Congress Oks Three Industry-Supported Changes to FDCPA

The collection industry scored a major victory in Washington last week as Congress passed three industry-backed amendments to the Fair Debt Collection Practices Act.

One of the approved measures specifies that a legal pleading is no longer consider initial communications for collection purposes so such pleadings no longer have to contain a warning to consumers that they are not attempts to collect debt.

That warning, known in the collection business as the mini-Miranda, also no longer needs to be included with forms required by other laws, such as for 1099Cs which are required by the Internal Revenue Service to be sent after forgiveness of a debt.

The last approved measure allows collection activity to continue during a 30-day validation period if there is no debtor dispute.

While ACA International, the collection industry’s major trade association, has worked for years to push these amendments, the association was publicly opposed to another amendment which also passed that exempts check diversion companies from having to adhere to the FDCPA.

Check diversion companies are private companies that work with state or district attorneys to target consumers who have passed a bad check. Under the new law, they will no longer be considered debt collectors.

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