Al Franken's Act

It's no longer a laughing matter when former Saturday Night Live funny man Al Franken, NOW Senator Al Franken, D - Minnesota, decides to stand up for the little guy against overly aggressive debt collectors. Franken has introduce Senate Bill 3888, "The End Debt Collector Abuse Act of 2010" that is designed to rein in debt collectors' abusive an unethical debt collectors. It would be the first major update to the Fair Debt Collection Practices Act (FDCPA) of 1977.

Franken, is quoted as saying, "We believe people should pay their debt, especially if they have the means to do so. That's not what this is about; this is about companies that target and harass consumers without just cause."

While the Federal Fair Debt Collection Practices Act currently requires debt collectors to send consumers verification of a debt upon request, except for the name of the creditor and the amount owed, the exact information that must be provided is not addressed. Franken’s Bill 3888 would require that validation notices include:

* The date the last payment was made to the creditor, and the balance when the account went into default;
* The name and address of the last person to extend credit to the consumer with respect to that debt;
* And itemization of principal, interest, and fees that make up the debt as well as any other charges added after the last payment was made to the creditor;
* A description of the consumer’s rights, including the right to ask the collector to cease contact, as well as the name and address of a person with a collection agency who handles billing errors and disputes.

Franken said in too many cases debt collection agencies, who buy lists of uncollectible accounts from banks and credit card companies, pursue consumers with outdated information or go after the wrong person altogether. The above changes alone, would go a long way in helping consumers identify when they are being wrongfully targeted.

Franken's End Debt Collector Abuse Act would also prohibit debt collectors from seeking arrest warrants to collect debts, which some debt collectors seek from courts where the debt collector has sued and obtained a judgment against the consumer.

Franken’s Act would also require the collection agencies to investigate and verify the debt before attempting to collect it. They would also be required to tell the court what the original loan amount was, and how much of the remaining debt is principal versus interest and penalties. It would also stiffen penalties against debt collectors who use illegal methods to collect money.

Franken’s proposed legislation comes on he heels of a report issued earlier in 2010, where the Federal Trade Commission called the U.S. debt collection process, "a broken system" which no longer affords customers protections.