CREDITOR ALERT! October 14, 2003 PROBLEM CORRECTED On October 13, 2003, a bill was signed by the Governor of the State of Texas eliminating the “mini-Miranda” requirement previously imposed on creditors such as Trinity Solutions. It also imposes a new general prohibition on using any other false representation or deceptive means to collect a debt or obtain information concerning a consumer. That general prohibition applies to creditors as well as third-party collectors. The amendment takes effect on the 91st day after the last day of the legislative session. The full test of the bill is set forth below. AN ACT Relating to the reorganization of, efficiency in, and other reform measures applying to governmental entities and certain regulatory practices; providing a penalty. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS ***** ARTICLE 28. DEBT COLLECTION PRACTICES SECTION 28.01. Section 392.304(a), Finance Code, as amended by Chapter 851, Acts of the 78th Legislature, Regular Session, 2003, is amended to read as follows: (a) Except as otherwise provided by this section, in debt collection or obtaining information concerning a consumer, a debt collector may not use a fraudulent, deceptive, or misleading representation that employs the following practices: (1) using a name other than the: (A) true business or professional name or the true personal or legal name of the debt collector while engaged in debt collection; or (B) name appearing on the face of the credit card while engaged in the collection of a credit card debt;
(2) failing to maintain a list of all business or professional names known to be used or formerly used by persons collecting consumer debts or attempting to collect consumer debts for the debt collector; (3) representing falsely that the debt collector has information or something of value for the consumer in order to solicit or discover information about the consumer; (4) failing to disclose clearly in any communication with the debtor the name of the person to whom the debt has been assigned or is owed when making a demand for money; (5) in the case of a third-party debt collector, failing to disclose, except in a formal pleading made in connection with a legal action: (A) that the communication[debt collector] is an attempt [attempting] to collect a debt and that any information obtained will be used for that purpose, if the communication is the initial written or oral communication between the third-party debt collector and[with] the debtor; or (B) that the communication is from a debt collector, if the communication is a subsequent written or oral communication between the third-party debt collector and[with] the debtor;
(6) using a written communication that fails to indicate clearly the name of the debt collector and the debt collector’s street address or post office box and telephone number if the written notice refers to a delinquent consumer debt; (7) using a written communication that demands a response to a place other than the debt collector’s or creditor’s street address or post office box; (8) misrepresenting the character, extent, or amount of a consumer debt, or misrepresenting the consumer debt’s status in a judicial or governmental proceeding; (9) representing falsely that a debt collector is vouched for, bonded by, or affiliated with, or is an instrumentality, agent, or official of, this state of an agency of federal, state, or local government; (10) using, distributing, or selling a written communication that simulates or is represented falsely to be a document authorized, issued, or approved by a court, an official, a governmental agency, or any other governmental authority or that creates a false impression about the communication’s source, authorization, or approval; (11) using a seal, insignia, or design that simulates that of a governmental agency; (12) representing that a consumer debt may be increased by the addition of attorney’s fees, investigation fees, service fees, or other charges if a written contract or statute does not authorize the additional fees or charges; (13) representing that a consumer debt will definitely be increased by the addition of attorney’s fees, investigation fees, service fees, or other charges if the award of the fees or charges is subject to judicial discretion; (14) representing falsely the status or nature of the services rendered by the debt collector or the debt collector’s business; (15) using a written communication that violates the United States postal laws and regulations; (16) using a communication that purports to be from an attorney or law firm if it is not; (17) representing that a consumer debt is being collected by an attorney if it is not; [or] (18) representing that a consumer debt is being collected by an independent, bona fide organization engaged in the business of collecting past due accounts when the debt is being collected by a subterfuge organization under the control and direction of the person who is owed the debt; or (19) using any other false representation or deceptive means to collect a debt or obtain information concerninga consumer.
ARTICLE 34. EFFECTIVE DATE SECTION 34.01 Except as otherwise provided by this Act, this Act takes effect on the 91st day after the last day of the legislative session. ______________________ _______________________
President of the Senate Speaker of the House I certify that H.B. No. 7 was passed by the House on September 17, 2003, by a non-record vote; that the House refused to concur in Senate amendments to H.B. No. 7 on September 29, 2003, and requested the appointment of a conference committee to consider the differences between the two houses; and that the House adopted the conference committee report on H.B. No. 7 on October 12, 2003, by the following vote: Yeas 79, Nays 35, 1 present, not voting. _______________________
Chief Clerk of the House I certify that H.B. No. 7 was passed by the Senate, with amendments, on September 25, 2003, by the following vote: Yeas 21, Nays 8; at the request of the House, the Senate appointed a conference committee to consider the differences between the two houses; and that the Senate adopted the conference committee report on H.B. No. 7 on October 10, 2003, by the following vote: Yeas 21, Nays 10. _______________________
Secretary of the Senate APPROVED: _______________
Date ________________
Governor
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