North Carolina is trying to pass legislation which will roll back protections for consumers who have bad debt purchased by debt buyers.
Senator Michael Lee from Wilmington, North Carolina is the sponsor of S.B. 511, titled Proof Required for Debt/Fees, which efforts to rollback the requirement the bad debt buyer must have detailed information about where and when the debt originated and details on how the fees were calculated, before suing the consumer.
I can only assume Senator Lee is just an ill informed legislator. Because either he doesn't care about to baseless claims his constituents face from bad debt buyers or he is becoming a cheerleader for debt collectors.
The News & Observer says Lee believes rolling back the 2009 consumer protections, which "passed by a unanimous vote in the Senate because, on a bipartisan basis, people were troubled on behalf of taxpayers about what was happening in the courts," is a smart thing to do.
Lee's argument about making it easier for collectors to sue is that consumers can challenge the suit in court and demand proof. But we already know people are afraid and don't challenge these suits so Lee's position is effectively to retard common sense protections already in place for consumers.
In my opinion, this legislation is ill-advised, ill-conceived and unwarranted. Besides, what we are really talking about here is just making sure the bad debt buyer has the information on hand to prove this is a valid debt. The only logical reason to remove this requirement would be so the bad debt buyer is not required to have this information on hand.
And to make this situation even more ridiculous, Lee is listed as an attorney on his North Carolina General Assembly page.
But maybe here is another clue what might be driving this slap in the face of North Carolina citizens. The website for Michael Lee, the attorney, says "The firm focuses on...debt acquisition."
Lee's idiotic sponsored bill wants to make a charge-off statement proof a debt is owed. Stricken as proof required by Lee's bill is the contract which must contain the signature of the defendant and copies of documents generated when the credit card was actually used. Left in the bill is just a requirement that to prove the debt, the debt collector needs "A copy of the contract, charge‑off statement, or other writing evidencing the original debt." Will a Post-It note be sufficient now?
And in order to get a summary judgment against consumers who already don't know how to defend themselves, all that will be required will be:
"The only evidence sufficient to establish the amount and nature of the debt shall be at least all of the following items:
(1) The original account number.
(2) The original creditor.
(3) The total amount claimed to be owed.
(4) An itemization of post charge‑off payments or credits, where applicable.
(5) The charge‑off balance, or, if the balance has not been charged off, an explanation of how the balance was calculated.
(6) An itemization of post charge‑off fees, where applicable.
(7) The date of last payment, where applicable.
(8) The amount of post charge‑off interest claimed, and the basis for the interest charged."
All of that appears to be easy to just pull from the air and write on that Post-It note rather than say, actually have proof and evidence to support the claim.
Senator Harry Brown from North Carolina is quoted as saying, "I think the intent of this bill is to find a balance between where we are today and maybe where we were before '09 ... I think the key point of this is, this is debt that someone has gone out and decided not to pay."
But even Brown is as clueless as Lee. This is not an issue about not paying a valid debt. It is an issue that the debt that is being collected or sued over is in fact a valid debt.
Lee appears to be sticking to his illusions this bill won't screw consumers, "The burden of proof is not shifted in this matter," Lee countered. "I'm getting a little frustrated there are so many misstatements coming out." - Source
Surely, simply asking that the bad debt buyer have the proof the debt is really owed with common sense documentation like statements and contracts is not a requirement that North Carolina lawmakers should try to dilute. What do you think?
This article by Steve Rhode first appeared on Get Out of Debt and was distributed by the Personal Finance Syndication Network.