Report Title:

Collection Agency

Description:

Expands the definition of "collection agency" to any person or business whose principal purpose is the collection of any debts, regardless of whether the debts are owned by a third party.

HOUSE OF REPRESENTATIVES

H.B. NO.

1413

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to collection agencies.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. A substantial amount of the debt collected in America comes from "charged-off" debt that is purchased by a "debt buyer." The debt buyer will then proceed to collect the debt in the same manner as a collection agency. The legislature finds that there is very little distinction between the collection efforts of a collection agency collecting a debt for a third party and the "debt buyer" collecting a debt for itself.

Under the federal Fair Debt Collection Practices Act, the "debt buyer" is subject to the same regulations as a collection agency. However, Hawaii has no similar protections. The legislature finds Hawaii residents need to be protected from abusive collection practices by entities that collect debt in the same manner as collection agencies.

The purpose of this Act is to require entities that are in the business of debt purchasing and collection to be held to the same standards and requirements of a collection agency.

SECTION 2. Section 443B-1, Hawaii Revised Statutes, is amended by amending the definition of "collection agency" to read as follows:

""Collection agency" means any person, whether located within or outside this State, who by oneself or through others offers to undertake or holds oneself out as being able to undertake or does undertake to collect for another person, claims or money due on accounts or other forms of indebtedness for a commission, fixed fee, or a portion of the sums so collected.

"Collection agency" includes:

(1) Any person using any name other than the person's own in collecting the person's own claims with the intention of conveying, or which tends to convey the impression that a third party has been employed;

(2) Any person who, in the conduct of the person's business for a fee, regularly repossesses any merchandise or chattels for another; [and]

(3) Any person who regularly accepts the assignment of claims or money due on accounts or other forms of indebtedness and brings suits upon the assigned claims or money due on accounts or other forms of indebtedness in the person's own name; provided that any suits shall be initiated and prosecuted by an attorney who shall have been appointed by the assignee[.]; and

(4) Any person or business whose principal purpose is the collection of any debts, regardless of whether the debts are owned by a third party.

"Collection agency" does not include licensed attorneys at law acting within the scope of their profession, licensed real estate brokers, and salespersons residing in this State when engaged in the regular practice of their profession, nor banks, trust companies, building and loan associations, savings and loan associations, financial services loan companies, credit unions, companies doing an escrow business, individuals regularly employed on a regular wage or salary in the capacity of credit persons or in other similar capacity for a single employer who is not a collection agency, nor any public officer or any person acting under an order of court."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

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