Amended in Senate April 1, 2013

Senate BillNo. 233


Introduced by Senators Leno and Correa

February 11, 2013


begin deleteAn act to amend Section 1788.2 of the Civil Code, relating to debt collection. end deletebegin insertAn act to add Title 1.6C.5 (commencing with Section 1788.50) to Part 4 of Division 3 of the Civil Code, and to amend Sections 700.010, 706.103, 706.104, 706.108, and 706.122 of, and to add Section 581.5 to, the Code of Civil Procedure, relating to debt buyers.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 233, as amended, Leno. begin deleteFair debt collection practices. end deletebegin insertDebt buyers.end insert

begin insert

(1) Existing state and federal law regulate the practice of debt collection. Existing state law prohibits a debt collector from engaging in specified conduct, including the use of threats or causing a telephone to ring repeatedly to annoy the person called. Existing law prohibits a debt collector from obtaining an affirmation from a debtor of a consumer debt that has been discharged in bankruptcy, without clearly and conspicuously disclosing to the debtor, in writing, the fact that the debtor is not legally obligated to make such affirmation.

end insert
begin insert

This bill would enact the Fair Debt Buyers Practices Act, which would regulate the activities of a person or entity that has bought consumer debt and the circumstances in which the person may bring suit. The bill would prohibit a debt buyer, as defined, from making any written statement in an attempt to collect a consumer debt unless the debt buyer possesses information that the debt buyer is the sole owner of the specific debt at issue, the debt balance, as specified, and the name and address of the creditor at the time the debt was charged off, among other things. The bill would require the debt buyer to make certain documents available to the debtor, without charge, upon receipt of a request, within 15 days. The bill would require that a specified notice be included with the debt buyer’s first written communication with the debtor. The bill would require all settlement agreements between a debt buyer and a debtor to be documented in open court or otherwise in writing and would require a debt buyer who receives a payment on a debt to provide a receipt or statement containing certain information. The bill would prohibit a debt buyer from initiating a suit to collect a debt if the statute of limitations on the cause of action has expired. The bill would prescribe penalties for each violation of the act and would provide that its provisions may not be waived. The bill would require a debt buyer bringing an action on consumer debt to include certain information in his or her complaint. The bill would prohibit an entry of judgment in favor of a plaintiff debt buyer unless business records authenticated through a sworn declaration and relating to the debt and ownership of it, among other things, are submitted by the debt buyer to the court, and would permit a court to dismiss a debt buyer’s action to collect with prejudice if this information is not provided or if the debt buyer fails to appear or is not prepared on the date scheduled for trial.

end insert
begin insert

(2) Existing law establishes a process for the enforcement of money judgments and requires a levying officer to provide certain documents and information to a judgment debtor and to a designated employer in connection with wage garnishment. Existing law permits a process server also to serve an earnings withholding order on an employer and requires that the process server also serve certain documents at this time. Existing law requires an employer who is served with an earnings withholding order to provide certain documents to an employee who is a judgment debtor.

end insert
begin insert

This bill would require, in the circumstances described above, that a copy of the form that the judgment debtor may use to make a claim of exemption and a copy of the form used to provide a financial statement also be provided.

end insert
begin delete

The Rosenthal Fair Debt Collection Practices Act regulates the collection of debts and defines relevant terms for the purposes of its provisions.

end delete
begin delete

This bill would make technical, nonsubstantive changes to the definitions in the act.

end delete

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert
begin insert

The Legislature finds and declares the following:

end insert
begin insert

2(a) The collection of debt purchased by debt buyers has become
3a significant focus of public concern due to the adequacy of
4documentation required to be maintained by the industry in support
5of its collection activities and litigation.

end insert
begin insert

6(b) State law does not currently prescribe the specific nature
7of documentation that a debt buyer must maintain and produce in
8a legal action on the debt.

end insert
begin insert

9(c) Documentation used to support the collection of a debt must
10be sufficient to prove that the individual who is being asked to pay
11the debt is in fact the individual associated with the original
12contract or agreement, and that the amount of indebtedness is
13accurate.

end insert
begin insert

14(d) It is important to create documentation and process
15standards for the collection of consumer debt that all interested
16 parties can easily understand.

end insert
begin insert

17(e) Setting specific documentation and process standards will
18protect consumers, provide needed clarity to courts, and establish
19clearer criteria for debt buyers and the collection industry.

end insert
20begin insert

begin insertSEC. 2.end insert  

end insert

begin insertTitle 1.6C.5 (commencing with Section 1788.50) is
21added to Part 4 of Division 3 of the end insert
begin insertCivil Codeend insertbegin insert, to read:end insert

begin insert

22 

23Title begin insert1.6C.5.end insert  Fair Debt Buyers Practices Act

24

 

25

begin insert1788.50.end insert  

(a) As used in this title, “debt buyer” means a person
26or entity that is regularly engaged in the business of purchasing
27charged-off consumer loans, consumer credit accounts, or other
28delinquent consumer debt for collection purposes, whether it
29collects the debt itself, hires a third party for collection, or hires
30an attorney-at-law for collection litigation.

31(b) “Debt buyer” includes any parent, subsidiary, or other
32affiliate that exercises direct control over the person or entity
33described in subdivision (a).

34(c) The acquisition by a check services company of the right to
35collect on a paper or electronic check instrument, including an
36Automated Clearing House item, that has been returned unpaid
37to a merchant does not constitute a purchase of delinquent
38consumer debt under this title.

P4    1(d) Terms defined in Title 1.6C (commencing with Section 1788)
2shall apply to this title.

3

begin insert1788.52.end insert  

(a) A debt buyer shall not make any written statement
4to a debtor in an attempt to collect a consumer debt unless the
5debt buyer possesses the following information:

6(1) That the debt buyer is the sole owner of the debt at issue, or
7has authority to assert the rights of all owners of the debt.

8(2) The debt balance at charge off and an explanation of the
9amount, nature, and reason for all post-charge-off fees and
10charges, imposed by the charge-off creditor or any subsequent
11purchasers of the debt. This paragraph shall not be deemed to
12require a specific itemization of each charge.

13(3) The date of default or the date of the last payment.

14(4) The name and an address of the charge-off creditor at the
15time of charge off, and the charge-off creditor’s account number
16associated with the debt. The charge-off creditor’s name and
17address shall be in sufficient form so as to reasonably identify it.

18(5) The name and last known address of the debtor as they
19appeared in the charge-off creditor’s records prior to the sale of
20the debt. Where the debt was sold prior to January 1, 2014, the
21name and last known address as they appeared in the debt owner’s
22records on December 31, 2013, shall be sufficient.

23(6) The names and addresses of all persons or entities that
24purchased the debt after charge off, including the plaintiff debt
25buyer. The names and addresses of these persons or entities shall
26be in sufficient form so as to reasonably identify them.

27(b) A debt buyer shall not make any written statement to a debtor
28in an attempt to collect a consumer debt unless the debt buyer has
29access to a copy of a contract or other document evidencing the
30debtor’s agreement to the debt. If the claim is based on debt for
31which no signed contract or agreement exists, the debt buyer shall
32have access to a copy of a document provided to the debtor while
33the account was active, demonstrating that the debt was incurred
34by the debtor. For a revolving credit account, the most recent
35monthly statement recording a purchase transaction, last payment,
36or balance transfer shall be deemed sufficient to satisfy this
37requirement.

38(c) A debt buyer shall provide the information or documents
39identified in subdivisions (a) and (b) to the debtor without charge
40within 15 calendar days of receipt of a debtor’s written request
P5    1for information regarding the debt or proof of the debt. If the debt
2buyer cannot provide the information or documents within 15
3calendar days, the debt buyer shall cease all collection of the debt
4until the debt buyer provides the debtor the information or
5documents described in subdivisions (a) and (b). Except as
6provided otherwise in this title, the request by the debtor shall be
7consistent with the validation requirements contained in Section
81692g of Title 15 of the United States Code. A debt buyer shall
9provide all debtors with whom it has contact with an active postal
10address and an active e-mail address to which these requests can
11be sent. A debt buyer may also provide an active e-mail address
12to which these requests can be sent and from which information
13and documents can be delivered, if the parties agree.

14(d) (1) A debt buyer shall include with its first written
15communication with the debtor in no smaller than 12-point type,
16a separate prominent notice that provides:

17“You may request records showing the following: (1) that [insert
18name of debt buyer] has the right to seek collection of the debt;
19(2) the debt balance, including any additional fees and charges;
20(3) the date of default or the date of the last payment; (4) the name
21of the creditor and the account number associated with the debt;
22(5) the name and last known address of the debtor as it appeared
23in the creditor’s or debt buyer’s records prior to the sale of the
24debt, as appropriate; (6) the names of all persons or entities that
25have purchased the debt. You may also request from us a copy of
26the contract or other document evidencing your agreement to the
27debt.

28“A request for these records may be addressed to: [insert debt
29buyer’s active mailing address].”


31(2) When collecting on a time-barred debt where the debt is not
32past the date for obsolescence provided for in Section 605(a) of
33the Fair Credit Reporting Act (15 U.S.C. Sec. 1681c):


35“The law limits how long you can be sued on a debt. Because
36of the age of your debt, we will not sue you for it. If you do not pay
37the debt, [insert name of debt buyer] may [continue to] report it
38to the credit reporting agencies as unpaid.”


P6    1(3) When collecting on a time-barred debt where the debt is
2past the date for obsolescence provided for in Section 605(a) of
3the Fair Credit Reporting Act (15 U.S.C. Sec. 1681c):


5“The law limits how long you can be sued on a debt. Because
6of the age of your debt, we will not sue you for it, and we will not
7report it to any credit reporting agency.”


9(e) If a language other than English is principally used by the
10debt buyer in the initial oral contact with the debtor, a notice shall
11be provided to the debtor in that language within five working
12days.

13(f) In the event of a conflict between the requirements of
14subdivision (d) and federal law, so that it is impracticable to
15comply with both, the requirements of federal law shall prevail.

16

begin insert1788.54.end insert  

(a) All settlement agreements between a debt buyer
17and a debtor shall be documented in open court or otherwise
18reduced to writing. The debt buyer shall ensure that a copy of the
19written agreement is provided to the debtor.

20(b) A debt buyer that receives payment on a debt shall provide,
21within 30 calendar days, a receipt or monthly statement, to the
22debtor. The receipt or statement shall clearly and conspicuously
23show the amount and date paid, the name of the entity paid, the
24current account number, the name of the charge-off creditor, the
25account number issued by the charge-off creditor, and the
26remaining balance owing, if any. The receipt or statement may be
27provided electronically if the parties agree.

28(c) A debt buyer that accepts a payment as payment in full, or
29as a full and final compromise of the debt, shall provide, within
3030 calendar days, a final statement that complies with subdivision
31(b). A debt buyer shall not sell an interest in a resolved debt, or
32any personal or financial information related to the resolved debt.

33

begin insert1788.56.end insert  

A debt buyer shall not bring suit or initiate an
34arbitration or other legal proceeding to collect a consumer debt
35if the applicable statute of limitations on the debt buyer’s claim
36has expired.

37

begin insert1788.58.end insert  

In an action brought by a debt buyer on a consumer
38debt:

39(a) The complaint shall allege all of the following:

40(1) That the plaintiff is a debt buyer.

P7    1(2) The nature of the underlying debt and the consumer
2transaction or transactions from which it is derived, in a short and
3plain statement.

4(3) That the debt buyer is the sole owner of the debt at issue, or
5has authority to assert the rights of all owners of the debt.

6(4) The debt balance at charge off and an explanation of the
7amount, nature, and reason for all post-charge-off fees and
8charges, imposed by the charge-off creditor or any subsequent
9purchaser of the debt. This paragraph shall not be deemed to
10require a specific itemization of each charge.

11(5) The date of default or the date of the last payment.

12(6) The name and an address of the charge-off creditor at the
13time of charge off, and the charge-off creditor’s account number
14associated with the debt. The charge-off creditor’s name and
15address shall be in sufficient form so as to reasonably identify it.

16(7) The name and last known address of the debtor as they
17appeared in the creditor’s records prior to the sale of the debt. If
18the debt was sold prior to January 1, 2014, the debtor’s name and
19last known address as they appeared in the debt owner’s records
20on December 31, 2013, shall be sufficient.

21(8) The names and addresses of all persons or entities that
22purchased the debt after charge off, including the plaintiff debt
23buyer. The names and addresses of these persons or entities shall
24be in sufficient form so as to reasonably identify them.

25(9) That the debt buyer has complied with Section 1788.52.

26(b) A copy of the contract or other document described in
27subdivision (b) of Section 1788.52, shall be attached to the
28complaint.

29(c) The requirements of this title shall not be deemed to require
30the disclosure in public records of personal, financial, or medical
31information, the confidentiality of which is protected by any state
32or federal law.

33

begin insert1788.60.end insert  

(a) In an action initiated by a debt buyer, no default
34or other judgment may be entered against a debtor unless business
35records, authenticated through a sworn declaration, are submitted
36by the debt buyer to the court to establish the facts required to be
37alleged by paragraphs (3) to (8), inclusive, of subdivision (a) of
38Section 1788.58.

39(b) No default or other judgment may be entered against a
40debtor unless a copy of the contract or other document described
P8    1in subdivision (b) of Section 1788.52, authenticated through a
2sworn declaration, has been submitted by the debt buyer to the
3court.

4(c) In any action on a consumer debt, if a debt buyer plaintiff
5seeks a default judgment and has not complied with the
6requirements of this title, the court shall not enter a default
7judgment for the plaintiff and may, in its discretion, dismiss the
8action.

9(d) Except as provided in this title, this section is not intended
10to modify or otherwise amend the procedures established in Section
11585 of the Code of Civil Procedure.

12

begin insert1788.62.end insert  

(a) A debt buyer that violates any provision of this
13title with respect to any person shall be liable to that person in an
14amount equal to the sum of the following:

15(1) Any actual damages sustained by that person as a result of
16the violation, including, but not limited to, the amount of any
17judgment obtained by the debt buyer as a result of a time-barred
18suit to collect a debt from that person.

19(2) Statutory damages in an amount as the court may allow,
20which shall not be less than one hundred dollars ($100) nor greater
21than one thousand dollars ($1,000) per violation.

22(b) In the case of a class action, a debt buyer that violates any
23provision of this title shall be liable for any statutory damages for
24each named plaintiff as provided in paragraph (2) of subdivision
25(a). If the court finds that the debt buyer engaged in a pattern and
26practice of violating any provision of this title, the court may award
27additional damages to the class in an amount not to exceed the
28lesser of five hundred thousand dollars ($500,000) or 1 percent
29of the net worth of the debt buyer.

30(c) (1) In the case of any successful action to enforce liability
31under this section, the court shall award costs of the action,
32together with reasonable attorney’s fees as determined by the
33court.

34(2)  Reasonable attorney’s fees may be awarded to a prevailing
35debt buyer upon a finding by the court that the plaintiff’s
36prosecution of the action was not in good faith.

37(d) In determining the amount of liability under subdivision (b),
38the court shall consider, among other relevant factors, the
39frequency and persistence of noncompliance by the debt buyer,
P9    1the nature of the noncompliance, the resources of the debt buyer,
2and the number of persons adversely affected.

3(e) A debt buyer shall have no civil liability under this section
4if the debt buyer shows by a preponderance of evidence that the
5violation was not intentional and resulted from a bona fide error,
6and occurred notwithstanding the maintenance of procedures
7reasonably adopted to avoid any error.

8(f) An action to enforce any liability created by this title shall
9be brought within one year from the date of the last violation.

10(g) Recovery in an action brought under the Rosenthal Fair
11Debt Collection Practices Act (Title 1.6C (commencing with
12Section 1788) or the federal Fair Debt Collection Practices Act
13(15 U.S.C. Sec. 1692 et seq.)) shall preclude recovery for the same
14acts in an action brought under this title.

15

begin insert1788.64.end insert  

Any waiver of the provisions of this title is contrary
16to public policy, and is void and unenforceable.

end insert
17begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 581.5 is added to the end insertbegin insertCode of Civil Procedureend insertbegin insert,
18to read:end insert

begin insert
19

begin insert581.5.end insert  

In a case involving consumer debt, as defined in Section
201788.2 of the Civil Code, and as regulated under Title 1.6C.5
21(commencing with Section 1788.50) of Part 4 of Division 3 of the
22Civil Code, if the defendant debtor appears for trial on the
23scheduled trial date, and the plaintiff debt buyer either fails to
24appear or is not prepared to proceed to trial, and the court does
25not find a good cause for continuance, the court may, in its
26discretion, dismiss the action with or without prejudice.
27Notwithstanding any other law, in this instance, the court may
28award the defendant debtor’s costs of preparing for trial, including,
29but not limited to, lost wages and transportation expenses.

end insert
30begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 700.010 of the end insertbegin insertCode of Civil Procedureend insertbegin insert is
31amended to read:end insert

32

700.010.  

(a) At the time of levy pursuant to this article or
33promptly thereafter, the levying officer shall serve a copy of the
34following on the judgment debtor:

35(1) The writ of execution.

36(2) A notice of levy.

37(3) If the judgment debtor is a natural person, a copy of the form
38listing exemptions prepared by the Judicial Council pursuant to
39subdivision (c) of Sectionbegin delete 681.030 andend deletebegin insert 681.030,end insert the list of
40exemption amounts published pursuant to subdivisionbegin delete (d)end deletebegin insert (e)end insert of
P10   1Sectionbegin delete 703.150.end deletebegin insert 703.150, a copy of the form that the judgment
2debtor may use to make a claim of exemption pursuant to Section
3703.520, and a copy of the form the judgment debtor may use to
4provide a financial statement pursuant to Section 703.530.end insert

5(4) Any affidavit of identity, as defined in Section 680.135, for
6names of the debtor listed on the writ of execution.

7(b) Service under this section shall be made personally or by
8mail.

9begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 706.103 of the end insertbegin insertCode of Civil Procedureend insertbegin insert is
10amended to read:end insert

11

706.103.  

(a) The levying officer shall serve upon the
12designated employer all of the following:

13(1) The original and one copy of the earnings withholding order.

14(2) The form for the employer’s return.

15(3) The notice to employee of earnings withholding order.

begin insert

16(4) A copy of the form that the judgment debtor may use to make
17a claim of exemption.

end insert
begin insert

18(5) A copy of the form the judgment debtor may use to provide
19a financial statement.

end insert

20(b) At the time the levying officer makes service pursuant to
21subdivision (a), the levying officer shall provide the employer with
22a copy of the employer’s instructions referred to in Section
23706.127. The Judicial Council may adopt rules prescribing the
24circumstances when compliance with this subdivision is not
25required.

26(c) No earnings withholding order shall be served upon the
27employer after the time specified in subdivision (b) of Section
28699.530.

29begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 706.104 of the end insertbegin insertCode of Civil Procedureend insertbegin insert is
30amended to read:end insert

31

706.104.  

Any employer who is served with an earnings
32withholding order shall:

33(a) Deliver to the judgment debtor a copy of the earnings
34withholdingbegin delete order andend deletebegin insert order,end insert the notice to employee of earnings
35begin delete withholdingend deletebegin insert withholding, a copy of the form that the judgment
36debtor may use to make a claim of exemption, and a copy of the
37form the judgment debtor may use to provide a financial statementend insert

38 within 10 days from the date of service. If the judgment debtor is
39no longer employed by the employer and the employer does not
40owe the employee any earnings, the employer is not required to
P11   1make such delivery. The employer is not subject to any civil
2liability for failure to comply with this subdivision. Nothing in
3this subdivision limits the power of a court to hold the employer
4in contempt of court for failure to comply with this subdivision.

5(b) Complete the employer’s return on the form provided by
6the levying officer and mail it by first-class mail, postage prepaid,
7to the levying officer within 15 days from the date of service. If
8the earnings withholding order is ineffective, the employer shall
9state in the employer’s return that the order will not be complied
10with for this reason and shall return the order to the levying officer
11with the employer’s return.

12begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 706.108 of the end insertbegin insertCode of Civil Procedureend insertbegin insert is
13amended to read:end insert

14

706.108.  

(a) If a writ of execution has been issued to the county
15where the judgment debtor’s employer is to be served and the time
16specified in subdivision (b) of Section 699.530 for levy on property
17under the writ has not expired, a judgment creditor may deliver
18an application for issuance of an earnings withholding order to a
19registered process server who may then issue an earnings
20withholding order.

21(b) If the registered process server has issued the earnings
22withholding order, the registered process server, before serving
23the earnings withholding order, shall deposit with the levying
24officer a copy of the writ of execution, the application for issuance
25of an earnings withholding order, and a copy of the earnings
26 withholding order, and shall pay the fee provided by Section 26750
27of the Government Code.

28(c) A registered process server may serve an earnings
29withholding order on an employer whether the earnings
30withholding order was issued by a levying officer or by a registered
31process server, but no earnings withholding order may be served
32after the time specified in subdivision (b) of Section 699.530. In
33performing this function, the registered process server shall serve
34upon the designated employer all of the following:

35(1) The original and one copy of the earnings withholding order.

36(2) The form for the employer’s return.

37(3) The notice to the employee of the earnings withholding
38order.

begin insert

39(4) A copy of the form that the judgment debtor may use to make
40a claim of exemption.

end insert
begin insert

P12   1(5) A copy of the form the judgment debtor may use to provide
2a financial statement.

end insert
begin delete

3 (4)

end delete

4begin insert (6)end insert A copy of the employer’s instructions referred to in Section
5706.127, except as otherwise prescribed in rules adopted by the
6Judicial Council.

7(d) Within five court days after service under this section, all
8of the following shall be filed with the levying officer:

9(1) The writ of execution, if it is not already in the hands of the
10levying officer.

11(2) Proof of service on the employer of the papers listed in
12subdivision (c).

13(3) Instructions in writing, as required by the provisions of
14Section 687.010.

15(e) If the fee provided by Section 26750 of the Government
16Code has been paid, the levying officer shall perform all other
17duties required by this chapter as if the levying officer had served
18the earnings withholding order. If the registered process server
19does not comply with subdivisions (b), where applicable, and (d),
20the service of the earnings withholding order is ineffective and the
21levying officer is not required to perform any duties under the
22order and may terminate the order and may release any withheld
23earnings to the judgment debtor.

24(f) The fee for services of a registered process server under this
25section shall be allowed as a recoverable cost pursuant to Section
261033.5.

27begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 706.122 of the end insertbegin insertCode of Civil Procedureend insertbegin insert is
28amended to read:end insert

29

706.122.  

The “notice to employee of earnings withholding
30order” shall contain a statement that informs the employee in
31simple terms of the nature of a wage garnishment, the right to an
32exemption, the procedure for claiming an exemption, and any other
33information the Judicial Council determines would be useful to
34the employee and appropriate for inclusion in the notice, including
35all of the following:

36(a) The named employer has been ordered to withhold from the
37earnings of the judgment debtor the amounts required to be
38withheld under Section 706.050, or such other amounts as are
39specified in the earnings withholding order, and to pay these
40amounts over to the levying officer for transmittal to the person
P13   1 specified in the order in payment of the judgment described in the
2order.

3(b) The manner of computing the amounts required to be
4withheld pursuant to Section 706.050.

5(c) The judgment debtor may be able to keep more or all of the
6judgment debtor’s earnings if the judgment debtor proves that the
7additional earnings are necessary for the support of the judgment
8debtor or the judgment debtor’s family supported in whole or in
9part by the judgment debtor.

10(d) If the judgment debtor wishes a court hearing to prove that
11amounts should not be withheld from the judgment debtor’s
12earnings because they are necessary for the support of the judgment
13debtor or the judgment debtor’s family supported in whole or in
14part by the judgment debtor, the judgment debtor shall file with
15the levying officer an original and one copy of the “judgment
16debtor’s claim of exemption” and an original and one copy of the
17“judgment debtor’s financial statement.”begin delete The notice shall also
18advise the judgment debtor that the claim of exemption form and
19the financial statement form may be obtained without charge at
20the office of the levying officer.end delete

21begin insert

begin insertSEC. 9.end insert  

end insert
begin insert

The provisions of this act are severable. If any
22provision of this section or its application is held invalid, that
23invalidity shall not affect other provisions or applications that can
24be given effect without the invalid provision or application.

end insert
begin delete
25

SECTION 1.  

Section 1788.2 of the Civil Code is amended to
26read:

27

1788.2.  

(a) Definitions and rules of construction set forth in
28this section are applicable for the purpose of this title.

29(b) The term “debt collection” means any act or practice in
30connection with the collection of consumer debts.

31(c) The term “debt collector” means any person who, in the
32ordinary course of business, regularly, on behalf of himself or
33herself or others, engages in debt collection. The term includes
34any person who composes and sells, or offers to compose and sell,
35forms, letters, and other collection media used or intended to be
36used for debt collection, but does not include an attorney or
37counselor at law.

38(d) The term “debt” means money, property, or their equivalent,
39which is due or owing, or alleged to be due or owing, from a natural
40person to another person.

P14   1(e) The term “consumer credit transaction” means a transaction
2between a natural person and another person in which property,
3services, or money is acquired on credit by that natural person
4from the other person primarily for personal, family, or household
5purposes.

6(f) The terms “consumer debt” and “consumer credit” mean
7money, property, or their equivalent, due or owing, or alleged to
8be due or owing, from a natural person by reason of a consumer
9credit transaction.

10(g) The term “person” means a natural person, partnership,
11corporation, limited liability company, trust, estate, cooperative,
12association, or other similar entity.

13(h) Except as provided in Section 1788.18, the term “debtor”
14means a natural person from whom a debt collector seeks to collect
15a consumer debt that is due and owing, or alleged to be due and
16owing, from that person.

17(i) The term “creditor” means a person who extends consumer
18credit to a debtor.

19(j) (1) The term “consumer credit report” means any written,
20oral, or other communication of any information by a consumer
21reporting agency bearing on a consumer’s creditworthiness, credit
22standing, credit capacity, character, general reputation, personal
23characteristics or mode of living which is used or expected to be
24used or collected in whole or in part for the purpose of serving as
25a factor in establishing the consumer’s eligibility for (1) credit or
26insurance to be used primarily for person, family, or household
27purposes, or (2) employment purposes, or (3) other purposes
28authorized under any applicable federal or state law or regulation.

29(2) The term “consumer credit report” does not include any of
30the following:

31(A) A report containing information solely as to transactions or
32experiences between the consumer and the person making the
33report.

34(B) An authorization or approval of a specific extension of credit
35directly or indirectly by the issuer of a credit card or similar device.

36(C) A report in which a person who has been requested by a
37third party to make a specific extension of credit directly or
38indirectly to a consumer conveys his or her decision with respect
39to that request, if the third party advises the consumer of the name
40and address of the person to whom the request was made and that
P15   1person makes the disclosures to the consumer required under any
2applicable federal or state law or regulation.

3(k) The term “consumer reporting agency” means a person who,
4for monetary fees, dues, or on a cooperative nonprofit basis,
5regularly engages, in whole or in part, in the practice of assembling
6or evaluating consumer credit information or other information on
7consumers for the purpose of furnishing consumer credit reports
8to third parties, and uses any means or facility for the purpose of
9preparing or furnishing consumer credit reports.

end delete


O

    98