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S. 3350 (112th): End Debt Collector Abuse Act of 2012


The text of the bill below is as of Jun 27, 2012 (Introduced). The bill was not enacted into law.


II

112th CONGRESS

2d Session

S. 3350

IN THE SENATE OF THE UNITED STATES

June 27, 2012

(for himself and Mr. Blumenthal) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To make improvements to the Fair Debt Collection Practices Act, and for other purposes.

1.

Short title

This Act may be cited as the End Debt Collector Abuse Act of 2012.

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 made by or on behalf of the consumer on the subject debt and the amount of the debt at that time;

(6)

the name and address of the last person to extend credit with respect to the debt;

(7)

an itemization of the principal, fees, interest, and any other charges that make up the debt, including any other charges added after the date of the last payment made by or on behalf of the consumer on the subject debt;

(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.

3.

Medical debt provisions

(a)

Findings

Section 802 of the Fair Debt Collection Practices Act (15 U.S.C. 1692) is amended—

(1)

by redesignating subsection (e) as subsection (f); and

(2)

by inserting after subsection (d) the following:

(e)

Medical debt is unique among types of consumer debt in that—

(1)

with very few exceptions, consumers seek out health care services out of medical need, not choice;

(2)

consumers typically do not know the cost of health care services in advance and are not in a position to negotiate a lower price; and

(3)

overly aggressive medical debt collection can discourage consumers from seeking needed healthcare services, with dire financial, physical and public health consequences for themselves and their communities.

.

(b)

Prohibiting medical facility contacts

Section 806 of the Fair Debt Collection Practices Act (15 U.S.C. 1692d) is amended by adding at the end the following:

(7)

Communicating or attempting to communicate with a consumer in connection with the collection of any debt in a hospital emergency department, labor and delivery department, or any department where critical care medical services are provided, such as the intensive care unit. Nothing in this paragraph prohibits a health care provider from providing information to a consumer about a debt in response to a direct request from the consumer or discussing a debt at the time the consumer is discharged.

.

(c)

Actions constituting unfair medical debt collection practices

Section 808 of the Fair Debt Collection Practices Act (15 U.S.C. 1692f) is amended by adding at the end the following:

(9)

Withholding emergency medical services, taking action to delay such services, threatening to withhold such services, or giving the impression that such services will be withheld until a debt is paid.

(10)

Using protected health information, as defined in regulations promulgated pursuant to section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2 note), except to the extent as is absolutely necessary to provide adequate information to consumers.

.

(d)

Treatment of medical debt

The Fair Debt Collection Practices Act (15 U.S.C. 1692a et seq.) is amended by adding at the end the following new section:

820.

Treatment of medical debt

(a)

In general

Sections 806, 807 (other than paragraph (11)), 808, 811, and 813, shall apply to the collection of a medical debt, whether or not the debt is being collected directly by the creditor or on behalf of the creditor by a third party, and regardless of whether such debt is current or past due.

(b)

Availability of information

Any person attempting to collect a medical debt shall—

(1)

in the initial written communication to the consumer—

(A)

prominently disclose the availability of any charity care coverage (or the equivalent thereof), financial assistance, discounts based on income eligibility, or public or private insurance coverage that may assist in the payment of all or part of the debt; and

(B)

provide the consumer with information regarding how to apply for such programs; and

(2)

in the initial oral communication to the consumer—

(A)

orally disclose the availability of any charity care coverage (or the equivalent thereof), financial assistance, discounts based on income eligibility, or public or private insurance coverage that may assist in the payment of all or part of the debt; and

(B)

provide the consumer with information regarding how to apply for such programs.

(c)

Definition

For purposes of this section, the term medical debt means debt arising from the receipt of medical services, products, or devices.

.

4.

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

.

5.

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 Bureau 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 Bureau 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..

6.

Warrant for arrest as 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:

(11)

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 (11) of section 808 of the Fair Debt Collection Practices Act, as added by subsection (a), shall not be construed to limit the inherent authority of a court to hold a debtor in civil contempt, nor to limit the ability of a debt collector to seek a writ of execution or similar remedy to take possession of property in order to satisfy a valid judgment of debt.