U.S. Reps. Suzanne Bonamici (D-OR), Bill Foster (D-IL), and Steve Cohen (D-TN) introduced legislation in the House designed to protect consumers from predatory debt collectors.
The Securing Consumers Against Misrepresented (SCAM) Debt Act would protect consumers from debt collectors that use misleading or incomplete allegations to convince people to pay debts they do not legally owe. It also lays out specific requirements that debt collectors must meet before taking legal action.
In 2020, more than 125,000 people filed complaints about debt collection fraud with the Federal Trade Commission (FTC). Each year, millions of debt collection lawsuits are filed against consumers, some that include inaccurate information about the alleged debt and the alleged debtors.
“Predatory debt collection is a pervasive problem that threatens consumers, their livelihoods, and their well-being,” Bonamici said. “The aggressive and unscrupulous tactics these predatory debt collectors take can trail consumers from their homes to their workplace, causing disruption and stress. And frequently, the debt they are seeking to collect does not exist or cannot be verified. The SCAM Debt Act will help consumers by providing them with the information they need to recognize predatory debt collectors and their tactics, and by finally holding these unscrupulous collectors accountable for their harmful practices.”
The SCAM Debt Act is endorsed by the National Consumer Law Center, Consumer Reports, Consumer Action, National Association of Consumer Advocates, Consumer Federation of America, Americans for Financial Reform, and National Legal Aid and Defender Association.
“Predatory and unscrupulous debt collection is a problem for families across the country, and consumers deserve to be protected from it,” Foster said. “This legislation would crack down on debt collection scams and hold debt collectors accountable for using misleading or unreliable information to intimidate consumers.”
Reps. Judy Chu (D-CA), Eleanor Holmes Norton (D-DC-at-Large), Stephen Lynch (D-MA), and James McGovern (D- MA) are co-sponsoring the bill.
“Debt collectors often use predatory tactics that undermine consumers’ rights, using misleading, confusing or outdated information,” Cohen said. “These predatory debt collection tactics affect communities and families in Memphis and across our country. The SCAM Debt Act will make sure that consumers have access to the information they need to exercise their rights while requiring debt collectors to present verifiable evidence for the fair collection of legitimate debts.”