GALLAGHER, LAWMAKERS ASK FOR GREATER AUTHORITY TO CURB ABUSIVE PRACTICES USED BY DEBT COLLECTORS

Harassing phone calls at all hours, abusive language and threats of incarceration and physical harm are the impetus for Chief Financial Officer Tom Gallagher joining state lawmakers, including Senate President Jim King, to promote legislation giving regulators the authority to stop such practices used increasingly by debt collection agencies.  Senator Victor Crist and Representative Gus Bilirakis are sponsoring the legislation (SB 2430/HB 1371).  HB 1371 was passed unanimously today by the House Subcommittee on Banking and Securities.

“Under this new legislation, collection agencies using abusive tactics to collect consumer debt will no longer be tolerated,” said Chief Financial Officer Tom Gallagher, who serves as agency head for the Department of Financial Services (DFS).  “Consumers who contact the department for assistance should not be turned away because there is a lack of enforcement authority to protect them.”

DFS has received hundreds of calls over the last year from Floridians reporting harassing, threatening and frequent phone calls and other correspondence from debt collection agencies.  Current law does not provide regulators with the tools needed to oversee collection agency practices.

CFO Gallagher, Sen. Crist and Rep. Gus Bilirakis at the press conference.

“Many Floridians turn to credit cards or loans during tight times,” said Senator Victor Crist, whose version of the bill was recently passed unanimously by the Senate Banking and Insurance Committee.  “But if they get into financial trouble, they deserve ethical treatment by debt collectors.  No one should be afraid to answer the telephone.”

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“The majority of debt collectors do not engage in abusive tactics,” said Rep. Gus Bilirakis.  “But those who do should not be tolerated.  Floridians deserve more protections against collection agencies who prey upon individuals and families experiencing hard financial times.”

The legislation would allow the department’s Office of Financial Regulation (OFR) to:

• Investigate a consumer complaint

• Issue and serve subpoenas to enforce compliance

• Issue cease and desist orders and refund orders   

• Impose fines of up to $1,000 per violation   

• Make telephone inquiries and in-person visits to collection agencies   

• Enforce registration requirements of consumer collection agencies   

• Set rules, as necessary, for the regulation of this industry.

“Lawmakers’ approval of this bill will help state regulators prevent the abuses we are seeing in the consumer collection industry,” said Don Saxon, Director of OFR.

A consumer from Edgewater, Florida, complained to DFS that a debt collector had posed as a state investigator and threatened to have the local sheriff’s office escort her to jail.  Another said a collector promised to arrest her son, who lives in another state, unless she wired a cash payment immediately.  Hundreds of other Floridians have been verbally abused and threatened, including a family whose young daughter was told her mother would be sent to jail unless they paid their bill.

The legislation would allow OFR to inspect collection agency records and enlist the help of other law enforcement agencies if evidence of fraud is detected.  The legislation would also provide that a violation of the Federal Fair Debt Collection Practices Act would also constitute a violation of Florida’s Deceptive and Unfair Trade Practices Act, granting prosecution authority to the Office of the Attorney General.

Consumers who have experienced abusive collection tactics from a collection agency should contact the Department of Financial Services toll free at 1-800-342-2762.