2018 -- H 7929

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LC004805

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO FINANCIAL INSTITUTIONS - EXPIRED DEBT ACT

     Introduced By: Representatives Morin, Phillips, Shanley, Messier, and Tobon

     Date Introduced: March 07, 2018

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 19 of the General Laws entitled "FINANCIAL INSTITUTIONS" is

hereby amended by adding thereto the following chapter:

CHAPTER 14.12

EXPIRED DEBT ACT

     19-14.12-1. Short title.

     This chapter shall be known and may be cited as the "Expired Debt Act".

     19-14.12-2. Definitions.

     For the purposes of this chapter, the following terms shall have the following meanings

unless the context otherwise requires:

     (1) "Collector" means a person collecting or attempting to collect an alleged debt arising

out of a consumer transaction.

     (2) "Consumer transaction" means any transaction involving a person seeking or

acquiring real or personal property, services, money, or credit for personal, family, or household

purposes.

     (3) "Person" means an individual, corporation, business trust, statutory trust, estate, trust,

partnership, association, two (2) or more persons having a joint or common interest, or any other

legal or commercial entity.

     19-14.12-3. Prohibited practices.

     (a) In addition to all prohibitions contained in chapter 14.9 of title 19, in collecting or

attempting to collect an alleged debt a collector may not:

     (1) Use or threaten force or violence;

     (2) Threaten criminal prosecution, unless the transaction involved the violation of a

criminal statute;

     (3) Disclose or threaten to disclose information which affects the debtor's reputation for

credit worthiness with knowledge that the information is false;

     (4) Except as permitted by statute, contact a person's employer with respect to a

delinquent indebtedness before obtaining final judgment against the debtor;

     (5) Except as permitted by statute, disclose or threaten to disclose to a person other than

the debtor or their spouse or, if the debtor is a minor, their parent, information which affects the

debtor's reputation, whether or not for credit worthiness, with knowledge that the other person

does not have a legitimate business need for the information;

     (6) Communicate with the debtor or a person related to them with the frequency, at

unusual hours, or in any other manner as reasonably can be expected to abuse or harass the

debtor;

     (7) Use obscene or grossly abusive language in communicating with the debtor or a

person related to them:

     (8) Claim, attempt, or threaten to enforce a right with knowledge that the right does not

exist; or

     (9) Use a communication which simulates legal or judicial process or gives the

appearance of being authorized, issued, or approved by a government, governmental agency, or

lawyer when it is not.

     (b) A collector may not initiate contact with a debtor, or a person related to the debtor,

unless the collector possesses verifiable information documenting:

     (1) Ownership of the debt, including a copy of the signed contract of the original debt, the

final account statement of the debt, and written documentation that the collector has the right to

collect on the debt;

     (2) The amount of the debt; and

     (3) The connection of the debtor, or the person related to the debtor, to the debt.

     (c) In collecting or attempting to collect a debt for which the statute of limitations has

expired, a collector shall inform a debtor, in each communication, that:

     (1) The statute of limitations for collection of the debt has expired;

     (2) The debtor may assert the expiration of the statute of limitations as a defense in a civil

action involving collection of the debt; and

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     (3) Entering into an agreement with the collector or making a payment may:

     (i) Revive the debt; and

     (ii) Prevent the debtor from asserting the expiration of the statute of limitations as a

defense in a civil action involving collection of the debt.

     19-14.12-4. Remedies and penalties.

     A collector who fails to comply with the provisions of this chapter shall be subject to all

penalties provided in § 19-14.9-13 including, but not limited to, damages for emotional distress or

mental anguish suffered with or without accompanying physical injury.

     19-14.12-5. Judicial action prohibited.

     No court may enter a judgment by default against a debtor in a civil action involving

collection of a debt if the period in which a civil action regarding the underlying debt must

commence has expired.

     19-14.12-6. Severability.

     If any provision of this chapter or its application to any person or circumstance is held

invalid by a court of competent jurisdiction, the invalidity does not affect the other provisions or

applications of the chapter that can be given effect without the invalid provision or application,

and to this end the provisions of this chapter are severable.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO FINANCIAL INSTITUTIONS - EXPIRED DEBT ACT

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     This act would create the "Expired Debt Act" which would prohibit certain practices

relative to the collection of debts, and set forth certain requirements when the debt is beyond the

statute of limitations for filing a legal action for collection.

     This act would take effect upon passage.

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