Collector - July 2020 - 44

Evidence of Purchase
Recent amendments address how Washington state's licensing and debt collection
regulations apply to debt buyers, including requirements for legal actions.

W

ashington state's legislature has
been active in the collections
arena in recent years, and 2020 is
proving to be no exception. On March 18,
the state enacted Substitute House Bill 2476
(public law 2476-S.SL), "[a]n act relating to
debt buyers." The act amended provisions
of Chapter 19.16 of the Revised Code of
Washington (RCW), which pertains to
"Collection Agencies."
The amendments expressly address how
the state's licensing and debt collection
regulations apply to "debt buyers," now
defined by statute. Although the state's
previous definition of "collection agency"
already included both passive and active
debt buyers, the new definition expressly
includes "debt buyers" and defines the
term, then applies new prerequisites and
evidentiary requirements to legal actions
by debt buyers who fall under RCW Ch.
19.16's regulatory regime.
As amended, RCW 19.16.100 now
includes in the definition of "collection
agency ... [a] debt buyer as defined in
this section." The law goes on to define a
"debt buyer" as "any person or entity that
is engaged in the business of purchasing
delinquent or charged off claims for
collection purposes, whether it collects
the claims itself or hires a third party for
collection or an attorney for litigation in
order to collect such claims."
The act additionally amends RCW
19.16.260 by adding a number of
prerequisites to legal actions by debt buyers.
The amended law requires that, among other
things, no debt buyer may:
*	 Bring any legal action against a debtor
without attaching to the complaint a
copy of the contract or other writing
evidencing the original debt that
contains the signature of the debtor, or:
*	 If a claim is based on a credit card
debt for which a signed writing

44

evidencing the original debt does
not exist, a copy of the most recent
monthly statement recording a
purchase transaction, payment,
or other extension of credit and, if
the claim is based on a breach of
contract, a copy of the terms and
conditions in place at the time of
the most recent monthly statement
recording a purchase transaction,
payment, or extension of credit must
also be attached; or
*	 If a claim is based on an electronic
transaction for which a signed
writing evidencing the original debt
never existed, a copy of the records
created during the transaction
evidencing the debtor's agreement
to the debt and recording the date
and terms of the transaction and
information provided by the debtor
during the transaction.
The act further adds onto RCW 19.16.260
provisions, stating that no debt buyer may:
*	 Request a default judgment against
a debtor in any legal action without
providing to the court evidence
including the documents required by
(a) of this subsection, and
*	 The original account number at
charge-off; the original creditor
at charge-off; the amount due at
charge-off or, if the balance has not
been charged off, an itemization
of the amount claimed to be owed,
including the principal, interest, fees,
and other charges or reductions from
payment made or other credits;
*	 An itemization of post charge-off
additions, if any; the date of the last
payment, if applicable, or the date of
the last transaction;
*	 If the account is not a revolving
credit account, the date the debt was
incurred; and

*	 A copy of the assignment or other
writing establishing that the debt
buyer is the owner of the debt. If the
debt was assigned more than once,
each assignment or other writing
evidencing transfer of ownership
must be attached to establish an
unbroken chain of ownership,
beginning with the original creditor
to the first debt buyer and each
subsequent sale.
The act went into effect in June 2020.
Importantly, an uncodified section of the
act clarifies that the amendments apply
"prospectively only and not retroactively."
Thus, the requirements apply only to "claims
purchased for collection purposes by a debt
buyer on or after [June 11, 2020]."
For more information on the amended
definitions, members can review RCW
19.16.100 as well as ACA SearchPoint
documents #4553, Licensing for Debt
Purchasers, and #2030, State Operational
Definitions for Debt Collector and Debt.
Have you checked out ACA's member-only
SearchPoint library? ACA SearchPoint is
filled with documents that put important
compliance information related to the
FDCPA, FCRA, TCPA, state laws and many
other topics at your fingertips. To access
ACA SearchPoint, visit acainternational.org/
searchpoint.

ACAINTERNATIONAL.ORG


http://www.acainternational.org/searchpoint http://www.acainternational.org/searchpoint http://www.ACAINTERNATIONAL.ORG

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