On May 7, 2013, Washington Governor Jay Inslee signed into law Substitute House Bill 1822, Chapter 148, Laws of 2013, concerning debt collection practices in Washington. The law imposes new obligations on “debt buyers” by requiring those individuals or entities to become licensed collection agencies with the Department of Licensing and comply with all of the provisions of the Washington Collection Agency Act, RCW 19.16. The Act defines a debt buyer as “any person or entity that is engaged in the business of purchasing delinquent or charged off claims for collection purposes, whether it collects the claim itself or hires a third party for collection or an attorney for litigation in order to collect such claims.”
Prior to this recent change in the law, it was widely accepted that the Washington Collection Agency Act did not apply to debt buyers that collected on their own debts in Washington.
In addition to requiring debt buyers to be licensed collection agencies, the new law requires debt buyers to comply with all of the provisions of the Act. A violation of the licensing requirement subjects the violator to a fine not to exceed $500, imprisonment of up to one year, or both, and monies collected or received by the violator must be returned to the debtor. Moreover, if a debt buyer violates the Act, the violator is prohibited from ever recovering any interest, service charges, attorneys’ fees, or other costs or charges related to the obligation, and only the original amount of the debt may thereafter be collected.
For more information on the new obligations of debt buyers in Washington, please one of contact Eisenhower’s Banking and Finance Attorneys here.
