2007 -- S 0034

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LC00502

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2007

____________

A N A C T

FINANCIAL INSTITUTIONS - RHODE ISLAND FAIR DEBT COLLECTION PRACTICE

ACT

     Introduced By: Senators Walaska, McCaffrey, Ruggerio, Goodwin, and McBurney

     Date Introduced: January 12, 2007

     Referred To: Senate Corporations

It is enacted by the General Assembly as follows:

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

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hereby amended by adding thereto the following chapter:

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     CHAPTER 14.9

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RHODE ISLAND FAIR DEBT COLLECTION PRACTICES ACT

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     19-14.9-1. Short Title. -- This chapter shall be known and may be cited as the "Rhode

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Island Fair Debt Collection Practices Act".

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     19-14.9-2. Purpose. -- The purpose of this chapter is to establish standards, by defining

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unfair or deceptive acts or practices, for the collection of debts from consumers within the state of

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Rhode Island, and to establish requirements for the licensing and supervision of debt collectors.

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     19-14.9-3. Definitions. -- For the purposes of this chapter, the following terms shall have

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the following meaning unless the context otherwise requires:

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     “Consumer” means any person obligated or allegedly obligated to pay any debt, as

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defined by 15 U.S.C. 1692a.

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     “Consumer Reporting Agency” means any person which, for monetary fees, dues, or on a

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cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or

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evaluating consumer credit information or other information on consumers for the purpose of

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furnishing consumer reports to third parties.

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     “Creditor” means any person who offers or extends credit creating a debt or to whom a

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debt is owed, but the term shall not include a person to the extent that he receives an assignment

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or transfer of a debt in default solely for the purpose of facilitating collection of the debt.

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     “Debt” means any obligation or alleged obligation of a consumer to pay money arising

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out of a transaction in which the money, property, insurance, or services which are the subject of

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the transaction are primarily for personal, family, or household purposes, whether or not the

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obligation has been reduced to judgment.

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     “Debt collector” means any person who uses an instrumentality of interstate commerce or

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the mails in any business the principal purpose of which is the collection of any debts, or who

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regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be

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owed or due another. Notwithstanding the exclusion provided by clause (f) below, debt collector

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shall include a creditor who, in the process of collecting his own debt, uses any name other than

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his own which would indicate that a third person is collecting or attempting to collect the debt.

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Debt collector shall also include a person who uses an instrumentality of interstate commerce or

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the mails in a business the principal purpose of which is the enforcement of security interests.

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Debt collector shall not include:

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     (a) An officer or employee of a creditor while, in the name of the creditor, collecting

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debts for the creditor;

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     (b) A person while acting as a debt collector for another person, both of whom are related

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by common ownership or affiliated by corporate control, if the person acting as a debt collector

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does so only for a person to whom it is so related or affiliated and if the principal business of the

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person is not the collection of a debt;

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     (c) An officer or employee of the United States or a state of the United States to the

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extent that collecting or attempting to collect a debt is in the performance of his official duty;

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     (d) A person while serving or attempting to serve legal process on another person in

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connection with the judicial enforcement of a debt;

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     (e) A nonprofit organization which, at the request of a consumer, performs bona fide

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consumer credit counseling and assists the consumer in the liquidation of debts by receiving

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payments from the consumer and distributing the amounts to creditors;

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     (f) A person collecting or attempting to collect a debt owed or due or asserted to be owed

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or due another to the extent the activity:

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     (1) Is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement, or;

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     (2) Concerns a debt which was originated by the person, or;

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     (3) Concerns a debt which was not in default at the time it was obtained by the person, or;

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     (4) Concerns a debt obtained by the person as a secured party in a commercial credit

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transaction involving the creditor;

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     (g) Attorneys-at-law collecting a debt on behalf of a client.

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     (h) An agent or independent contractor employed for the purpose of collecting a charge

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or bill owed by a tenant to a landlord or owed by a customer to a corporation subject to the

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supervision of the department of business regulation insofar as the person collects charges or bills

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only for the landlord or supervised corporations.

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     “Department” means the department of business regulation.

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     “Director” means the director of the department of business regulation or the director’s

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designee.

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     “Licensee” means an entity licensed under this chapter .

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     “Obligor” means an individual or company that owes the debt created by the issuing of a

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bond required under section 19-14.9-13.

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     19-14.9-4. Acquisition of Location Information. -- Any debt collector communicating

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with any person, other than the consumer, for the purpose of acquiring location information about

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the consumer shall:

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     (a) Identify himself, state that he is confirming or correcting location information

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concerning the consumer, and, only if expressly requested, identify his employer;

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     (b) Not state that such consumer owes any debt;

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     (c) Not communicate with any such person more than once unless requested to do so by

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such person or unless the debt collector reasonably believes that the earlier response of such

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person is erroneous or incomplete and that such person now has correct or complete location

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information;

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     (d) Not communicate by post card;

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     (e) Not use any language or symbol on any envelope or in the contents of any

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communication effected by the mails or telegram that indicates that the debt collector is in the

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debt collection business or that the communication relates to the collection of a debt; and

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     (f) After the debt collector knows the consumer is represented by an attorney with regard

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to the subject debt and has knowledge of, or can readily ascertain, such attorney's name and

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address, not communicate with any person other than that attorney, unless the attorney fails to

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respond within a reasonable period of time to communication from the debt collector.

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     19-14.9-5. Communication in Connection with Debt Collection. -- (1) Without the

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prior consent of the consumer given directly to the debt collector or the express permission of a

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court of competent jurisdiction, a debt collector may not communicate with a consumer in

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connection with the collection of any debt:

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     (a) At any unusual time or place or a time or place known or which should be known to

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be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a

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debt collector shall assume that the convenient time for communicating with a consumer is after 8

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o'clock A.M. and before 9 o'clock PM local time at the consumer's location;

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     (b) If the debt collector knows the consumer is represented by an attorney with respect to

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such debt and has knowledge of, or can readily ascertain, such attorney's name and address,

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unless the attorney fails to respond within a reasonable period of time to a communication from

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the debt collector or unless the attorney consents to direct communication with the consumer; or

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     (c) At the consumer's place of employment if the debt collector knows or has reason to

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know that the consumer’s employer prohibits the consumer from receiving such communication;

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or if the consumer has made a written or oral request that such telephone calls not be made at the

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place of employment, provided, that any oral request shall be valid for only ten (10) days unless

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the consumer provides written confirmation postmarked or delivered within seven (7) days of

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such request. A consumer may at any time terminate such a request by written communication to

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the debt collector;

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     (d) If the debt collector engages any consumer in communication via telephone, initiated

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by the debt collector, in excess of two calls in each seven day (7) period at a consumer's residence

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and two (2) calls in each thirty (30) day period other than at a consumer's residence, for each

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debt, provided that for purposes of this paragraph, a creditor may treat any billing address of the

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consumer as his place of residence;

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     (e) If the debt collector fails to send the consumer the following notice in writing, as set

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forth below, within thirty (30) days after the first communication to a consumer at his place of

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employment regarding any debt, provided that a copy of the notice shall be sent every six (6)

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months thereafter so long as collection activity by the debt collector on the debt continues and the

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consumer has not made a written request as described in paragraph c of this section:

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     NOTICE OF IMPORTANT RIGHTS

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     YOU HAVE THE RIGHT TO MAKE A WRITTEN OR ORAL REQUEST THAT

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TELEPHONE CALLS REGARDING YOUR DEBT NOT BE MADE TO YOU AT YOUR

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PLACE OF EMPLOYMENT. ANY SUCH ORAL REQUEST WILL BE VALID FOR ONLY

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TEN (10) DAYS UNLESS YOU PROVIDE WRITTEN CONFIRMATION OF THE REQUEST

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POSTMARKED OR DELIVERED WITHIN SEVEN (7) DAYS OF SUCH REQUEST. YOU

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MAY TERMINATE THIS REQUEST BY WRITING TO THE DEBT COLLECTOR.

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     (2) Except as provided in section 19-14.9-4, without the prior consent of the consumer

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given directly to the debt collector, or the express permission of a court of competent jurisdiction,

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or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not

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communicate, in connection with the collection of any debt, with any person other than the

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consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor,

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the attorney of the creditor, or the attorney of the debt collector.

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     (3) If a consumer notifies a debt collector in writing that the consumer refuses to pay a

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debt or that the consumer wishes the debt collector to cease further communication with the

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consumer, the debt collector shall not communicate further with the consumer with respect to

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such debt, except:

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     (a) To advise the consumer that the debt collector's further efforts are being terminated;

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     (b) To notify the consumer that the debt collector or creditor may invoke specified

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remedies which are ordinarily invoked by such debt collector or creditor; or

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     (c) Where applicable, to notify the consumer that the debt collector or creditor intends to

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invoke a specified remedy.

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     If such notice from the consumer is made by mail, notification shall be complete upon

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receipt.

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     (4) For the purpose of this section, the term "consumer" shall also include the consumer's

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spouse, parent (if the consumer is a minor), guardian, executor, or administrator.

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     19-14.9-6. Harassment or Abuse.-- A debt collector may not engage in any conduct the

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natural consequence of which is to harass, oppress, or abuse any person in connection with the

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collection of a debt. Such conduct shall include, but not be limited to:

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     (a) Using or threatening to use violence or other criminal means to harm the physical

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person, reputation, or property of any person;

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     (b) Using obscene or profane language or language the natural consequence of which is

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to abuse the hearer or reader;

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     (c) Advertising for sale of any debt to coerce payment of the debt;

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     (d) Causing a telephone to ring or engaging any person in telephone conversation

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repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number;

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     (e) Except as provided in section 19-14.9-4, placing telephone calls without meaningful

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disclosure of the caller's identity;

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     (f) Visiting the household of a consumer at times other than the normal waking hours of

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such consumer, or if normal waking hours are not known, at any time other than between 8:00

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A.M. and 9:00 P.M.; provided, however, that in no event shall such visits, initiated by the debt

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collector, exceed one in any thirty (30) day period for each debt, excluding visits where no

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person is contacted in the household, unless a consumer consents in writing to more frequent

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visits; provided, further, that at all times the creditor must remain outside the household unless

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expressly invited inside by such consumer; and provided further, that visits to the household of a

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consumer which are solely for the purpose of repossessing any collateral or property of the

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creditor (including but not limited to credit cards, drafts, notes or the like), shall not be limited

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under this paragraph;

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     (g) Visiting the place of employment of a consumer, unless requested by the consumer,

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excluding visits which are solely for the purpose of repossessing any collateral or property of the

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creditor, or confrontations with a consumer regarding the collection of a debt initiated by a debt

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collector in a public place excluding courthouses, the debt collector's place of business, other

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places agreed to by a consumer, offices of any attorney for the consumer, or places where the

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conversation between persons representing the debt collector and a consumer cannot be

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reasonably overheard by any other person not authorized by the consumer.

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     19-14.9-7. False or Misleading Representations. -- A debt collector may not use any

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false, deceptive, or misleading representation or means in connection with the collection of any

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debt. Such false or misleading means shall include, but not be limited to:

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     (a) The false representation or implication that the debt collector is vouched for, bonded

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by, or affiliated with the United States or any State, including the use of any badge, uniform, or

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facsimile thereof;

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     (b) The false representation of:

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     (1) The character, amount, or legal status of any debt, or;

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     (2) Any services rendered or compensation which may be lawfully received by any debt

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collector for the collection of a debt;

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     (c) The false representation or implication that any individual is an attorney or that any

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communication is from an attorney;

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     (d) The representation or implication that nonpayment of any debt will result in the arrest

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or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or

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wages of any person unless such action is lawful and the debt collector or creditor intends to take

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such action;

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     (e) The threat to take any action that cannot legally be taken or that is not intended to be

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taken;

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     (f) The false representation or implication that a sale, referral, or other transfer of any

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interest in a debt shall cause the consumer to:

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     (1) Lose any claim or defense to payment of the debt, or;

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     (2) Become subject to any practice prohibited by this chapter;

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     (g) The false representation or implication that the consumer committed any crime or

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other conduct in order to disgrace the consumer;

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     (h) The communicating or threatening to communicate to any person credit information

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which is known or which should be known to be false, including the failure to communicate that a

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disputed debt is disputed;

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     (i) The use of distribution of any written communication which simulates or is falsely

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represented to be a document authorized, issued, or approved by any court, official, or agency of

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the United States or any State, or which creates a false impression as to its source, authorization,

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or approval;

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     (j) The use of any false representation or deceptive means to collect or attempt to collect

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any debt or to obtain information concerning a consumer;

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     (k) The failure to disclose in the initial written communication with the consumer and, in

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addition, if the initial communication with the consumer is oral, in that initial oral

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communication, that the debt collector is attempting to collect a debt and that any information

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obtained will be used for that purpose, and the failure to disclose in subsequent communications

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that the communication is from a debt collector, except that this paragraph shall not apply to a

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formal pleading made in connection with a legal action;

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     (l) The false representation or implication that accounts have been turned over to

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innocent purchasers for value;

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     (m) The false representation or implication that documents are legal process;

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     (n) The use of any business, company, or organization name other than the true name of

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the debt collector's business, company, or organization;

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     (o) The false representation or implication that documents are not legal process forms or

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do not require action by the consumer;

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     (p) Communicating by telephone without disclosure of the name of the debt collector and

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without disclosure of the personal name of the individual making such communication; provided,

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however, that any such individual utilizing an alias shall use only one such alias at all times and

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provided that a mechanism is established by the debt collector to identify the person using such

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alias; the debt collector shall submit a list of all such aliases and the persons using same to the

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director;

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     (q) The false representation or implication that a debt collector operates or is employed

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by a consumer reporting agency.

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     19-14.9-8. Unfair Practices. -- A debt collector may not use unfair or unconscionable

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means to collect or attempt to collect any debt. Such unfair or unconscionable means shall

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include, but not be limited to:

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     (a) Collecting any amount (including any interest, fee, charge, or expense incidental to

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the principal obligation) unless such amount is expressly authorized by the agreement creating the

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debt or permitted by law;

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     (b) Publishing or causing to be published, for general circulation, the name of a consumer

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or any lists of consumers, or threatening to do so;

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     (c) Requesting or demanding from a consumer a postdated check, draft, order for

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withdrawal or other similar instrument in payment for the debt or any portion thereof, or

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negotiating such instrument before the due date of the instrument;

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     (d) Depositing or threatening to deposit any postdated check or other postdated payment

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instrument prior to the date on such check or instrument;

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     (e) Causing charges to be made to any person for communications by concealment of the

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true purpose of the communication. Such charges include, but are not limited to, collect telephone

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calls and fees. However, this section shall not prohibit a debt collector from communicating with

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a consumer by way of a consumer’s wireless telephone;

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     (f) Taking or threatening to take any nonjudicial action to effect dispossession or

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disablement of property if:

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     (1) There is no present right to possession of the property claimed as collateral through an

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enforceable security interest;

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     (2) There is no present intention to take possession of the property, or;

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     (3) The property is exempt by law from such dispossession or disablement;

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     (g) Communicating with a consumer regarding a debt by post card;

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     (h) Using any language or symbol, other than the debt collector's address, on any

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envelope when communicating with a consumer by use of the mails or by telegram, except that a

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debt collector may use his business name if such name does not indicate that he is in the debt

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collection business;

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     (i) Representing that an existing obligation of a consumer may be increased by the

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addition of attorney's fees, investigation fees, service fees, or any other fees or charges, if in fact

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such fees or charges may not legally be added to the existing obligation;

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     (j) Soliciting or obtaining of any written statement or acknowledgment in any form

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containing an affirmation of any obligation by a consumer who has been adjudicated bankrupt,

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without clearly and conspicuously disclosing the nature and consequences of such affirmation;

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     (k) Reporting to a consumer reporting agency on its transactions or experiences with a

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consumer in the debt collector's name. However, a debt collector may, with the express written

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authorization of the creditor, report to a consumer reporting agency in the creditor's name.

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     (l) Engaging in any of the following activities:

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     (1) Furnishing legal advice or otherwise engaging in the practice of law or representing

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that the debt collector is competent to do so, or instituting judicial proceedings on behalf of

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others;

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     (2) Communicating with consumers in the name of a lawyer or upon the stationery of a

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lawyer, or preparing any forms or instruments which only lawyers are authorized to prepare;

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     (3) Exercising authority on behalf of a creditor to employ the services of lawyers, unless

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the creditor has specifically authorized the debt collector in writing to do so and the debt

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collector's course of conduct is at all times consistent with a true relationship of attorney and

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client between the lawyer and the creditor;

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     (4) Demanding or obtaining in any manner a share of the compensation for services

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performed by a lawyer in collection of a claim;

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     (m) Failing to disclose the telephone number and office hours of the debt collector on all

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written communication to the consumer.

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     19-14.9-9. Validation of debts. -- (1)Within five (5) days after the initial communication

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with a consumer in connection with the collection of any debt, a debt collector shall, unless the

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following information is contained in the initial communication, or the consumer has paid the

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debt, send the consumer a written notice containing:

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     (a) The amount of the debt;

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     (b) The name of the creditor to whom the debt is owed;

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     (c) A statement that unless the consumer, within thirty (30) days after receipt of the

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notice, disputes that validity of the debt, or any portion thereof, the debt will be assumed to be

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valid by the debt collector;

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     (d) A statement that if the consumer notifies the debt collector in writing within the thirty

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(30) day period that the debt, or any portion thereof, is disputed, the debt collector will obtain

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verification of the debt or a copy of a judgment against the consumer and a copy of such

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verification or judgment will be mailed to the consumer by the debt collector; and

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     (e) A statement that, upon the consumer's written request within the thirty (30) day

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period, the debt collector will provide the consumer with the name and address of the original

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creditor, if different from the current creditor.

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     (2) If the consumer notifies the debt collector in writing within the thirty (30) day period

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described in paragraph (d) of subsection (1) of this section that the debt, or any portion thereof, is

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disputed, or that the consumer requests the name and address of the original creditor, the debt

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collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector

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obtains verification of the debt or a copy of a judgment, or the name and address of the original

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creditor, and a copy of such verification or judgment, or name and address of the original

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creditor, is mailed to the consumer by the debt collector.

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     (3) A debt collector shall provide to a consumer or any attorney for a consumer within

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five (5) business days of the notification described in subsection (2), the following:

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     (a) All papers or copies of papers, in the possession of the debt collector which bear the

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signature of the consumer and which concern the debt being collected;

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     (b) A ledger, account card, or similar record in the possession of a debt collector, which

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reflects the date and amount of payments, credits, and charges concerning the debt.

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     (4) The failure of a consumer to dispute the validity of a debt under this section shall not

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be construed by any court as an admission of liability by the consumer.

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     19-14.9-10. Multiple debts. -- If any consumer owes multiple debts and makes any

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single payment to any debt collector with respect to such debts, such debt collector may not apply

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such payment to any debt which is disputed by the consumer and, where applicable, shall apply

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such payment in accordance with the consumer's directions.

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     19-14.9-11. Furnishing certain deceptive forms. -- It is unlawful to design, compile,

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and furnish any form knowing that such form would be used to create the false belief in a

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consumer that a person other than the creditor of such consumer is participating in the collection

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of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact

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such person is not so participating.

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     19-14.9-12. License required. -- (1) After July 1, 2008, no person shall engage within

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this state in the business of a debt collector, or engage in soliciting the right to collect or receive

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payment for another of an account, bill or other indebtedness, or advertise for or solicit in print

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the right to collect or receive payment for another of an account, bill or other indebtedness,

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without first obtaining a license from the director or the director’s designee.

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     (2) The application for the license shall be in writing, shall contain information as the

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director may determine and shall be accompanied by an investigation fee of one hundred-fifty

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dollars ($150). The director may deny an application for a license or an application for the

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renewal of a license if he/she is not satisfied that the financial responsibility, character,

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reputation, integrity and general fitness of the applicant and of the owners, partners or members

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thereof, if the applicant be a partnership or association, and of the officers and directors, if the

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applicant be a corporation, are such as to command the confidence of the public and to warrant

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the belief that the business for which the application for a license is filed will be operated

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lawfully, honestly and fairly. The application shall also include a description of the activities of

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the applicant, in such detail and for such periods, as the director may require, as well as further

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information as the director may require in order to effectuate the purposes of this section.

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     (3) The license shall be for a period of three (3) years. Each license shall plainly state the

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name of the licensee and the city or town with the name of the street and number, if any, of the

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place where the business is to be carried on; provided that the business shall at all times be

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conducted in the name of the licensee as it appears on the license. The fee for the license shall be

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three hundred dollars ($300).

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      (4) No person licensed to act within this state as a debt collector shall do so under any

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other name or at any other place of business than that named in the license. The license shall be

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for a single location but may, with the approval of the director, be moved to a different location.

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Not more than one place of business shall be maintained under the same license but the director

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may issue more than one license to the same licensee upon compliance with the provisions of this

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chapter as to each new license. A license shall not be transferable or assignable. Any licensee

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holding, applying for, or seeking renewal of more than one license may, at its option, file the

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bond required under section 19-14.9-13 separately for each place of business licensed, or to be

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licensed, or a single bond, naming each place of business, in an amount equal to fifteen thousand

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dollars ($15,000) for each place of business.

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     (5) This section shall not apply to any bank as defined under section 19-1-1, national

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banking association, federal savings bank, federal savings and loan association, federal credit

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union, or any bank, trust company, savings bank, savings and loan association or credit union

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organized under the laws of any other state of the United States, or any subsidiary of the above;

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but except as provided herein, this section shall apply to a subsidiary or affiliate, as defined by the

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director, of an exempted entity and of a bank holding company established in accordance with

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state or federal law.

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     19-14.9-13. Bond of applicant. -- (1) An applicant for a debt collector license shall file

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with the department a bond approved by the director in which the applicant shall be the obligor in

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the amount of fifteen thousand dollars ($15,000).

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     (2) The bond shall run to the state for the use of the state and of any person who may

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have cause of action against the obligor of the bond under the provisions of this title. The bond

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shall be conditioned upon the obligor faithfully conforming to and abiding by the provisions of

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this chapter and of all rules and regulations lawfully made, and the obligor will pay to the state

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and to any person any and all money that may become due or owing to the state or to the person

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from the obligor under and by virtue of the provisions of this title.

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     (3) The bond shall remain in force and effect until the surety is released from liability by

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the director or the director's designee or until the bond is cancelled by the surety. The surety may

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cancel the bond and be released from further liability under the bond upon receipt by the director

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or the director's designee of written notice of the cancellation of the bond at least thirty (30) days

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in advance of the cancellation of the bond. The cancellation shall not affect any liability incurred

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or accrued under the bond before the termination of the thirty (30) day period. Upon receipt of

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any notice of cancellation, the director shall provide written notice to the licensee.

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     19-14.9-14. Investigatory powers of the director. -- (1) The director may investigate

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the collection records of a licensee, and for that purpose the director shall have free access to the

12-10

books and papers of a licensee relating thereto. A licensee shall keep and use the business records

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in such form and at such location as the director, by regulation, shall determine, which shall

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enable the director to determine whether the licensee is complying with this chapter and rules or

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regulations established hereunder by the director and any other law, rule or regulation applicable

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to the conduct of the business for which it is licensed under this chapter.

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     (2) The director shall preserve a full record of each examination of a licensee including a

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statement of its condition. All records of investigations and reports of examinations by the

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director shall be confidential and privileged communications, shall not be subject to subpoena and

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shall not be made public. For the purposes of this paragraph, records of investigation and reports

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of examinations shall include records of investigation and reports of examinations conducted by a

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financial regulatory agency of the federal government and any other state, and of a foreign

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government which are considered confidential by the agency or foreign government and which

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are in possession of the director. In any proceeding before a court, the court may issue a

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protective order in appropriate circumstances to protect the confidentiality of the records and

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order that the records on file with the court or filed in connection with the court proceeding be

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sealed and that the public be excluded from any portion of the proceeding at which the record is

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disclosed. The director may furnish to regulatory agencies of the federal government, or other

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states, or of foreign countries, and a law enforcement agency, information, reports and statements

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relating to the licensees under his supervision as he considers appropriate.

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     (3) The director, if he has reason to believe that a person other than a licensee has

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violated this act, shall have the power to make an investigation as he or she considers necessary,

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and, to the extent necessary for this purpose, may examine the person and shall have the power to

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compel the production of all relevant books, records, accounts and documents.

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     19-14.9-15. Periodic reporting requirements. -- The director may establish reasonable

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reporting requirements for each licensee as necessary to effectuate the purposes of this chapter.

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     19-14.9-16. Summoning of licensee. -- The director or designee may summon a licensee,

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or any of his/her agents or employees, and other witnesses as he/she considers necessary, and

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may examine them relative to their transactions, may require the production of books and papers

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and, for those purposes, may administer oaths. Whoever, without justifiable cause, fails or refuses

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to appear and testify or to produce books and papers when so required, or obstructs the director in

13-6

the performance of such duties, shall be punished by a fine of not more than five hundred dollars

13-7

($500). Each day a violation occurs or continues shall be considered a separate offense.

13-8

     19-14.9-17. Authority of Director to suspend, revoke or refuse to renew license of a

13-9

Debt Collector. -- (1) The director may suspend, revoke or refuse to renew any license, for any

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reason which would be sufficient grounds to deny an application for a license under this chapter,

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or if the director finds that the licensee or any proprietor, director, officer, member, partner,

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shareholder, trustee, employee or agent of such licensee has done any of the following:

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     (a) Made any material misstatement in the application;

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     (b) Committed any fraud or misrepresentation or misappropriated funds, or;

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     (c) Violated any of the provisions of this chapter or of any regulations adopted pursuant

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thereto, or any other law or regulation applicable to the conduct of its business.

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     (2) A license shall not be revoked or suspended except after notice and a hearing pursuant

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to section 42-35.

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     (3) A licensee may surrender a license by delivering to the director written notice that it

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thereby surrenders the license, but the surrender shall not affect the civil or criminal liability of

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the licensee for acts committed before the surrender.

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     (4) A revocation, suspension, or surrender of any license shall not impair or affect the

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obligation of any pre-existing lawful contract between the licensee and another person.

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     19-14.9-18. Cease and desist order. -- (1) If the director determines, after giving notice

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of and opportunity for a hearing as provided for in section 42-35, that a licensee has engaged in or

13-26

is about to engage in an act or practice constituting a violation of this chapter or a rule, regulation

13-27

or order hereunder, he may order the licensee to cease and desist from the unlawful act or practice

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and take affirmative action as in his/her judgment will effect the purposes of this chapter.

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     (2) If the director makes written findings of fact that the public interest will be irreparably

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harmed by delay in issuing an order under paragraph (1) he/she may issue a temporary cease and

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desist order. Upon the entry of a temporary cease and desist order, the director shall promptly

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notify, in writing, the licensee affected thereby that the order has been so entered, the reasons

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therefore, and that within thirty (30) days after the receipt of a written request from the licensee,

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the matter will be scheduled for hearing pursuant to section 42-35 to determine whether or not the

14-1

temporary order shall become permanent and final. If no hearing is requested and none is ordered

14-2

by the director, the order shall remain in effect until it is modified or vacated by the director. If a

14-3

hearing is requested or ordered, the director, after giving notice of and opportunity for a hearing

14-4

to the licensee subject to the order, by written finding of facts and conclusions of law, shall

14-5

vacate, modify or make permanent the order.

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     (3) No order under this section, except an order issued pursuant to paragraph (2), may be

14-7

entered without prior notice of and opportunity for a hearing pursuant to section 42-35. The

14-8

director may vacate or modify an order under this section upon finding that the conditions which

14-9

required the order have changed and that it is in the public interest to so vacate or modify.

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     19-14.9-19. Department of business regulation - enforcement. -- (1) The director shall

14-11

establish such rules and regulations as necessary to effectuate the purposes of this chapter.

14-12

     (2) The department may enforce this chapter, or restrain any violations thereof, by filing a

14-13

civil action in any court of competent jurisdiction.

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     19-14.9-20. Remedies and penalties. -- (1) Any person who engages in the business of a

14-15

debt collector without a license as required by section 19-14.9-12 of this chapter, shall, upon

14-16

conviction, be fined not more than two thousand dollars ($2,000) or imprisoned not more than

14-17

one year, or both.

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     (2) Any debt collector who fails to comply with the provisions of sections 19-14.9-4

14-19

through 19-14.9-11 of this chapter with respect to a consumer shall be civilly liable to such

14-20

consumer in an amount equal to the sum of:

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     (a) Any actual damages sustained by such consumer as a result of such failure;

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     (b) In the case of any action by an individual, such additional damages as the court may

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allow, but not to exceed one thousand dollars;

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     (c) In the case of a class action:

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     (1) Such amount for each named plaintiff as could be recovered under paragraph (b) of

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this subsection, and;

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     (2) Such amount as the court may allow for all other class members, without regard to a

14-28

minimum individual recovery, not to exceed five hundred thousand dollars or one percent of the

14-29

net worth of the debt collector, whichever is the lesser, and;

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     (d) In the case of any successful action to enforce such liability, the costs of the action,

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together with such reasonable attorney fees as may be determined by the court.

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     (3) In determining the amount of liability in any action under paragraph (2), the court

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shall consider, among other relevant factors:

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     (a) In any individual action under paragraph (b), the frequency and persistence of

15-1

noncompliance by the debt collector or, the nature of such noncompliance, and the extent to

15-2

which such noncompliance was intentional;

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     (b) In any class action under paragraph (c), the frequency and persistence of

15-4

noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt

15-5

collector, the number of persons adversely affected, and the extent to which the debt collector's

15-6

noncompliance was intentional.

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     (4) A debt collector may not be held liable in any action brought pursuant to the

15-8

provisions of this chapter if:

15-9

     (a) The debt collector shows by a preponderance of evidence that the violation was not

15-10

intentional or negligent and which violation resulted from a bona fide error, notwithstanding the

15-11

maintenance of procedures reasonably adapted to avoid any such error or;

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     (b) within 15 days, either after discovering a violation which is able to be cured, or after

15-13

the receipt of a written notice of such violation, the debt collector notifies the consumer of the

15-14

violation, and makes whatever adjustments or corrections are necessary to cure the violation with

15-15

respect to the consumer.

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     (5) An action to enforce any liability created by the provisions of this article may be

15-17

brought in any court of competent jurisdiction within one year from the date on which the

15-18

violation occurs.

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     (6) The policy of this state is not to award double damages under this article and the

15-20

federal "Fair Debt Collection Practices Act" (15 U.S.C. 1692 et seq). No damages under this

15-21

section shall be recovered if damages are recovered for a like provision of said federal act.

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     (7) Notwithstanding paragraph (2), harassment of the employer or the family of a

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consumer shall be considered an invasion of privacy and a civil action may be brought which is

15-24

not subject to the damage limitations of said paragraph.

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     (8) In addition to the remedies and penalties described in this section, any debt collector

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licensed under the provisions of section 19-14.9-12 who violates a provision of this chapter shall

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be subject to the revocation of license as described in section 19-14.9-17.

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     19-14.9-21. Severability. -- If any provision of this chapter or its application to any

15-29

person or circumstance is held invalid by a court of competent jurisdiction, the invalidity does not

15-30

affect other provisions or applications of the chapter that can be given effect without the invalid

15-31

provision or application, and to this end the provisions of the chapter are severable.

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     SECTION 2: This act shall take effect upon passage. 

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LC00502

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

FINANCIAL INSTITUTIONS - RHODE ISLAND FAIR DEBT COLLECTION PRACTICE

ACT

***

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     This act would establish the Rhode Island Fair Debt Collection Practices Act, by defining

16-2

deceptive acts for the collection of debt from consumers within the state. This act would also

16-3

establish requirements for the identity and supervision of debt collectors.

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     This act would take effect upon passage.

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LC00502

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