SCAM Debt Act
Bill: H.R.1671 | Sponsor: Rep. Bonamici, Suzanne (D-OR)
Policy area: Finance and Financial Sector

Summary:
Securing Consumers Against Misrepresented Debt Act of 2021 or the SCAM Debt Act
This bill provides additional requirements for debt collectors when taking legal action to collect a debt. Among other requirements, debt collectors must provide advance notice to the consumer of the intent to take legal action, and provide in the initial pleading certain evidence regarding the debt and a sworn affidavit stating that the statute of limitations has not expired.
The bill also sets forth additional information a debt collector must provide to a consumer regarding the debt.

To amend the Fair Debt Collection Practices Act to safeguard access to 
information for consumers and to stop abusive debt litigation, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Securing Consumers Against 
Misrepresented Debt Act of 2021'' or the ``SCAM Debt Act''.

SEC. 2. DEFINITIONS.

    Section 803 of the Fair Debt Collection Practices Act (15 U.S.C. 
1692a) is amended by adding at the end the following:
            ``(9) The term `legal action' means any lawsuit or legal 
        proceeding (including litigation, arbitration, enforcement of 
        security interests, post-judgment actions, and mediation) 
        pursued, taken, threatened, offered, or requested by debt 
        collectors.''.

SEC. 3. FALSE OR MISLEADING REPRESENTATIONS.

    Section 807(11) of the Fair Debt Collection Practices Act (15 
U.S.C. 1692e(11)) is amended by striking ``legal action'' and inserting 
``lawsuit''.

SEC. 4. VALIDATION OF DEBTS.

    Section 809(a) of the Fair Debt Collection Practices Act (15 U.S.C. 
1692g(a)) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``the following information is contained in the initial 
        communication or'';
            (2) by amending paragraph (1) to read as follows:
            ``(1) an itemization of the amount of the debt that 
        includes--
                    ``(A) the total amount of the debt owed on the date 
                of the notice;
                    ``(B) the most recent date of default on the debt; 
                and
                    ``(C) the amount owed on the most recent date of 
                default, the amount of any payments made since such 
                date, and the amount of any interest or fees accrued on 
                the debt since such date;'';
            (3) by amending paragraph (2) to read as follows:
            ``(2) the name of the original creditor and, if different, 
        the name of the creditor on the most recent date of default and 
        the name of the current creditor to whom the debt is owed;''.
            (4) in paragraph (4)--
                    (A) by striking ``in writing''; and
                    (B) by striking ``and'' at the end;
            (5) in paragraph (5)--
                    (A) by striking ``written''; and
                    (B) by striking the period at the end and inserting 
                a semicolon; and
            (6) by adding at the end the following:
            ``(6) the account number of the debt on the most recent 
        date of default; and
            ``(7) all methods that the consumer can use to contact the 
        debt collector.''.

SEC. 5. LEGAL ACTIONS BY DEBT COLLECTORS.

    Section 811 of the Fair Debt Collections Practices Act (15 U.S.C. 
1692i) is amended--
            (1) by redesignating subsection (b) as subsection (c); and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Requirements for Debt Collectors.--A debt collector that 
takes legal action to collect or attempt to collect a debt shall comply 
with the following requirements:
            ``(1) Provide the consumer written notice of the intent to 
        take legal action, sent to the consumer's last known address at 
        least 30 days and not later than 60 days in advance of 
        commencing the legal action, that shall include--
                    ``(A) all methods that the consumer can use to 
                contact the debt collector; and
                    ``(B) all information contained in the notice 
                required under section 809(a) (excluding the 
                information described in paragraphs (3), (4), and (5) 
                of such section), updated to ensure correctness.
            ``(2) In the initial pleading filed by a debt collector to 
        commence a legal action to collect a debt, include--
                    ``(A) all information contained in the notice 
                required under section 809(a) (excluding the 
                information described in paragraphs (3), (4), and (5) 
                of such section), except any account numbers and any 
                personally identifiable information, updated to ensure 
                correctness;
                    ``(B) the last four digits of the account number of 
                the original debt;
                    ``(C) admissible documentary evidence of--
                            ``(i) the written agreement, contract, or 
                        instrument creating the debt, if any, or other 
                        documents showing that the consumer agreed to 
                        the agreement, contract, or instrument creating 
                        the debt;
                            ``(ii) any terms and conditions relevant to 
                        the debt;
                            ``(iii) that the consumer incurred the debt 
                        and the amount owed; and
                            ``(iv) that there is a chain of title of 
                        the ownership of debt and the right to collect 
                        the debt, including documents showing the date 
                        of each transfer of ownership of the debt and 
                        the identity of each owner of the debt; and
                    ``(D) a sworn affidavit stating--
                            ``(i) that the applicable statute of 
                        limitations for collecting the debt has not 
                        expired and the date on which such statute of 
                        limitations expires; and
                            ``(ii) that the debt collector personally 
                        reviewed all applicable records and documents 
                        relating to the debt to be collected.''.
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