California Debt Collectors Bond

The California Legislature passed CA S 908 that will require the licensure of debt collectors in the State of California. The California Debt Collectors Bond will be a requirement to obtain the license and the minimum amount of the surety bond will be set at $25,000. The law is to go into effect January 1, 2021, however licenses will not be require to be in place until January 1, 2022. The new law authorizes the Department of Financial Protection and Innovation (DFPI) to take borrowers’ complaints and enforce violations. It will give consumers a single location to check whether companies are licensed, and whether they have been subject to any enforcement actions, including license suspensions or revocations.

While no California Debt Collectors Bond form is available yet to determine exactly what the bond will cover, current statute states:

No debt collector shall collect or attempt to collect a consumer debt by means of the following practices:

(a) Using obscene or profane language.

(b) Placing a telephone call without disclosing the caller’s identity, provided that an employee of a licensed collection agency may identify oneself by using their registered alias name if they correctly identify the agency that they represent. A debt collector shall provide its California debt collector license number upon the consumer’s request.

(c) Causing expense to any person for long distance telephone calls, telegram fees, or charges for other similar communications, by misrepresenting to the person the purpose of the telephone call, telegram or similar communication.

(d) Causing a telephone to ring repeatedly or continuously to annoy the person called.

(e) Communicating, by telephone or in person, with the debtor with such frequency as to be unreasonable, and to constitute harassment of the debtor under the circumstances.

(f) Sending written or digital communication to the person that does not display the California license number of the collector in at least 12-point type.