VERMONT ENACTS PROHIBITION AGAINST CONTACTING REPRESENTED CARD HOLDERS
Vermont has enacted legislation prohibiting a credit card company or its creditor or collection agency from contacting a card holder regarding a debt, late fee or other charge if (i) it has been informed that the card holder is disputing the debt, late fee or other charge, (ii) the card holder is represented by legal counsel and (iii) the card holder has provided the credit card company or its creditor or collection agency with the name, address and telephone number of the legal counsel. Violations are punishable by a fine not more than $10,000. The prohibition takes effect July 1, 2009.2009 Vt. S.B. 26.
Creditors and collectors have long been concerned with the “parking” of debts with consumer’s counsel. While the federal Fair Debt Collection Practices Act similarly prohibits contact with consumers known to be represented, the FDCPA does allow a collector to contact a consumer if consumer’s counsel does not respond within a “reasonable” time. Problematic as that indeterminate standard is, it provides some potential for relief from stalemate. The Vermont statute, which was tucked away in a bill otherwise directed to amending criminal statutes, creates significant risk for creditors and collectors alike insofar as the statute allows for the attribution of knowledge to unrelated parties. Creditors and collectors alike will need to review current practices to account for this new limitation on contacts with consumers.
- Mike Tomkies and Chuck Gall
DEALING WITH MULTISTATE DEBT COLLECTION COMPLIANCE? We routinely advise on collection-related activities and the regulated activities of creditors, third party debt collectors, debt buyers and loan servicers. We also publish an easy-to-use reference that compiles state and federal laws governing debt collection practices. The Debt Collection Digest is organized topically, includes the federal Fair Debt Collection Practices Act and Commentary for easy cross-reference, and covers ADAD and monitoring and recording statutes. Contact us for details.