Florida May be Getting Tougher Debt Collection Rules

Florida’s Office of Financial Regulation Thursday sent a proposal to Governor Rick Scott and his cabinet that would create new rules for debt collection agencies.

The proposal does not appear to be suggested legislation, rather new enforcement rules for the state’s financial regulators.

A major change in the rules would make filing complaints against collectors with the state much easier. Now, consumers are required to get their complaint form notarized. The new rules would abandon that requirement.

The new rules also place specific requirements on collection agencies in how they handle their records.  Debt collection agencies would be required to keep records that show a debtor’s name and address, the amount they originally owed and to whom, the date the account was referred to the collection agency, contact information for the original creditor, and a detailed record of all contacts and attempted contacts made by a debt collector, in addition to any payment information from a debtor. All records must be kept for three years after a debtor has satisfied the account or stopped trying to collect on it.

The proposed rules enumerate administrative penalties for violation of any debt collection rules. Penalties are separated into three classes: Class A violations ($1,000 – $3,500 per violation), Class B ($3,500 – $7,500) and Class C ($7,500 – $10,000).

The rules spell out 23 different violations and their penalties, with most aligning with federal debt collection laws. Upon the first violation, most penalties fall into Class A. But some violations are penalized at the Class B level on first occurrence.

For example, mailing “any communication to a debtor in an envelope or postcard with words typed, written, or printed on the outside of the envelope or postcard calculated to embarrass the debtor” is a Class B violation, as is publishing or posting “before the general public individual names or any list of names of debtors, commonly known as a deadbeat list, for the purpose of enforcing or attempting to enforce collection of consumer debts.” Out of state debt collectors who do not register with the state or those who use threats of violence will also find themselves subject to a Class B violation.

The proposed rules must be approved by the Governor and his cabinet before being published into the record. The full proposal can be found at http://www.flofr.com/Cabinet/Notices/OFRAgenda-Long-(6-16-11).pdf.