AG Kilmartin Urges Congress: Don’t Give Lawyers a License to Use Abusive Debt Collection Practices

Attorney General Kilmartin Urges Congress: Don’t Give Lawyers a License to Use Abusive Debt Collection Practices

A bi-partisan coalition of 20 state attorneys general, including Rhode Island Attorney General Peter F. Kilmartin, submitted a letter today urging Congress to oppose the Practice of Law Technical Clarification Act of 2018, which would strip away protections against debt collection attorneys who take unfair advantage of state courts to intimidate, harass and deceive consumers.

If enacted, the Practice of Law Technical Clarification Act would amend the federal Fair Debt Collection Practices Act (FDCPA) to exclude law firms and licensed attorneys engaged in “litigation activities,” shielding them from liability for abusive practices and preventing state attorneys general from using the FDCPA to bring enforcement actions against them. The amendment would also bar individuals from suing debt collection lawyers for damages and reasonable attorneys’ fees. Such lawsuits supplement the work of attorney general offices across the country.

“For years, we have fought to provide consumers protections against unscrupulous debt collection practices that included intimidation, threats, and abusive legal actions.  Passage of this Act would mark the certain proliferation of debt collection litigation, overburdening our courts and consumers who will be required to retain their own counsel to defend themselves no matter if they owe the debt in question.  It’s a bad idea and I strongly urge Congress to vote against the Act,” said Attorney General Peter F. Kilmartin.

The attorneys general argue that “certain debt collection attorneys and law firms routinely misuse their access to the judicial system to take improper advantage of unsophisticated consumers.” These debt collectors’ use of litigation to collect debts disproportionally affects the most vulnerable consumers, who often lack the resources to hire lawyers, including the elderly, disabled and poor.

State attorneys general and the Consumer Financial Protection Bureau have brought numerous actions against the practices of abusive debt collection law firms, which include falsely threatening to garnish the income and social security benefits of elderly and disabled consumers, threatening consumers with arrest and imprisonment for failure to pay debts, improperly suing consumers in courthouses miles from their homes, and filing lawsuits without meaningfully reviewing pleadings and without proof that consumers owe the debt at issue.

Today’s letter comes in response to the House Financial Services Committee’s decision to vote the Practice of Law Technical Clarification Act out of committee.

Joining Attorney General Kilmartin in signing this letter today are attorneys general from California, Delaware, Hawaii, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Vermont, Virginia, Washington and Washington D.C.

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