S.B. No. 400
AN ACT
1-1 relating to the regulation of debt collectors.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Chapter 547, Acts of the 63rd Legislature,
1-4 Regular Session, 1973 (Article 5069-11.01 et seq.), is amended by
1-5 adding Section 7A to read as follows:
1-6 Sec. 7A. CORRECTION OF THIRD-PARTY DEBT COLLECTOR'S FILES;
1-7 BOND REQUIREMENT. (a) If an individual disputes the accuracy of
1-8 an item in a third-party debt collector's file on the individual,
1-9 the individual may give notice of the inaccuracy in writing to the
1-10 third-party debt collector. The third-party debt collector shall
1-11 provide forms for the notice and shall assist an individual in
1-12 preparing the notice when requested.
1-13 (b) Within 30 days after the date on which a notice of
1-14 inaccuracy is received, the third-party debt collector shall send a
1-15 written statement to the individual in which the third-party debt
1-16 collector shall deny the inaccuracy, admit the inaccuracy, or state
1-17 that it has not had sufficient time to complete its investigation.
1-18 (c) If the third-party debt collector admits that the item
1-19 is inaccurate, it shall within five business days correct the item
1-20 in its file and shall immediately send to each person who has
1-21 previously received a report from the third-party debt collector
1-22 containing the inaccurate information notice of the inaccuracy and
1-23 a copy of the accurate report.
1-24 (d) If the third-party debt collector states that it has not
2-1 had sufficient time to complete its investigation, it shall
2-2 immediately change the item in its file as requested by the
2-3 individual, shall immediately send to each person who previously
2-4 received the report containing the information a notice that is
2-5 equivalent to a notice under Subsection (c) of this section and a
2-6 copy of the changed report, and shall immediately cease collection
2-7 efforts if the item involves a debt. When the third-party debt
2-8 collector completes its investigation and determines whether the
2-9 item is accurate or inaccurate, it shall inform the individual of
2-10 its determination. If the third-party debt collector determines
2-11 that the information was accurate, it may again report that
2-12 information and may resume its collection efforts.
2-13 (e) A third-party debt collector may not engage in debt
2-14 collection unless the third-party debt collector entity whether a
2-15 sole proprietorship, firm, partnership, or corporation has obtained
2-16 a surety bond issued by a surety company authorized to do business
2-17 in this state as required by this section. A copy of the bond must
2-18 be filed with the secretary of state.
2-19 (f) The surety bond must be in favor of:
2-20 (1) any person who is damaged by a violation of this
2-21 Act; and
2-22 (2) the state, for the benefit of any person who is
2-23 damaged by a violation of this Act.
2-24 (g) A person claiming against the bond for a violation of
2-25 this Act may maintain an action against the third-party debt
2-26 collector and against the surety. The aggregate liability of the
2-27 surety to all persons damaged by a violation of this Act may not
3-1 exceed the amount of the surety bond.
3-2 (h) The bond must be in the amount of $10,000.
3-3 (i) For purposes of this section, "third-party debt
3-4 collector" means a debt collector, as defined by 15 U.S.C. Section
3-5 1692a(6), other than an attorney at law collecting a debt as an
3-6 attorney on behalf of and in the name of a client, unless the
3-7 attorney has nonattorney employees who are regularly engaged to
3-8 solicit debts for collection or who regularly make contact with
3-9 debtors for the purpose of collection or adjustment of the debt.
3-10 (j) The provisions of this section apply to any person who
3-11 for compensation gathers, records, or disseminates information
3-12 relative to the creditworthiness, financial responsibility, and
3-13 paying habits and other similar information, regarding any person,
3-14 for the purpose of furnishing such information to any other person.
3-15 SECTION 2. This Act takes effect September 1, 1993.
3-16 SECTION 3. The importance of this legislation and the
3-17 crowded condition of the calendars in both houses create an
3-18 emergency and an imperative public necessity that the
3-19 constitutional rule requiring bills to be read on three several
3-20 days in each house be suspended, and this rule is hereby suspended.