The New Jersey State Consumer Affairs Committee has approved the “Consumer Credit Fairness Act”, a bill that seeks to prevent debt buyers from harassing consumers. The legislation (A1535), sponsored by John Burzichelli and Celeste Riley, would prohibit unfair and deceptive practices. In a press release, Burzichelli said, “Scheming debt collection agencies that purchase outstanding consumer debt are finagling their way into the pockets of consumers by way of intimidation. Most of the time, the burden of proof is left to the consumer to prove it’s not their debt or the debt is paid. If you have no regard for NJ consumers, then you are an insult to the industry.”
The bill would prohibit debt buyers from trying to get a consumer to affirm that he or she owes a debt if the debt is past the statute of limitations or if the consumer has gone through the bankruptcy process. It would also prohibit debt buyers from collecting or trying to collect additional fees and interest, as well as filing suit against consumers for time-barred debt.
The bill also outlines the steps debt buyers must take when filing suit against a consumer. For example, the bill says that the debt buyer must have valid documentation that the consumer actually owes the debt in question, and that the debt buyer has verification of the amount of the debt. When filing a lawsuit, the debt buyer would have to include evidence of the original debt (such as credit card receipts), as well as evidence that the debt buyer actually owns the debt along with documentation about transfer of ownership. In addition, the bill would make it difficult for debt buyers to obtain default judgments, in that it would require them to submit authenticated records about the origins of the debt and payment history.
If a debt buyer were to violate the law, a consumer could obtain statutory damages of up to $1,000, along with court costs and attorney fees.
The bill will move to the full Assembly for consideration.