Minister On Fair Debt Collection Practices Bill

November 10, 2017 | 21 Comments

Speaking in the House of Assembly today [Nov 10], Minister of Home Affairs Walton Brown provided an update on the progress being made on the development of a bill entitled “Fair Debt Collection Practices Act”.

The Minister said, “We are currently developing legislation to amend the Consumer Protection Act 1999. The proposed bill will be known as the “Fair Debt Collection Practices Act”.

“The aim is to eliminate abusive practices through the creation of regulations under which creditors and debt collectors may conduct business. Debt recovery practices require oversight and regulations to ensure the fair and equitable treatment of consumers during the collection process.

“The Fair Debt Collection Practices will cover all household, family, and personal debts. These include credit card debt, auto loans, personal loans, medical bills, and mortgages. The Fair Debt Collection Practices will not regulate debt generated while running a business.”

The Minister’s full statement follows below:

Mr. Speaker, I rise today to report on the progress being made on the development of a bill entitled “Fair Debt Collection Practices Act”.

Mr. Speaker, the goal of consumer protection legislation is to place consumers, who engage in business transactions such as buying goods, services or securing credit, on an even par with companies who regularly engage in business.

Historically, consumer transactions were presumed fair because it was assumed that buyers and sellers bargained from equal positions of power. Complaints by consumers, however, demonstrate that they are inherently at a disadvantage especially in the areas of consumer debt and the collection of that debt.

Mr. Speaker, when debt is created, it has a financial impact on the spending of consumers and businesses with both short-term and long-term implications. Where debt has to be carried by a business, it is likely to contribute to the inflation of the price for goods and services. When debt is owed by the consumer, it slows consumer spending and hinders the ability of the consumer to function normally in society.

Businesses which are owed money, otherwise known as creditors, have the legal right to take certain steps to collect that money. Many creditors handle the collection process in-house although the collection may be assigned to a debt collector or collection agency. However the legal right to collect money must be fair and equitable and not include practices which are abusive.

Mr. Speaker, we are currently developing legislation to amend the Consumer Protection Act 1999. The proposed bill will be known as the “Fair Debt Collection Practices Act”.

The aim is to eliminate abusive practices through the creation of regulations under which creditors and debt collectors may conduct business. Debt recovery practices require oversight and regulations to ensure the fair and equitable treatment of consumers during the collection process.

Mr. Speaker, the Fair Debt Collection Practices will cover all household, family, and personal debts. These include credit card debt, auto loans, personal loans, medical bills, and mortgages. The Fair Debt Collection Practices will not regulate debt generated while running a business.

Mr. Speaker, the following are but a few examples of what will be included in the legislation:-

  • Verification of Debt – Requiring proper documentation to verify the debt owed; allow for the debtor to review the paperwork from the creditor verifying the debt owed; and ensure proper accounting of debt and interest repayments;
  • Predatory Lending – Eliminating excessive interest rates and penalties that cause or is likely to cause substantial injury to the consumer;
  • Misrepresentation or Deceit – Preventing a debt collector from making false statements to a debtor or in any way use deceit in his or her attempt to collect the debt. This includes misrepresenting himself as a law enforcement officer or an barrister;
  • Harassing Phone Calls – Preventing a debt collector from calling any debtor repeatedly or incessantly with the intent to harass, annoy, or abuse the person;
  • Use of Deceptive Documents – Prohibiting creditors or debt collectors from sending any documents intentionally designed to look like official court documents or documents from any governmental agency;
  • Misrepresentation of the Debt Amount – Prohibiting a debt collector from misrepresenting the amount of the debt, or demanding an amount that is not permitted by the original contract, or by application of law; and
  • Communication with Third Parties – Forbidding creditors and debt collectors to give false information about the debtor to anyone, and from discussing the debtor or debt with any third party.

Mr. Speaker, Honourable Members of the House, it is a statement of fact that business and consumers need each other in order to enjoy a good quality of life. When that balance is being undermined by predatory lending, the Fair Debt Collection Practices legislation will ensure accountability by all parties who engage in the process of credit.

Thank you, Mr. Speaker

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Comments (21)

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  1. Triangle Drifter says:

    Maybe the Minister had better start with how Government collects past due accounts beginning with the method of interest calculation which is done on a per day basis.

    • Joe Bloggs says:

      Government does not collect a lot of unpaid taxes and the like. That is a huge problem for Bermuda.

      • Look In The mIRROR says:

        So if I don’t pay payroll tax by the deadline they can’t sting me with the excessive late penalty anymore?

        If I don’t pay my parking tickets, they cant threaten to lock me up, or take me to court and make me pay additional fines?

        If I don’t pay my mortgage, they cant call me or threaten to take my house from me?

        If I don’t pay my car loan as defined by my contract. they can’t take my car?

        So if I get a late fee on my credit card and they charge me interest, or put a block on my card , I can just call up the minister and say that this is excessive and he will unblock it!

        If I don’t pay my health insurance, and they call me and threaten to cancel my insurance because I have not paid my bill, can they do that!

        Is this guy for real!? why would any business or bank even consider loaning anyone money or extending credit to ANYONE.

        Has he even thought about what the impact would be if there is little or no recourse to businesses lending money? Why lend money, if nobody has to pay it back according to the contract you signed. I guess we will have to go back to borrowing from the loan sharks. They didn’t send letters or call you… they just busted your knee caps!

        This is a “feel good” law, that makes those that don’t want to pay their debt, happy – while hurting those that need a loan.

        • Look In The mIRROR says:

          If I don’t pay Child support can they threaten to lock me up? Can they even threaten to garnish my wages anymore?

          If I import something while traveling and forget to put it on my claims form, and they find it while searching my bag can they still make me pay 3 x N TIMES THE NORMAL DUTY OF 25% because I made a mistake? Can they threaten to seize it?

          Its fine to bully someone if you are the government I guess! Do as we say – not as we do!

        • What?? says:

          Absolutely nothing you have said is true. Not one word. It is pretty pathetic that you have to lie this much to try to discredit this Bill. Sad!

        • jty says:

          I’m curious as to where you get your information?

          Having ministers debate the appropriate balance between debt collectors and debtors seems reasonable. Defining which phone calls constitute harassment could be up for debate, but many of the items here seem long overdue.

          As I was reading this outline, I was shocked by the implication that currently debt collectors are impersonating police officers and drafting documents under government letterhead.

  2. Joe Bloggs says:

    “Businesses which are owed money, otherwise known as creditors …”

    NO. Anyone, whether a business or not, who is owed money is known as a creditor.

    “Verification of Debt – Requiring proper documentation to verify the debt owed”

    That is already required by the courts

    “Misrepresentation or Deceit” are already illegal

    “This includes misrepresenting himself as a law enforcement officer or an barrister”

    Those are already crimes

    “Forbidding creditors and debt collectors … from discussing the debtor or debt with any third party.”

    Bye-bye Bermuda Credit Association. You will be out of business.

    • Paradise Reclaimed says:

      Bermuda Credit Association is the closest Bermuda has to a central reporting agency.

      I own a small business, and I wonder if the Minister realizes how much more credit would be available for consumers through small businesses if we could gather credit information on clients in need of financing. It is not that we don’t want to help, or are unable, it’s that it’s just too risky in Bermuda. There is so little consumer lending because there is no way to effectively check someone’s credit history in Bermuda.

      A central credit reporting agency is needed to track Bermudians’ credit, both good and bad. It would enable healthier and more robust commerce at day’s end.

    • What?? says:

      More lies. MisreMisrepresentation by a debt collector is NOT already illegal. Verification of the debt might be required by a court but there is no requirement that a court be involved before it goes to a debt collector. The only information that can’t be passed to a third party by this Act is false information.

      It is extremely sad that people think it’s okay to lie to try to descredit the Government.

  3. Mark says:

    Any comment on the AC report minister?

  4. Maxed Out says:

    I do think it would also be helpful if the Hon. Gentleman introduced legislation to stop incarceration over non payment of debts. This has frequently been used as a tool of coercion by unscrupulous lawyers acting for the big money or simply vengeful ex-spouses.

  5. More than Concerned says:

    I’d like to see some consideration given with respect to the financial institutions recovering a mortgage debt by claiming the property, selling the property in question at lesser than the market value and still making the previous owner pay any outstanding balance not covered by the sale. I am not aware of anywhere else in the world where this is permitted! Surely, the financial institutions once they have claimed the asset and have full powers to divest themselves of it, choosing to sell it, should take some responsibility for their choices. In my particular situation, they did not work with me at all on several options to avoid what was their choice of actions. And it was a change in rates that landed me in the hot seat as a result of a position being made redundant after over 2 decades of working for the financial institution. so much for working 18 hours a day and being a dedicated employee.
    Sad very sad!

    • Maxed Out says:

      The World’s Local Bank couldn’t care less about locals. You’ve got my sympathy – in fact one of the reasons they love doing what they did to you is all the fees they get to charge the next purchaser in arranging the finance, not to mention the outstanding balance still owed by you.

    • Look In The mIRROR says:

      You worked 18 hours a day for a financial institution for 20 years, had a reduced rate and still couldn’t pay your mortgage? Sorry, I feel for you and I know that loosing your house must have been difficult but I don’t think you are telling the whole story here?

      • Look In The mIRROR says:

        If you borrow, $1000 for house X, and promise to pay $5 per month and don’t, you owe that money back , plus interest. If they can only sell it for $800, then I’m sorry but yes you need to still pay back the balance! They can’t go to the person you purchased it from and ask for it back. You knew that going in! Its not a surprise! It is unfortunate , and I understand your pain because I almost found myself in the same position 7 years ago when the economy tanked and I lost my job. However, I knew my responsibility and knew what I was obliged to pay back. Its not a secret!

    • Zevon says:

      You worked 18 hours a day for two decades?
      Yeah, I don’t think so.

  6. Frustrated says:

    How about the debt that gets collected through the family courts for child support where the father gets a weekly deduction by employer it gets paid to Accountant General and then the respective receiving parent has to wait 2 weeks and sometimes 3 weeks to get that weekly payment.

    I call family court only to be told that they don’t have any pending payments showing speak to Account General.

    I call Accountant General and they say its in process. I call parent receiving deduction form weekly pay and their employer says its been paid to Accountant General.

    Surely with today’s technology and online payments it doesn’t take even 2 weeks let alone 3 to make a payment that happens weekly!

    This leaves me wondering how I am going to get groceries or prescriptions or gas. No doubt I am on a very strict budget.

  7. frank says:

    think before you have anymore children

  8. JUNK YARD DOG says:

    It is time to think about re~ cycling.

    EG : perfectly good cars go to the airport dump WHY ! …. TCD that is WHY !

    Who is in charge of economics around here ? there is too much waste !

    It is about time people started to understand the buying power of money and the escalating cost of living and deal with it.

    ” A fool and his money are soon parted ”

    No mater what ever people have worked for there is always some body ready to take it away its called inflation.

    Inflation destroys the quality of life for all.

    You would think and hope that things are getting better, but they are not going any where. Debt will destroy a nation.

    Where is my cut being of 20 % of my expences from the proceeds of AC, they used my taxes to fund it ?

    Not All seniors are wealthy, not every one over 65 got a fair shake they were sent home, even today your money that you worked for has less value , you get poorer and poorer, because of the escalating cost of goods and services which also prices Bermuda out of the world market.

    Who are you coing to call Ghost busters !

    As soon as you become a senior citizen no body will lend you or give you anything, except abuse. What they fail to realize is that many seniors ,not all, have accumulated value , its called colateral.

    Seniors ,don’t even think about a car loan for a small electric car ,or a replacement fridge for your food, or medical expences and their related premiums ,because it has been determined that you can’t pay, even if you own property which was the right thing to do, even today.

    Money is like the tide it comes and goes, you don’t need to be told that the country is in debt to which is added the private debt now that is a big bundle ,the tide is out , because we are living on borrowed money.

    Interest on the debt buys you nothing.

    WHY !

    Employers including Goverment put you out the door at 65 , that was a big mistake , Ii wonder what the human rights will say about that trick. stop making excuses !

    100% of the public need to do 100% of the work.

    Sure great to be a Senior, who all have value.

  9. JUNK YARD DOG says:

    Every body has got a label thse days .

    If we are SENIORS then y’all must be JUNIORS .

    What SENIORS have forgotten JUNIORS are still trying to learn.

    It is called brain drain.

    What we did in our heads they need a calculator.

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