DC makes moves to combat ‘aggressive debt collection’ after COVID protections expire

D.C. Council Chairman Phil Mendelson and Attorney General Karl Racine are putting forward legislation to protect District consumers against “unfair and abusive debt collection practices.”

Mendelson introduced the bill Monday, which was written in collaboration with the Office of the Attorney General. According to a release, the legislation would “modernize the District’s outdated debt collection law, which was written in 1971 and does not currently cover most types of consumer debt, including medical debt and credit card debt.”

A key focus is to make sure consumer protections are in place when D.C.’s COVID-19 public health emergency legislation expires.

D.C. will not be renewing its pandemic emergency, it was confirmed Monday.

“When the District’s COVID-19 protections expire, residents who are struggling to get back on their feet will face a wave of aggressive debt collection activity — and we know this activity will disproportionately affect residents of color,” Racine said in a release.

“Our current debt collection law was passed 50 years ago and must be updated to address modern forms of communication and combat abusive debt collection practices. My team worked closely with Chairman Mendelson and community advocates to develop this legislation, which would bring protections for DC residents into the 21st century. I encourage the Council to act quickly to ensure that we have the tools we need protect consumers and pursue debt collectors who take advantage of District residents.”

Chairman Mendelson added: “As the public health emergency nears its end, the debt collection protections put in place will expire. Meanwhile, we’ve realized that our 50 year old consumer protection law hasn’t kept pace with technology. We must do all we can to protect our most vulnerable residents from harassment. Now is the time to strengthen consumer protections and the tools available to pursue debt collectors who take advantage of consumers.”

According to the release, the legislation would update D.C.’s debt collection laws by:

  • Expanding protections to cover medical debt and credit card debt: Medical debt and credit card debt are among the most common forms of debt held by consumers, but collection on these debts is unregulated by existing D.C. law. This legislation would outlaw abusive collection practices for all forms of consumer debt, including medical debt and credit card debt.
  • Prohibiting harassment by debt collectors: The proposed legislation would prohibit excessive communications that constitute harassment, including making more than three phone calls in a seven-day period. The law would be broadened to clearly apply to modern forms of communication, like text message and email. This legislation would protect consumers from harassment across all forms of communication.
  • Strengthening existing protections for D.C. consumers: Under the District’s current laws, collectors of a few types of debts may not call consumers very early in the morning or late at night, call anonymously, use profane or threatening language or make false statements about a person’s debt to employers or family members. In addition to expanding the types of debts covered by these protections, under this legislation, debt collectors would not be allowed to communicate any information about a person’s debt to their employers or family members.
  • Stopping criminalization of poverty: Creditors are increasingly using the legal system as a tool to collect debts, and under current law, if the consumer fails to appear for a proceeding, the creditor can request that a bench warrant be issued for the consumer’s arrest. This bill would eliminate the ability of creditors to have consumers jailed for contempt of court in these circumstances. It would also clarify that no person can be jailed for failing to pay a debt.
  • Clarifying that the law applies to debt buyers: The bill would clarify that debt buyers must follow all laws applicable to debt collectors. It would require debt buyers to comply with additional requirements, such as providing itemized statements and account numbers for debts owed, to prevent attempts to collect on inaccurate or expired debts.
  • Increasing penalties for debt collectors who violate the law: This legislation would establish clear financial penalties for wrongdoers, including extra penalties of up to $4,000 per harmed individual.

The emergency legislation is available online.

The temporary legislation is available online.

How to Report Unfair Business Practices

To report scams, fraud or unfair business practices, contact OAG’s Office of Consumer Protection by:

Will Vitka

William Vitka is a Digital Editor and reporter for WTOP.com. He's been in the news industry for over a decade. Before joining WTOP, he worked for CBS News, Stuff Magazine, The New York Post and wrote a variety of books—about a dozen of them, with more to come.

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