Statements on Introduced Bills and Joint Resolutions

Floor Speech

Mr. FRANKEN. Mr. President, we have big problems in the debt collection industry that are long overdue in being addressed. Before I even begin, I wish to preface my remarks by saying when someone takes out a loan, they ought to pay it back. I have no intention of making it easier for people to skip out on legitimate debts. But we also cannot sit idly by as debt collectors prey on good people who have always tried to do the right thing.

In 1977, by my calculations 33 years ago, Congress passed the Fair Debt Collection Practices Act to protect consumers from abusive practices by debt collectors. But times have changed and that law needs updating.

Congress did not foresee the abuses that would arise as the growing debt collection industry found ways around the intent of the law to make a profit on the backs of hard-working Americans. All around our country, there are numerous stories of people being taken advantage of by unscrupulous debt collectors. The debt collectors do not let the law or common decency stop them from doing whatever it takes for them to make a buck.

Those abuses include nasty and harassing calls, including the use of racial slurs and going after innocent people for debts they do not owe. In my State alone, and you can find similar stories from all over the country, consumers have been subjected to endless collection attempts over debts they do not recognize or debts they do not believe ever existed, debts that have already been paid, debts owed by different people, and debts that have been dramatically inflated.

Just this week, I met a man from Minnesota who was repeatedly harassed by debt collectors for a debt he did not owe. And in spite of the evidence he provided, it did not stop until he got a lawyer. Debt collectors have time and money on their side, and now some are even exploiting scarce law enforcement resources to go after unsuspecting Minnesotans. Debt collection firms are preying on people with good intentions. But without the time and money to figure out their rights and to fight back, this is basically a David and Goliath situation, but here, usually Goliath is the one that wins.

For some people, this bad situation spirals into an even worse nightmare. The problems in the debt collection industry first came to my attention in June, when my hometown newspaper, the Star Tribune, began a series on the subject about the story about the Minnesotans who have landed in jail because debt collectors were pursuing them for a debt.

One woman who told her story, a Minneapolis resident, spent a full day in jail over a $250 credit card debt. During that day she was treated like a criminal, groped by an inmate, and offered drugs by another, and slept in a room with a dozen other women, sharing a toilet with no privacy.

Here is what she told the newspaper.

We hear every day about how there is no money for public services. But it seems like the collectors have found a way to get the police to do their work.

She is right. These rogue debt collectors are gaming the system and using law enforcement resources for the sole purpose of corporate profit. Then there is the story of a woman from Richfield, MN, a suburb south of Minneapolis, who was arrested one day recently because she had defaulted on a credit card in 2006. A debt-buying company had bought up her old credit card debt and started sending collection notices. But she ignored them because she had never heard of that company. The next thing you know, she was stopped on the road and arrested.

This harassment and abuse needs to be stopped. That is why Senator LeMieux and I are introducing the End Debt Collector Abuse Act, which would forbid debt collectors from seeking the arrest of a consumer in pursuit of payment. The court can initiate it, just not the debt collector.

It would also require the debt collectors to provide consumers with, get this, basic information upfront such as an itemization of principle, fees, and interest that make up the debt, so that consumers can recognize a debt, determine whether the collectors' claim is accurate, and exercise their rights.

This bill will also require the debt collectors provide the name of the original creditor upfront so we can avoid cases such as that women from Richfield, who received collection notices from a company she had never heard of and, quite reasonably, ignored them. It is just common sense to make sure that debt collectors provide this sort of basic information upfront so these misunderstandings do not happen.

In the case a consumer does identify an inaccuracy with a debt claim, some debt collectors currently do little or nothing in terms of investigating whether the consumer's dispute is correct. For that reason, this bill would require the collectors conduct a thorough investigation when a consumer contacts them about a mistake. The collector would then have to provide the consumer with specific evidence about the dispute.

Finally, the End Debt Collector Abuse Act would increase the penalties for violating consumer rights in order to crack down on the rogue debt collectors who have been blatantly and willfully ignoring current Federal prohibitions against harassing calls and other abusive practices.

In this tough economy, Minnesotans are suffering enough right now and they deserve to have the basic protections against abusive debt collective practices. I urge my colleagues to join Senator LeMieux and me in supporting this bill so we can stop the abuse and harassment of hard-working Americans by rogue debt collection firms.

Mr. President, I ask unanimous consent that the text of the bill and a list of supports be printed in the Record.

There being no objection, the material was ordered to be printed in the RECORD,

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