HOUSE BILL NO. 4889

A bill to amend 1981 PA 70, entitled

"An act to regulate the collection practices of certain persons; to provide for the powers and duties of certain state agencies; and to provide penalties and civil fines,"

by amending sections 1 and 2 (MCL 445.251 and 445.252), section 1 as amended by 2016 PA 168.

the people of the state of michigan enact:

Sec. 1. (1) As used in this act:

(a) "Claim" or "debt" means an obligation or alleged obligation for the payment of money or thing of value arising out of an expressed or implied agreement or contract for a purchase made primarily for personal, family, or household purposes.

(b) "Collection agency" means a person that is directly engaged in collecting or attempting to collect a claim owed or due or asserted to be owed or due to another person, or repossessing or attempting to repossess a thing of value owed or due or asserted to be owed or due to another person, arising out of an expressed or implied agreement. Collection agency includes an individual who, in the course of collecting, repossessing, or attempting to collect or repossess, represents himself or herself that individual as a collection or repossession agency, or a person that performs collection activities. that are regulated under article 9 of the occupational code, 1980 PA 299, MCL 339.901 to 339.920. Collection agency includes a person that furnishes or attempts to furnish a form or a written demand service that is represented to be a collection or repossession technique, device, or system to be used to collect or repossess claims, if the form contains the name of a person other than the creditor in a manner that indicates that a request or demand for payment is being made by a person other than the creditor even though the form directs the debtor to make payment directly to the creditor rather than to the other person whose name appears on the form. Collection agency includes a person that uses a fictitious name or the name of another in the collection or repossession of claims to convey to the debtor that a third person is collecting or repossessing or has been employed to collect or repossess the claim.

(c) "Communicate" means to convey information regarding a debt directly or indirectly to a person through any medium.

(d) "Consumer" or "debtor" means an individual who is obligated or allegedly obligated to pay a debt.

(e) "Creditor" or "principal" means a person that offers or extends credit creating a debt or a person to which a debt is owed or due or asserted to be owed or due. Creditor or principal does not include a person that receives an assignment or transfer or a debt solely for the purpose of facilitating collection of the debt for the assignor or transferor. In those instances, the assignor or transferor of the debt shall continue to be is considered the creditor or the principal for purposes of this act.

(f) "Person" means an individual, sole proprietorship, partnership, association, corporation, limited liability company, or other legal entity.

(g) "Regulated person" means a person whose collection activities are confined and are directly related to the operation of a business other than that of a collection agency including any of the following:

(i) A regular employee who collects accounts for 1 employer if the collection efforts are carried on in the name of the employer.

(ii) A state or federally chartered bank that collects its the bank's own claim.

(iii) A trust company that collects its the trust company's own claim.

(iv) A state or federally chartered savings and loan association that collects its the association's own claim.

(v) A state or federally chartered credit union that collects its the credit union's own claim.

(vi) A licensee under the regulatory loan act, 1939 PA 21, MCL 493.1 to 493.24.

(vii) A business that is licensed by this state under a regulatory act that regulates collection activity.

(vii) (viii) An abstract company that is engaged in an escrow business.

(viii) (ix) A licensed real estate broker or salesperson if the claim the broker or salesperson is collecting is related to or in connection with the broker's or salesperson's real estate business.

(ix) (x) A public officer or a person that is acting under a court order.

(x) (xi) An attorney who is handling a claim or collection on behalf of a client and in the attorney's own name.

(2) As used in this act, "collecting or attempting to collect a claim", "repossessing or attempting to repossess a thing of value", and "collection activities" do not include any of the following activities of a claim forwarder or remarketer pursuant to in accordance with a contract with a creditor:

(a) Forwarding repossession assignments on behalf of the creditor only to a licensed collection agency that is licensed under article 9 of the occupational code, 1980 PA 299, MCL 339.901 to 339.920, for repossessing or attempting to repossess a thing of value owed or alleged to be owed on a claim.

(b) Pursuant to Under the authorization of a creditor and on the creditor's behalf, providing or procuring the services of an auction or other remarketer in connection with the disposition or preparation for disposition of a thing of value that was previously repossessed by a creditor or by another person on behalf of the creditor.

(c) Communicating with a creditor or the collection agency regarding the performance of any of the activities described in subdivision (a) or (b).

Sec. 2. A regulated person shall not commit 1 or more do any of the following: acts:

(a) Communicating Communicate with a debtor in a misleading or deceptive manner, such as using the stationery of an attorney or credit bureau unless the regulated person is an attorney or is a credit bureau and it is disclosed the attorney or credit bureau discloses that it the regulated person is the collection department of the credit bureau.

(b) Using forms or instruments which simulate Use a form or instrument that simulates the appearance of judicial process.

(c) Using seals or printed forms Use a seal or printed form of a government agency or instrumentality.

(d) Using forms Use a form that may otherwise induce the belief that they have the form has judicial or official sanction.

(e) Making Make an inaccurate, misleading, untrue, or deceptive statement or claim in a communication to collect a debt or concealing conceal or not revealing reveal the purpose of a communication when it that is made in connection with collecting a debt.

(f) Misrepresenting Misrepresent in a communication with a debtor 1 or more of the following:

(i) The legal status of a legal action being taken or threatened.

(ii) The legal rights of the creditor or debtor.

(iii) That the nonpayment of a debt will result in the debtor's arrest or imprisonment, or the seizure, garnishment, attachment, or sale of the debtor's property.

(iv) That accounts have an account has been turned over to an innocent purchasers purchaser for value.

(g) Communicating Communicate with a debtor without accurately disclosing the caller's identity or cause expenses to the debtor for a long distance telephone call, telegram, or other charge.

(h) Communicating Communicate with a debtor, except through billing procedure when the debtor is actively represented by an attorney, the attorney's name and address are known, and the attorney has been contacted in writing by the credit grantor creditor or the credit grantor's creditor's representative or agent, unless the attorney representing the debtor fails to answer written communication or fails to discuss the claim on its the claim's merits within not more than 30 days after receipt of the attorney receives the written communication.

(i) Communicating Communicate information relating to a debtor's indebtedness to an employer or an employer's agent unless the communication is specifically authorized in writing by t he the debtor subsequent to the forwarding of after the claim for collection has been forwarded, the communication is in response to an inquiry initiated by the debtor's employer or the employer's agent, or the communication is for the purpose of acquiring location information about the debtor.

(j) Using or employing, in In connection with collection of a claim, a person use or employ an individual who is acting as a peace or law enforcement officer or any other officer authorized to serve legal papers.

(k) Using Use or threatening threaten to use physical violence in connection with collection of a claim.

(l) Publishing, causing Publish, cause to be published, or threatening threaten to publish lists a list of debtors, except for credit reporting purposes, when in response to a specific inquiry from a prospective credit grantor creditor about a debtor.

(m) Using Use a shame card , or shame automobile , or otherwise bring to public notice that the consumer is a debtor, except with respect to a legal proceeding which that is instituted.

(n) Using Use a harassing, oppressive, or abusive method to collect a debt, including causing a telephone to ring or engaging a person an individual in telephone conversation repeatedly, continuously, or at unusual times or places which are known to be that the regulated person knows is inconvenient to the debtor. All communications shall must be made from 8 a.m. to 9 p.m. unless the debtor expressly agrees in writing to communications at another time. All telephone communications made from 9 p.m. to 8 a.m. shall be are presumed to be made at an inconvenient time in the absence of facts to the contrary.

(o) Using Use profane or obscene language.

(p) Using Use a method that is contrary to a postal law or regulation to collect an account.

(q) Failing Fail to implement a procedure designed to prevent a violation by an employee.

(r) Communicating Communicate with a consumer regarding a debt by post card.postcard.

(s) Employing a person required to be licensed under article 9 of Act No. 299 of the Public Acts of 1980, being sections 339.901 to 339.916 of the Michigan Compiled Laws, to collect a claim unless that person is licensed under article 9 of Act No. 299 of the Public Acts of 1980.

Enacting section 1. This amendatory act does not take effect unless House Bill No. 4887 (request no. H02604'25) of the 103rd Legislature is enacted into law.