[[Page S7802]]

  This bill will also require the debt collectors provide the name of 
the original creditor upfront so we can avoid cases such as that women 
from Richfield, who received collection notices from a company she had 
never heard of and, quite reasonably, ignored them. It is just common 
sense to make sure that debt collectors provide this sort of basic 
information upfront so these misunderstandings do not happen.
  In the case a consumer does identify an inaccuracy with a debt claim, 
some debt collectors currently do little or nothing in terms of 
investigating whether the consumer's dispute is correct. For that 
reason, this bill would require the collectors conduct a thorough 
investigation when a consumer contacts them about a mistake. The 
collector would then have to provide the consumer with specific 
evidence about the dispute.
  Finally, the End Debt Collector Abuse Act would increase the 
penalties for violating consumer rights in order to crack down on the 
rogue debt collectors who have been blatantly and willfully ignoring 
current Federal prohibitions against harassing calls and other abusive 
practices.
  In this tough economy, Minnesotans are suffering enough right now and 
they deserve to have the basic protections against abusive debt 
collective practices. I urge my colleagues to join Senator LeMieux and 
me in supporting this bill so we can stop the abuse and harassment of 
hard-working Americans by rogue debt collection firms.
  Mr. President, I ask unanimous consent that the text of the bill and 
a list of supports be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3888

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``End Debt Collector Abuse Act 
     of 2010''.

     SEC. 2. ENHANCED VALIDATION NOTICES.

       (a) In General.--Section 809(a) of the Fair Debt Collection 
     Practices Act (15 U.S.C. 1692g(a)) is amended--
       (1) in paragraph (4), by striking ``and'' at the end; and
       (2) by striking paragraph (5) and inserting the following:
       ``(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 
     responsible for handling complaints on behalf of the debt 
     collector.''.
       (b) Effective Date.--This section and the amendments made 
     by this section shall become effective 1 year after the date 
     of enactment of this Act.

     SEC. 3. DISPUTE INVESTIGATIONS AND VERIFICATION.

       Section 809(b) of the Fair Debt Collection Practices Act 
     (15 U.S.C. 1692g(b)) is amended--
       (1) by inserting after ``(b)'' the following: ``Disputed 
     Debts.--
       ``(1) In general.--''; and
       (2) by striking ``Collection activities'' and inserting the 
     following:
       ``(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.
       ``(3) Collection activities.--Collection activities''.

     SEC. 4. AWARD OF DAMAGES.

       (a) Additional Damages Indexed for Inflation.--
       (1) In general.--Section 813 of the Fair Debt Collection 
     Practices Act (15 U.S.C. 1692k) is amended by adding at the 
     end the following:
       ``(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).''.
       (2) Applicability.--The increases made under section 813(f) 
     of the Fair Debt Collection Practices Act, as added by 
     paragraph (1) of this subsection, shall apply with respect to 
     failures to comply with a provision of such Act (15 U.S.C. 
     1601 et seq.) occurring on or after the date of enactment of 
     this Act.
       (b) Injunctive Relief.--Section 813(d) of the Fair Debt 
     Collection Practices Act (15 U.S.C. 1692k(d)) is amended by 
     adding at the end the following: ``In a civil action alleging 
     a violation of this title, the court may award appropriate 
     relief, including injunctive relief.''.

     SEC. 5. SEEKING A WARRANT FOR ARREST OF DEBTOR AS AN UNFAIR 
                   DEBT COLLECTION PRACTICE.

       (a) In General.--Section 808 of the Fair Debt Collection 
     Practices Act (15 U.S.C. 1692f) is amended by adding at the 
     end the following:
       ``(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.''.
       (b) Construction.--Paragraph (9) of such section 808, as 
     added by subsection (a), shall not be construed to limit a 
     court's inherent authority to hold a debtor in civil 
     contempt, nor to limit a debt collector's ability to seek a 
     writ of execution or similar remedy to take possession of 
     property in order to satisfy a valid judgment of debt.
                                  ____

       The following have endorsed the End Debt Collector Abuse 
     Act:
       National Consumer Law Center, Consumers Union; National 
     Consumers League, Center for Responsible Lending, Service 
     Employees International Union (SEIU), The Leadership 
     Conference on Civil and Human Rights, National Association of 
     Consumer Advocates, National Council of La Raza, Consumer 
     Action, National Association for the Advancement of Colored 
     People (NAACP), Minnesota Attorney General Lori Swanson, 
     Legal Services Advocacy Project (Minnesota), Family 
     Partnership (Minnesota), Minneapolis Urban League, Minnesota 
     Community Action Partnership, Jewish Community Action 
     (Minnesota), Housing Preservation Project (Minnesota), 
     Lutheran Social Services of Minnesota--Financial Counseling 
     Services, Catholic Charities' Office for Social Justice 
     (Minnesota), Twin Cities Habitat for Humanity (Minnesota), 
     Downtown Congregations to End Homelessness (Minnesota), 
     Metropolitan Consortium of Community Developers (Minnesota).
                                 ______