The California Fair Debt Collection Practices Act is known to lawyers as the Rosenthal Fair Debt Collection Practices Act. This law protects California consumers from any unfair, deceptive, or harassing debt collection practice. You can read the law starting at California Civil Code § 1788.1.
The California Fair Debt Collection Practices Act applies to both professional debt collectors, and the original creditor. Back in the 1970’s when California first passed the law, the only protection from debt collection harassment was the federal Fair Debt Collection Practices Act, or FDCPA. But the FDCPA applies only to professional debt collectors and entities that purchase defaulted debt, so creditors were still unregulated. California passed the Rosenthal Act to fill the gap, and applied it to the original creditor as well as debt collection agencies and repossession agencies.
So who is covered? Well, just about everyone collecting debts: banks, title lenders, credit card companies, car dealerships, auto finance companies, assignees of your contract, professional debt collection agencies, and repossession agents. Individual lawyers are not covered, but their law firms may be covered, and the federal FDCPA covers debt collection lawyers individually.
In 1999, the California Legislature greatly expanded the coverage of the Rosenthal Act. It incorporated by reference any violation of the federal FDCPA as also a violation of the Rosenthal Act. Now consumers could sue creditors not just for certain enumerated practices, but for any “unfair,” “deceptive or misleading,” or “abusive” act. The Rosenthal Act is now one of the strongest “little FDCPA” laws in the country and has had a real beneficial effect in stopping debt collection harassment.
The California Fair Debt Collection Practices Act provides that the prevailing consumer can recover their attorneys fees and costs from the creditor or debt collector. This means that consumer attorneys can work on a contingent fee at no out-of-pocket cost to the consumer. The law allows recovery for actual damages and statutory damages of $1,000 for “willful” conduct.
So what types of conduct are prohibited under the law? Here is a short list:
• Wrongful repossessions, including breaches of the peace, such as violent repos, repos into secured areas, and repossession of vehicles where there was no right to repossess.
• Ignoring a claim of identity theft.
• Calling family, friends, references, or your boss.
• Calling you at work.
• Calling you after you disputed the debt in writing.
• Enforcing an old judgment when they never sued you properly in the original proceeding.
• Reporting a duplicate debt collection account on your credit reports, when the original creditor is already on there.
The California Fair Debt Collection Practices Act has some special provisions for victims of identity theft. After the ID theft victim sends the company certain information, it must stop debt collection and complete an investigation. The magic information the identity theft victim has to send is the following:
• A Federal Trade Commission report of identity theft, on the FTC form.
• A written statement that has to include all of the following: (1) a statement that you are a victim of identity theft, with the specific facts that support your claim and why this debt is not yours; (2) a copy of your driver’s license; (3) a second form of ID; (4) any correspondence in which you disputed the debt; (5) utility bill or other bills showing you lived at a different residence from the one the identify thief used; (6) your telephone number or a statement to contact you only in writing; (7) identification of the identity thief, if you know it; (8) statement that the you did not authorize the use of the your name or personal information for incurring the debt; (9) a statement that says “I certify the representations made herein are true, correct, and contain no material omissions of fact,” with the date and place you signed, and your signature.
After receipt of all this information, the creditor or debt collector has to stop collections and do an investigation. Within ten business days, the business must notify any credit reporting agencies that the debt is disputed, and initiate an internal review. Ten business days after the review is completed, the business must notify you of the results. The business must determine “in good faith” that your dispute is incorrect, in order to continue collections after the internal review.
Unfortunately, I think the California legislature didn’t much help identity theft victims with this law. Almost no victim of identity theft is going to get all of these requirements exactly right, as they are too complex and read like the Code of Civil Procedure. This part of the law is going to remain a dead letter, unless consumers hire lawyers to write their letters for them.
The Trueblood Law Firm is highly experienced with the California Fair Debt Collection Practices Act. If you would like a free consultation, please fill out the contact form below, or book a consultation online at the upper right. You can also just call us at (800) 616-9325.