DeclarationCal. Super. - 6th Dist.June 5, 2019Electronically Filed by Superior Court of CA, County of Santa Clara, on 7/24/2020 10:49 AM Reviewed By: D Harris Case #19CV349207 Envelope: 4655219 19CV349207 Santa Clara - Civil D Harris OWQQM$WNH NNNNNNNNNI-IHHHr-nmu-at-n-on-n WQQMbWNHOOWN©M#UNHO I Brian N. Winn (State Bar No. 86779) Laura M. Hoaist (State Bar No. 301082) John E. Gordon (State Bar No. 180053) Jason M. Burrows (State Bar No. 263593) Arnit Taneja (State Bar No. 309882) Grace Gail Cara (State Bar No. 304559) Cherrie Tan (State Bar No. 324871) Katrina Trinh (State Bar No. 327357) Juan Villanueva (State Bar No. 328049) Winn Law Group, A Professional Corporation 110 E Wilshire Ave Ste 212, Fullerton CA 92832 Telephone: (714) 446-6686, Fax No.: (714) 446-6680 18-1 6863»0-X05-CM-5 1 869945 2020-01 Attomeys for Plaintiff SUPERiOR COURT OF CALIFORNIA SANTA CLARA COUNTY, SAN JOSE DISTRICT UNIFUND CCR, LLC, as assignee of DISTRESSED ASSET PORTFOLIO IV, LLC, as assignee of DISTRESSED ASSET PORTFOLIO III, LLC, as assignee of CITIBANK, N‘A. Case No. 19CV349207 Plaintiff’ DECLARATION IN SUPPORT 0F APPLICATION FOR ENTRY 0FVS‘ DEFAULT JUDGMENT PURSUANT KY D VU; a a1” To CIVIL CODE §17ss.60(a) Defendant(s). I, the undersigned, declare as follows: 1. I am an employee of Unifund CCR, LLC (hereinafter, “UCCR”), which performs collection services for UNIFUND CCR, LLC (hereinafier “Plaintift”), and am a qualified witness. i am a competent person over eighteen years of age, and make the statements herein based upon personal knowledge of those account records maintained on Plaintiff's behalf. Plaintiff is the current owner of, and/or successor to, the obligation sued upon, and was assigned all the rights, title and interest to Defendant’s CITIBANK, N.A. account XXXXXXXXXXXX45 l 9 1 DECLARATION IN SUPPORT OF APPLICATION FOR ENTRY OF DEFAULT JUDMNT PURSUANT T0 CIVIL CODE §1788.60(a) f0 3W IQ(Q [Q L1} {Q la) (hereiuafier, the “Account“). I have access t0 and have reviewed the records pertaining t0 the Account and am authorized t0 make this declaration 0n Plaintiffs behalf. Plaintiff purchases portfolios 0f delinquent accounts from either the original creditor 0r a subsequent purchaser Ofthe account. As part 0f its operations. UCCK 0n behalfofPiaintiff, operates and maintains computer systems, into which UCCR, 0n behalfof Plaintiff. integrates electronic records and information received from the seller. I am familiar with the manner and method by wiiich UCCR, 0n behalfofPlaintiff, creates and maintains its normal documents and records. The records are kept in the 110mm! course 0f business. UCCR, 0n behalfof Plaintiff, maintains computerized account records, including the account information {hat was provided t0 Plaintiff by CITIBANK, N.A.. The computerized account records includes the balance a1 the time 0f sale and the date ofsalc 0f the subject account. The records are kept in the ordinary course 0fbusiness by representatives OI‘UCCR, 0n behalfofl’laintiffi who are charged with the duty to accurately record any business act, condition or event 0n the computer with entries made at 0r near the time 0f any such occurrence. On 0r about December 6, 201 8, Plaintiffbecame the successor in interest to this Account. Plaintiff acquired and incorporated the attached account records into its business records, which are not modified 01' altered, as a z'esuli of Plaintiffs purchase Ofthe Account. These records are kept in the regular course of business 0n behalfofPlaintiff, and aiong with the elec£r0nic records provided at purchase, are Plaintiff‘s business records for this Account. Federal law required the original creditor t0 furnish Defendant with periodic statements. The accuracy ofsuch records is relied upon by Plaintiffin purchasing and collecting this Account. These records are relied upon in Plainfiffs and UCCR‘S regular course Ofbusiness. This Account was purchased 0n 0r after January 1, 2014. In accordance with California Civil Code secfion 1788.58(a)(3-8). Plaintiffs records show the following relevant information concerning {he Account. (j,L DECLARATION IN SUPPORT OF APPLICATION FOR ENTRY OF DEFAULT JUDGMENT PURSUANT TO CIVIL CODE §l788.60(a) IQ VD 00 \J C\ LA 4> DJ QC Plaintiffis the sole owner 0fthe Account. The Account was opened 0n January 4, 201 3 and charged off on August 14, 20 1 7 with a balance 0f $2,040.41. Plaintiff's records show that the balance 0f $2.007.77 remains due and owing as 0f February 24, 2020. Plaintiff is not seeking t0 recover any post-charge offimerest and/or fees that may have been imposed by the charge offcreditor or subsequent purchasers 0f the debt and is seeking t0 recover only that portion 0f the charge off balance that remains due and owing as of February 24, 2020. The last payment posted t0 the Account 0n December 16, 2016. The charge-offcreditor name and address at the time ofcharge off: CITIBANK, N.A., 701 EAST 60TH STREET NORTH SlOUX FALLS, SD 571 l. The charge-offAccount number associated with the debt at lime 0f charge off was XXXXXXXXXXXX45 1 9. Defendant’s name and last known address as it appeared in the charge offereditor‘s records: KY D VU, 3637 SNELL AVE SPC 5 SAN JOSE CA 95136. The complete chain Oftitle including CITIBANK, NA. and a1] post charge off purchasers 0f the debt are as foilows: i. CITIBANK, N.A., 701 EAST 60’1‘I~~I STREET NORTH SIOUX FALLS, SD 571 17. ii. DISTRESSED ASSET PORTFOLIO III, LLC, 10625 TECHWOODS CIRCLE, CINCINNATI, 0H 45242. iii. DISTRESSED ASSET PORTFOLIO IV, LLC, 10625 TECHWOODS CIRCLE, CINCINNATI, OH 45242. iv. UNIFUND CCR, LLC, 10625 TECHWOODS CIRCLE, CINCiNNATL OH 45242. 5 DECLARATION IN SUPPORT OF APPLICATION FOR ENTRY OF DEFAULT JUDGMENT PURSUANT TO CIVIL CODE §l788.60(a) 9. Plaintiff‘s records state that Plaimiffor its agents made demand for payment ofthe balance herein prior Io making this declaration and Defendanl(s) failed 10 make full payment ()fthe amount owed 0n the Account. 10. Attached hereto as Exhibits A, B, and C are the account records I have reviewed in executing the declaration that relate t0 the Account and/or payment(s) received. Exhibit A. Seller Data document and Chain 0f Title - establishing the facts required under Civil Code section 1788.58(a)(3_), and ('7). Exhibit B. Billing Statements, including but not limited t0 the most recent monthly statement recording a purchase transaction, last payment, 0r balance transfer while the account was active. Exhibit C. Final Biiling Statement ~ establishing the facts required under Civil Code section 1788.58(a)(4), and (6). 11. The documents attached hereto are true and conect copies 0f documents provided t0 Plaintiff, by original creditor, being a reproduction Ofthe records on file 0n behalfof Plaintiff based upon my review, except t0 the extent that confidential and priviieged infonnation and/or personal identifying information is omitted 0r redacted as required by local rules, and applicable state and federal laws. /// /// /// /// /// /// /// /// /// 4 DECLARATION IN SUPPORT OF APPLICATION FOR ENTRY OF DEFAULT JUDGDENT PURSUANT TO CIVIL CODE §l783.60 (a) \DOONONM-PUJNp-A t) b3 bJ h) hJ b0 hJ h) hJ hi h- hi ha wd rd 12. If called upon t0 testify as a witness thereon, I could and would competently testify as to all the facts stated herein. I declare under penalty of perjury under the laws 0f the State 0f California that the foregoing is true and correct. Executed this Q. day ofgwQ A , 2020, at Cincinnati, OH. r v X "x Signature;WW mmm By: ASHLEY CLAYTON Title: Manager Network & Consumer Support Operations 5 DECLARATION IN SUPPORT 0F APPLICATION FOR ENTRY OF DEFAULT JUDGMENT PURSUANT TO CIVIL CODE §1788.60(a) EXHIBITA .MW .h..a_..m........._ .. _ . _ . . , . ..._..............,..___._ Name: KY D VU Account Number; xxxxxxxxxxxx45 I 9 Table 0f Contents l. CITEBANK, NA to DISTRESSED ASSET PORTFOLIO III, LLC 2. DISTRESSED ASSET PORTFOLIO Ill. LLC t0 DISTRESSED ASSET PORTFOLIO IV, LLC 3. DISTRESSED ASSET PORTFOLIO IV, LLC t0 UNiFUND CCR, LLC Contract ID: UNSMUMAAOSOQ]? Document ID: UNEMUMAAOM3 1801 Document ID: D32118UN1MUIMBB} BILL OF §ALE A39 AfifilfiflMEBI THIS BILL 0F SALE AND ASSIGNMENT daled April 04, 2018, is by Citibank, N.A., a national banking association organized under lhc laWS of the United States, located at 701 East 60‘“ Slreel North, Sioux Fails, SD S7117 (the "Bank") to Distressed Asset Portfolio Iil, LLC (“Buyer”) as successor by assignment :0 Pilot Receivabies Management, LLC, and Citibank, NA. (hereinafter referred to as “Bank"), organized under the laws of the Ohio, with its hcadquartersfprincipai place of business at 1062‘5 Techwoods Circle, Cincinnati, OH 45242 ("Buyer"). For vzdue received and subject to the terms and conditions of the Master Purchase and Sale Agreement dated August 09, 2017 anci Addendum No. 4 daicd Aprii 3, 2018. between Buyer and the Bank (the "Agreemcnl“), the Bank does hereby mmsfcr, sell, assign, convey, grant, bargain, sat over and deliver 10 Buyer, and to Buyer‘s successors and assigns, the Acccmms described in Exhibit 1 and the final electronic fils. Citibank, NA. By: QSignamre) O Name: SemM.Coon .SVP OWNA HSOOMVMbmadorOM.Ste.¢OO KuwGIIyMO 84153 Tine: “m.fnnoongmfifim Dislmssud Asset Ptmfsiio IIL LLC 080917 1 Exhibit l Extract from Exhibit 1, provided by CITIBANK, NA in connection with its sale of accounts to DISTRESSED ASSET PORTFOLIO lli. LLC on 04/04/201 8: Account name: KY D VU Last 4 digits of account number: xxxxxxxxxxxx4519 BILL OF SALE THIS BILL OF SALE is effective as oprrii 4. 20} 8 between DISTRESSED ASSET PORTFOLIO ll], LLCx an Ohio limited liabiEity company ("A.sxvignm'“), and DISTRESSED ASSET PORTFOLIO IV, LLC, an Ohio iimited iiabilit}; company (“Asus’ignee”). Assignos‘, for vaiue received transfers. sens. conveys. grams and delivers 10 Assignee free. clear and unencumbered title to the Accoums described on Attachment A and all oi‘Assignor‘s rights thereto effective as oprri) 4. 20] 8. The sale is without recourse t0 Assignor. [DISTRESSED ASSET PORTFOLIO Ill, LLC} Name: Jessica Stevens Title : Inventory Manager Attachment A Extract from Attachment A, provided by DISTRESSED ASSET PORTFOLIO HI. LLC in connection with its 58k: 0f accounts t0 DISTRESSED ASSET PORTFOLIO 1V~ LLC‘ on 04/04/20! 8; originally obtained from account data provided by CITIBANK, NA in connection with ils sale ofaccoums to DISTRESSED ASSET PORTFOLIO 11L LLC 0n 04/04/2018: Account name: KY D VU Last 4 digits ofaccoum number: xxxxxxxxxxxx4519 mmmmummmmw..¥w BILL 0F SALE THIS BILL OF SALE is effective as of December 6, 2018 between DiSTRESSED ASSET PORTFOLIO 1V, LLC, an Ohio limited liability company ("Assignor"), and UNJFUND CCR, LLC. an Ohio limited liability company (“Assignee”). Assignorq for value received transfers. sells, conveys. grams and delivers to Assignee free, c1ear and unencumbered title t0 the Accounts described on Attachment A and ail ofAssignor‘s rights [hereto effective as 0f December 6, 20] 8. The sale is without recourse I0 Assignm‘. [DISTRESSED ASSET PORTFOLIO IV, LLC] By : (X Name: Jessica Stevens Title : Inventory Manager Angchmem A Extract from Attachment A, provided by DISTRESSED ASSET PORTFOLIO W, LLC in cmzneciion with its sale ofaccounls to UNIFUND CCR, LLC on 1210652018; originally obtained from account dala provided by CITIBANK, NA in connection wish its sale ofaccoums 10 DISTRESSED ASSET PORTFOLIO HI, LLC on 04/04/20 I 8: Account name: KY D VU Last 4 digits 0f account number: xxxxxxxxxxxxfil 9 Account Records 2 154$) and 1551 - [End Redacted ACCOUNT“NUMEER H .M ,, .. . . ‘ xxxxxmxmjélg "§ALE SEGMENT "A A BmswmwmWflflfiB CQDE _-._., m. 202 MW ..PRODUCT DE$CRiPTiON “M Citifimzlgnyggg____________ §Z\L,§1D:_W;_______ WWW Wm‘ 0321 18UN1MU1M~B_ k _ §AkEAMQyNL .. ‘Wmmw- _- $29§Z.-ZZ_.,, . .A WM” - PRLNNQJEAL “WM, _ ....§LZZ§£L..__ _ - , w-PR5 CHARGE OFF TNT'E'R'EST W $20635 7M _ mPRE CHARGE OFF FEES jggp’g , WPOST CHARGE OFF INTEREST ,N __ §gpmofiww~flPOST CHARGE OFF FEES ____ 1 g“ ORIGINAL LOA‘NhaALANCE, _ V _ CHARGE OFF BALANCE Ls} 04d 41‘CURRENT BALANCE M __m M,” $2 Q49 4_1 ___” fl wACCOUNT OPEN DAT'E' 04-356"-13 DEFAULT bATE A 13.Fe:;'1'_7m__m WCHARGE OFF DAT§__ "___” M____,_._,_‘_m_j_4fl:gg -17W__, _ _«__ LAsz: PAYMENTAMOUNfiMM"“M‘Wflggfigq fl 7 HLAST PAYME'N‘Y DATE \___,1e-oa_c_~j§m __ u n a LAs_T PURCHASE AM‘QQM____________________ ; hEAST PURCHASE DATE 12-Apr.16 LAS‘r BALANCE TRANSFER AMOUNT»: LAST BALANCE TRANSFER DATE. LAST CASH ADVANCE A_MQUNT LET:CASH Agyfgucg D'A‘re‘ TOTAL PAYMENTS P631“ CHARGE" oT-‘F ” TOTAL NSF POST CHARGE OFF TOTAL CREDITS POST CHARGE OFF QONSUMER FIRST AND MIDDLE NAME CONSUMER LAST NAME CQNSUMER STATE CgNSUM_ER 2:13 cone Wcé‘NSUM‘é‘R RESIDENCE COUNTRY u flCONSUMER iiESIDENCE PHONE CONSUMER RESIDENCE ADDRESS i "3637 sNEg. Aygfyfiég cowsUMER RESIDENCE CITY m _ ' 13AM Jose ;:. igazmgp BAD NUMBER IND£CATQR CONSUMER SSN OR_ SIN CONSUMER BIRTH DATE AWARENESS INDICATOR LANGUAGE INDICATOR ATT___ORNEY LAW__FERM FfiORNEY NAME ATrORNEY PHONE ATTORNEXADDRESS ATTORNEY cm ATfORNEY sz'T'E ATTORNEY ZIP C0__D_E BANKRUPTCY FILE DATE BK PROOF 0F CLAN PRINCIPAL m” BK PROOF OF CLAIM FEE _MWW‘BANKRUPTCY CASE NUMBER . , . CO-~80RROWER LAST NAME O_Q-~80RROWER SSN OR SIN_ PRIOR ACCOUNT NUMBER 1 BANKRUPTCY CHAPTER f” BK PROOF CF CLAIM lNTEREST H w co BORROWER FIRsT AND MIDDLE NAME W PRIOR ACCOUNT NUMBER 3 PRIOR ACCOUNT NUMBER 4 PRIOR ACCOUNT NUMBER 5 W ‘"‘”“” 1 LENDING LEVEL 1 @3345 w uLENDzNG LEVE1;_2 BANK u . .. .. ...._I . ”fl..- uw. _ u... W . _. M... .;...‘.*:.‘: '~ ~ .-. ‘. _... t _.. . _....__-.... - 1 cits Simpticity‘ card ‘ " ' KY D VU How to reach usMember Since 2013 Account number ending in: 4519 www.cmcards.comBlmnq PerioddZ/lshs-m/ta/I? 1-866-6968673 TTY: 1-800-325-2865 BOX 6500 SEOUX FALLS. SO 5711? Account Summary Mmgmum payment due: $45.55 Previous baience $1,951.42 , Payments $150.00New baiance. $1,829.08 Crews $0.00Payment due date: 02/10/17 Purchases +5090 Cash advances +£0.00 Fees +£0.00 Minlmum Payment Warnlnqzlf you make 0le the minimum payment each lnterest +527.66period, you will pay more in interest and ll w || take you longer to pay off yOurbalance. For example: New ba'an“ 51'829‘08 If ou make no addltlaaal You wlli a H the And you will end upchyarqes uslnq {Ms card balance Ehzigm on this faylnq an estimatepd credit Limitand each month you pay... statement In aboul.. tel of .. Credit “ms: 541800 0m the ¥ mum ayment 12 ear“) $3 587 Incjudes SISOOcash advance tlmlt-...J m_E-n.w,.,.,r_ __Y.___w._. ..M, _ V ..-..-” -W Avallable credit $2,970 557 3 year“) 32-“2 Includes $12 available lor cash advances(Savtnqv $1.475) For Information about credit counseling services. cail 1~877-337-6187. a {ngs’Summary Ptease prEni Address Changes on the reverse side ® Pay oniine www.citlcards.com © p b h Minimum payment due $45.66o . . .av Y p ne 1866 e96 5673 New Mame $1.829.” Pay by mall Use this coupon Payment due date 02/10/17 - Enclose a valid check or money owe! payabie {o cm CARDS. N0 (ash or Iweiqn currency. Ame unt enchsed..0 Write the Inst four digits a! your account number on your check, Account number ending in 4519 KYDVU CITICARDS3637 SNELL AVE PO 80X 78045SPC s Phoenix. AZ 850628045SAN JOSE CA 95336-1363 KYDVU Account Summary Trans. Post date date Description a Amount Paymenss. Credits and Adjustments '2’” PAYMENT THANKXQU. . 55°00 Fees charged Date Descripan Amount bina MEMBERsmp FEE JAN 17-Dec n $0.00 Total teas charged {n thls billing period 50-00 Interest charged Dale Description Amount 0W 'NTE CHARGEDTNIANDAEP.5.934.. $2245 01/13 iNTEREST CHARGED TO STAN DARD PURCH 55,20 527.66Tote! Interest charq-d In thls billing period 2017 totals year-to-date W..Ifiifiiififii.fifififif§.¥1.29". $0.00 Total Interest charged In 2017 5.27.66 Days In bilnng cycle:30 Interest charge calculation .YW Mmlffirfi'mfi“ 893355."??? 91°.fflflfii’flfififfiifiiFiFfiR'l.!‘95{ffif£9‘fi‘.';, Annual percents e Balance subject Balance type rate (AP ) to interest rate Interest charge e.taréétiéfié’s. " 5mm”!.Pfifimw,...................{i‘8,..£;;g.(..\.’.>...,.H......§§;i.’.8..3( $520 AQVANCES Standard Adv $4996 (V) $1,477.96m) $22.46 Your Annual Percentage Rate (APR) is the annua! interest rate on your account. APRs followed by (V) may vary. Batances followed by (0) are determined by the daily balance method (including current transactions)‘ Account messages SAVINGS spomGHI DETAlLs INTEREST: If you have promotional balances on your account, we have estimated your savings. This savings is the difference between the interest that was assessed against the promotional balances using lhe promotionalAPRs and the estimated interest that would have been assessed against thesesame balances using the Standard Purchase APRs. This savings amount doesnot inctude any balance transfer fees. This savings is from your billing periodcovered by this statement. NO LATE FEE: Savings on late fee is determined by reviewing your paymentsand calculating what your late tee would have been on our card Without thisbenefit. if ou paid fate prior to May 2014, savings on fa e fee is determined byusing a $1 late fee (i1 our minimum payment due was less than $15, we usedthat amount as the sav ngs amount). This savings is tram your billing periodcovered by this statemen . CITI EASY DEAL S: If you redeemed {or an item from Citi Easy Deals, savings isthe differgnce beiween the retail or offer price dismayed at citieasxldealsxorn anld the pnce you paid after redeeming your points. This savings is from thepnor calendar month. CJTI PRICE REWIND: J! you received a Citi Price Rewind refund, savings J's therefunded amount. This savmqs is from the prior calendar month. ; I No Late Fee: Citi Easy Dea£s“ - Totai points as of 01/01/17: ;_ 1.188 . Points transferred to your j“, Cltl Easy Deals” Account: 0 ‘ Cit! Easy Deals ‘r Member ID: ,7 Earned tms period '- Adjusted this period 7 Total Earned this period ': Total Earned year to date 1 n VlsH clfleasydealsxomto redeem ; No Citi Easy Deals Points were transferred this month £0 your Clti Easy Deals account ‘ Thls may De because you made no ellqlble f, purchases or because a “3 credIt/adjustment/c‘lspute exceeded the amount o! eligible purchases. www.citicards.com Page 2 of 3 1-866-696-5673 T TY: 1-800'325-2865 $66.88 5: $545.00 I Interest: .. um rz'o'fi". 4‘s' . f3»?! WA w. 5| mm,- --.3 .x, Jyat‘ " ","V 5’15”?- ’~ :."-’.’I'l".‘f:vf',,-'u ‘ 'V‘ -w:e~, 5.». ,5 v.» rr‘ points or for complete program details KY D VU www.cltlcards.com 1-866-696-5673 TTY: f-800~325-2865 CIT! SIMPLICITY LIFETIME SAVSNGS: The savings from fntergskkno late fee, Citi Easy Deals and Citi Price Rewind smce you became a cm Simpllclt cardmernber. This savings amount does not include any baiance trans er fees. You're an important Cigibank customer with muitiple accounts, so we’re pieased to introduce Clti Client First - which ailows you to mana e all of your accounts with a single phone call. An Account Specxalist is here o listen and heip. All you have to do is call! Piease contact us Monda - Frida 7:00AM - 10:00PM; Saturday 7:00AM - 7:00PM; Sunday 8:00AM - :OOPM enlral time at 1-866-680-8625 to speak with an Account Specialist ior more information. Pkease pg sure to pay on time. If you submit your payment by mail. we suggest you gmaul gt no later than 02/03/2017 to allow enough time for regular marl to reac us. Page 3 of 3 H I ; I ~ ' l . ‘ l , 3 i I H I ! 3llfllHXH KY D VU Member Since 20i3 Account number ending m: 4519 Bifling Period:07l15/17-OB/t4/17 Minimum payment due: $2,040.41 New balance: $2,040.41 Payment due date: 09/10/17 Minimum Payment Warnlnquf you make only the minimum payment each period, you will pay more in interest and ii wit! take you songer to pay off your baiance. For example: If you make no additional charges using mls card and each month you pay... And you wlll end up ayinq an estimated otal of... You will pay o" the balance shown on this skalement in about... Only me minimum payment l1 montms) J $2,040 For Information about credit counseling services. call t-877~337-8188. Pay your bill from vmanuy anywhm with the CHI Mobil!“ App and c119 Onllne . - j Io download Cit! 1m 'Apms' to Mycm (5924“) or qo to your device‘s app store. 0r vIsit uwwxfllcardawm How to roach us www.cltlcnrds.com 1-866-696-56731‘800-325-2865 BOX 6500 SIOUX FALLS. SD S7117 Your account is past due. Piease pay at least the minimum payment due. which includes a past due amount of $337.35 and an overlimit amount of $140.41. Account Summary Previous balance $2,007.77 Payments -S0.00 Credits 'SODO Purchases +$0.00 Cash advances +$0.00 Fees +5000 interest +532.64 New bafance $2,040.41 Credit Limit Credit limit $1.900 Includes $0 cash advance 51ml: Please print Address Changeson the reverse side Minimum payment due $2,040.41 New balance $2,040.41 Payment due date 09/10/17 Amount enclosed: Account number ending En 4519 KY 0 VU 3637 SNELL AVE SPC 5 SAN JOSE CA 95136-1363 CIT! CARDS PO BOX 78045 Phoenix, AZ 85062'BO45 KYDVU www.cltlcards.com 1'866'696'56731-800-325‘2865 Account Summary Trans. Post date date Descflption u M _ ”mm Amount Fees charged Total fees charged In this billing period 30-00 Interest charged Date Description Amouni 555‘“ ‘NTEREST CHARGFP T0 STANDARD A9” $2554 08/14 INTEREST CHARGED TO STANDARD PURCH $6.10 $32.64Total Interest charged In this bllllnq period 2017 totals year-to-date .......I921.i5?fi.€§9i99$.’33217".. $0.00 Tosal Interest charged In 20W """éz’a'am Interest charge calculation Days an bmrng cyc:e:3l VW’“N“ ’"°."'.‘§.°;'.E‘3.'.!§.88’.‘§.Sf‘f.£§nf{i'..‘fl‘jfffitlitfiefiW"Wm Annual percents e Balance subject Balance (ype rate (AP ) to Interest rate tnterest charge .8. CHASESmm" .masmm .A.$?78.u.<°.>.......‘.‘..,.. H .3..6'10, Standard Adv 18.99%(V) $1,545.4uo) $26.54] Vow Annual Percentage Rate (APR) is the annual interest rate on your account. APRs followed by (V) may vary. salances 1oilowed by (D) ate determlned by the daily batance method (lncfuding curlent lransactions). Account messages SAVINGS SPOTLIGHT DETAILS INTEREST: H you have promotienal batances en your account, we have estimated your savings. This savings is the difference between the interest that was assessed against the promotional balances using the promotional APRs and {he estimated interest that would have been assessed against these same balances using the Enhanced Purchase APRs. This savings amount does not include any balance transfer fees. This savings is from your billing period covered by this ssatement. NO LATE FEE: Savings on late fee is determined by reviewing your payments and calcuiatinq what your late fee would have been on our card thhout this benefit. Ifgou paid late prior to May 2014. savings on la e fee is determined bJ'usmq a $1 late fee (if your minimum payment due was less than $15, we use that amouni a§ the savmqs amount). This savings 9’s from your biiling period covered by thus statement. CITI EASY DEALS: If you made a the difierenpe between the retai from the prior calendar month. CITI PRIC£ REWIND: if you received a Citi Price Rewind refund. savings is the refunded amount. This savings is from the prior calendar month. CU! SIMPUCITY LSFE’TIME'SAVINGS: The savings from interest, no fate fee, Clti Easy Deals a_nd Cit'i Price Rewind since you became a Citi Sfmplici! cardmember. Thrs savmqs amount does not include any baiance trans er fees. urghase on Citi Easy Deais, your savings is price and the price you paid. This savings is Please note that ii yve received your pay by phone or online pavmenl between 5 pm. ET and midnight E_T on the last day of your biiling period, your payment wnlt not be reflected until your nextstatement. 7 Cit! Slmpllclty Llfetlme Savlnqs I Interest: $68.88 I No Late Fee: $855.00 “A Page 2 of 3 V\E..y_.‘,.,H . J, A A. .. , 1" 23m um .,. _-; 25'5”"?375 7.5". ‘ ‘3? :Wi-ewwsv-Svgm .- '91, m-nm .flgJ-f KY D VU www.c£ticards.cam 1-866-696-5673 1-800‘3252865 If we need to bout your ccou records s e number(s)35W(homawwork) (mobiie). If {m isn't cor , he cus number on the back of your card or update it onléne at www.citicards.com Please be sure to pay on time. If you submit your payment by mail. we suggest you 31a” it no iater than 09/03/2017 to allow enough time for tegular maxi to reac us. Page 3 of3 Brian N. Winn (State Bar N0. 86779) Laura M. Hoaist (State Bar No. 101082) John E. Gordon (State Bar N0. 180053;) Jason M. Burrows (State Bar No. 309882,) Amit 'I‘aneja (Slate Bar N0. 304559) Grace Gail Cara (State Bar N0. 315558) Cherrée Y. Tan (State Bar N0. 324871) Katrina Trinh (State Bar No. 327357) Juan Vilianueva (State Bar No. 328049) Winn Law Group, A Professional Corporation 110 E Wilshire Ave Ste 212, Fullerton CA 92832 Telephone: (714) 446-6686, Fax N0: (714) 446-6680 File N0: 18-16863-0»CDG-DGR- (2020-01) Attomeys for Plaintiff SUPERIOR COURT OF CALIFORNIA SANTA CLARA COUNTY, SAN JOSE DISTRICT UNIFUND CCR, LLC, as assionee of w V - . CITIBANK’ NA” D Case No. 19CV349207 Plaintiff, Limited Civil Case VS PLAINTIFF'S MEMORANDUM OF' CASE IN SUPPORT 0F REQUEST KY D VU’ 6t a1” FOR JUDGMENT Defendanm) Complamt Filed: 6/05/19 Plaintiffhereby applies t0 the Court for entry ofajudgment in a limited civil coilection case. This memorandum: 1) summarizes the evidence presented in the deciaration filed pursuant to Caiifomia Code ofCivil Procedure section 585 ('defaultjudgment ) or section 98 (in lieu 0f testimony at trial) and status ofthe case; 2) establishes that Plaintiff has standing t0 sue as the real party in interest and current owner/assignee of the account; 3) verifies compéiance with Caiii‘omia Civi! Code $1788.60 because the required statement Ofthe debt is attached as a business record, and authenticated in a sworn declaration 0f Plaintiff” s employee. The legislative history Ofthe statute clarifies a declaration from the original Page I PLAINTIFF'S MEMORANDUM OF CASE IN SUPPORT OF REQUEST FOR JUDGMENT IX) L;) 10 ll 12 13 .... ‘JI creditow” assignor of the account is not required. California’s Fair Debt Buyers Practice Act (Civii Code section 1788.50 et seq) adopts a standard procedure t0 collect an assigned chargedwffdebt. During its progress 10 enactment, (from Senate Biil 890 t0 Senate Bill 233), it specifically deleted compliance with the hearsay rule ("Evidence Code $5 1271 and 1272) for business records in the final version oi‘Civil Code § 1 788.60 that was enacted. (See page 23 t0 Plaintiff‘s Request for Judicial Notice, submitted with this Memorandum.) Statement 0f Facts. According Io the Plaintiff's business records, attached 10 the declaration 0f Plaintiff’s employee, {he following facts are the basis for Plaintiffs request for a money judgment. On August 14, 2017, Defendant was indebted t0 CITIBANK. N.A.. the original creditor for the account stated in writing. The original creditor issued a credit card to Defendant, who made payments in accordance with statements received for the account, at least until the last payment received 0r last transaction made 0n December 16, 2016. (Civil Code Section 1788.56): This action is not barred by the applicable statute 0f limitations and compiies with Civil Code Section 1788.58(a2§5). Defendant made payments on the account prior to the default. acknowledging the debt. but has failed to pay the entire balance, leaving a balance due 013100777, as prayed in the complaint. This is the chargedvoffbalance, as reflected in Exhibit “C", less any post charge off credits/adjustments‘ Plaintiffdoes not request any post Charged-offinterest 0r fees, thereby complying with Civil Code $1788.52 (a) ('2). Status 0fthe Case Plaintiffis a debt buyer as defined by California Civil Code section 1788.50(d). The debt was assigned t0 Plaintiffafter January I, 2014, and the assignments and/or biEl ofsale Page 2 PLAINTIFFS MEMORANDUM 0F CASE IN SUPPORT OF REQUEST FOR JUDGMENT I‘Q b) U1 \IO\ documents are attached to the Plaintiff's declaration for each ofthe creditors in the “chain 0f title" for this account as Exhibit “A” [CCP § 1 78852132163]. The assignments include the ledger identifying the defendant‘s account as included in the transfer ofaccounts. The assignments reflect that balance due on the account that is transfen‘ed and last transaction or payment date, as pled in the complaint. Plaintiffis {he sole owner 0f the debt at issue, 0r has authority t0 assert the rights ofall owners ofthe debt. [CC §1 788g'an3 1]. Plaintiff retained counsel herein to file a collection action due t0 defendant‘s failure to pay. Prior t0 the litigation, defendant was sent a letter in accordance wiih Section 16920: ofTitle i5 ofthe United States Code, identifying the debt buyer as the current owner, the balance due, the original creditor. and informing the defendant how to request verification ofthe debt. [g 1788.52 (c) and (6’15 1 1]. Defendant was served with the summons and complaint at the address 0n the statements, 0r a more current address located for defendant. The complaint sets forth the nature ()fthe underlying debt and the last known address 0f the debtor as it appeared in the charge-off creditor’s records prior t0 the sale 0fthe debt. No response 0r contest has been filed in opposition t0 the requested reiief, and therefore the allegations Ofthe complaint should be deemed admitted. Judgment is requested for the amount prayed, the balance at the charge -of‘i', with n0 interest after charge-offumii entry Ofthe judgment. N0 attorney fees are requested, but costs (filing fees and service) are requested pursuant t0 the cost memorandum. A notice 0f imemion to fiie suit was sent t0 defendant prior t0 the filing 0fthe complaint, as rcquired by Caiifomia Code 0f Civil Procedure, 81033. In support 0f its request for judgment, Plaintiff submits a sworn declaration ofan employee with the following business records received with the purchase 0f the account: 1) Exhibit “A”: the bills ofsale / assignments with specific account identification t0 Plaintiffas the current Iegal owner with authority t0 enforce the debt [CC §§1788.52§a}g'1) and ('6‘) and CC $1788.58(a)(8)}; 2) Exhibit “B”: the statement sent to the defendant: showing the last transaction or Page 3 PLAINTIFF'S MEMORANDUM 0F CASE IN SUPPORT 0F REQUEST FOR JUDGMENT k) \J O\ LII DJ OO 11 p. H H U: 4;. u; ,_. 0 Ix.) NJ Ix) b) 1-.) L. payment, 0r transfer oi‘balancc [CC $1788.52 (b) and CC §1788.58(b)]: and. 3) Exhibit “C": the statement showing the charged~0ffba1ance {CC 1788.52 a 2)], and the creditor's name, address and account number associated with the debt [CC § I 788.58g a)(6} and CC §1788.58(a}(’7)]. ARGUMENT AND AUTHORITIES I. PLAINTIFF IS ENTITLED TO A JUDGMENT FOR DAMAGES BASED UPON AN ACCOL TT STATED The essential elements for common count relief. as set forth in Farmers Ins. Exchange v. Ze_rin 53 Cal. App. 4‘“ 445., 460 (1977,) are estabiished by the supporting evidence: 1. A statement 0f indebtedness in a certain sum (Statement attached as Exhibit “8") [Q . Consideration (Le. credit extended for purchases 0r cash advances) 3. Non-paymem (Balance due as prayed in the complaint) In 201 O, after the mortgage crisis and inability to locate the reai panies in interest the mortgage servicing industry. the Federal Trad€ Commission (FTC) took 0n creditors that were collecting assigned consumer debts, “debt buyers" 0f “charged-offconsumer debts” (defined in California Civil Code section 1788.50). The FTC urged states £0 reform the debt colicction litigation process to aid consumers in identifying the assigned debt for Which they are being sued and t0 deveiop standard and consistent procedures t0 obtain a judgment. CaEifomia enacted SB 233 the "Fair Debt Buying Practices“ Act in 2013‘, Civil Code section 1788.50, et seq. To get a judgmem pursuant t0 Section 1788,60 the debt buyer must submit business records that have been authenticated through a sworn declaration, that establish required facts pled in the complaint to properly identify the debtor and account. A copy of‘the contract 0r document evidencing the agrcement t0 the debt is required 10 be atiached 10 the compiaint. The statute Specifically aElows a statement sent to the defendant with the last transaction: “for a revolving credit account, the most recent monthly statement recording a purchase transaction, iast payment. 0r balance transfer shall be deemed sufficient to satisfy this requirement." Civil Code §1788.52 Page 4 PLAINTIFF'S MEMORANDUM ()F CASE IN SUPPORT OF REQUEST FOR JUDGMENT U! NG‘x (£1. Plaintiff‘s sworn declaration authenticates the relevant business records. The statement (Exhibit “8") is produced by the original creditor and was presented 10 the assignee as a legitimate business record for the defendant’s account. The biii Ofsale (Exhibit “A"") specifies the balance due, account number identification, name 0f the defendant, and last payment 0r transaction date. There is no requirement that the sworn deciaration be that 0f the original creditor. The express language mereiy requires authentication by sworn declaration submitted by the debt buyer. h does not require the sworn declaration OfIhe original creditor, as required by the Court in Sierra Managed Asse: Plann LLC v. Hale (2015) 240 Cal. App. 4‘“ Supp. I (“Hale") . In Unifund CCR LLC v. John Dear. 2015 WL 9302796 (“Unifund”), the AppeUate Division 0f the Riverside County Superior Court determined in collection cases that the Plaintiff, as assignee, was entitled to judgment when it had met its burden of proof that the 1) debt was owed by defendant 10 the original creditor, and 2) that I’Iaimiffwas an assignee ofthe debt. The Unifund Court found that the declarant was not required t0 have persona] knowiedge of the account, nor testify as t0 the method of preparation 0f the documents. Ordinaxy credit card biliings and bank statements are by their nature more trustworthy, with entries created near the time Ofthe transaction and subject t0 banking regulations. Procedures are established to comest any entry 0r “mistake”. In Unifund: the defendant did not contest the obligation, nor the balance asserted: but merely objected to the admissibility Ofthe documents. The Comm found the records to be admissible, and any disputed issues could be developed during cross-examination‘ The statute eiiminates the prior practice 0f obtaining a clerk’s judgment wherein the judgment is rendered based upon statements. 11' now requires debt buyer to submit a sworn declaration regarding their purchase 0fthe debt after January 1, 2014, and authenticate the documents that they receive in the purchase. T0 require going back to the original creditor for a sworn declaration clearly extends beyond the purpose offhe slatute, to clarify the Plaintiff‘s is Page 5 PLAINTIFF‘S MEMORANDUM 0F CASE IN SUPPORT 0F REQUEST FOR JUDGMENT b.) (JI the proper party 10 enforce the debt and the account is properly identified. The complaint now requires a business record received in the purchase from the original creditor to identify the debt so the defendant can contest ifdisputed. Hi. LEGISLATIVE HISTORY SUPPORTS PLAINTIFF’S CONTENTION THAT AN ORIGINAL CREDITOR DECLARATION IS NOT REQUIRED Civil Code Section 1788.60 reads: “‘(al) In an action initiated by a debt buyer. no default 0r otherjudgment may be entered against a debtor unless business records, authenticated through a sworn declaration, are submitted by the debt buyer t0 the caurt t0 establish the facts required Io be alleged by the paragraphs (:3) to (8). inclusive, Ofsubdivision (a) in Section 178858.” The legislative history can be reviewed 10 resolve any ambiguity, regarding "who" must be the declarant authenticating the business records. Plaintiffrcquestsjudicial notice ot‘the legislative reports and analysis in the accompanying memorandum that explains the purpose of the enactment of‘the statute. The Court may 100k t0 legislative history 10 ascertain the meaning 0f {he statute, when the language can be construed differentiy. Kaufman & Broad Communities. Inc. V. Performance Plastering. Inc. 133 Cal. App 4‘“ 26, 30, 34 C314 Rptr 3d 520, 523 (.2005). “When construing a statute, a coun’s goal is “to ascertain the intent Ofth'e enacting legislative body so that we may adopt the construction that best effectuates the purpose 0f the law.‘ Hassan v. Mercy American River Hospital (2003 31 Call 4”” 709, 715. 3 Cal Rptr. 3d 623 , 74 P 3d 726 (other ciiations omitted).Generally, the court first examines the statute’s words, giving them their ordinaxy and usual meaning and view them in their statutmy context, because the statutory ianguage is usually the most reliable indicator 0f legislative intent (citations omitted) When the statutory language is ambiguous, a court may consider the consequences of each possible construction and will reasonabiy infer that the enacting legislative body Page 6 PLAINTIFF'S MEMORANDUM 0F CASE IN SUPPORT 0F REQUEST FOR JUDGMENT OOOO‘JO\U‘IADJN.-n NNNNNNNNb-AHMHHHHHMH ?\J 00 intended an interpretation producing practical and workable results rather than one producing mischiefor absurdity...” Gattuso v. Harte-Hanks Shoppers, Inc, (2007) 42 Cal. 4‘“ 554, 567, 67 Cal. Rptr. 3d 468, 478, E69 P. 3d 889. The Cour: in Hglg requires a declaration from the original creditor, while the Court in Unifund allows the declaram t0 authenticate business records received from the assignor. Plaintiff requestsjudicial notice 0f legislative history in bill reports (submitted in a separate memorandum herewith) to see that the purpose of the statute was to ensure Plaintiff testified to being the current owner of a verifiable debt. Witkin describes the statute: “1) In General. In 2013, the Legislature enacted the Fair Debt Buying Practices Act (Q; 1788.50 et seq). The Act is intended to<<*Supp. p.6>> impose enforceable standards on the collection and litigation of consumer debt that has been purchased by a debt buyer following a creditor's charge-off of a consumer debt, without affecting the legal enforceability, 0r collectability, ofa charged-offconsumer debt. (Stats. 2013, Chap. 64, §1.)” 8 Witkin. California Procedure 5m Enforcement ofJudgmeng §12A (Suppl 12A) . A review 0f the legislative history of the Fair Debt Buying Act specifically identifies the goal 10 ensure that the complaint contains sufficient information t0 verify the defendant owed the debt, and establish the documentation necessary for the collector t0 enforce the debt. The legislative histmy discussed the need to develop consistent standards for a Judge t0 use when granting a default judgment. “When those consumers fail t0 respond, there is no advocate t0 raise, 0n their behalf, applicable defenses 0r chalienge the asserts made by the debt buyer. The FTC’S report ?age 7 PLAINTIFF'S MEMORANDUM 0F CASE IN SUPPORT OF REQUEST FOR JUDGMENT noted concern about the number ofdefauit judgments and recommended steps to ‘increase consumer participation in debt collection litigation 10 help decrease the prevalence of‘defauIt judgments,” and noted that ‘[i}n an effort t0 address this problem in another way, some court systems have adopted measures t0 encourage judgment t0 apply appropriate and consistent standards - including legal standards and court ruies in deciding whether t0 grant suchjudgmems.’ (Repairing a Broken System ("fuly 2010) Federal Trade Commission httpz/vawftc‘gov/os/‘QOE0/07/debtorcollectionreportpdf. [as 0f May 3, 2013] at p. 20.) The requirements discussed above essentially provide a sci Ofconsistem standards for a judge to use when granting a default judgment.” See Exhibit "H" 10 Request for Judicial Notice. Senate Judiciary Committee (page 55). The Senate Rules Committee further elaborated the purpose 0f the bill: “This biii is intended to provide better documentation ofalleged debts t0 consumers who are contacted by debt collectors, and to reduce the occurrence 0f debt coilection activities directed toward time-barred debt. or to the wrong person, 0r both. It does so by establishing Clear, enforceable standards governing the documentation required t0 support the collection ofpurchased deiinquem 0r charged-offdebt, particularly in collection litigation.” (See Exhibit “F”, the Senate Banking & Financial Committee analyses, page 37, to the Request for Judicial Notice filed herewith). Plaintiff‘s does submit a sworn declaration from its employee that authenticates the business records received by {he assignment of‘the account, the only requirement in the final Page 8 PLAINTIFFS MEMORANDUM OF CASE IN SUPPORT OF REQUEST FOR JUDGMENT version ofthe statute as passed. Specific requirements to comply with Evidence Code sections 1271 and 1272 were deleted from the final version enacted, when Senate Biil (SB) 890 the predecessor t0 SB 233 are compared. The documents referenced above are set fonh in the Supplemental Reference Documents filed herewith. The court in interpreting the statute can take judicial notice ofthe different versions Ofthe bill. Quintana v. Mercury C0, l 1 Cal 4m 1049, 1064, 48 Cal. Rptr 2d I, 8, 906 P. 2d 1057 (1995). An amendment ofa statute to delete a specific element is persuasive. People v. Soto, 51 Ca] 4”” 229, 1 19 Cal. Rptr 3d 775 (201 1) . Plaintiffattaches the different versions OfEhe biEls (SB980, predecessor 10 SB 233) to show that the legisEature did consider requiring compiiance with the hearsay provisions of Evidence Code sections 1271 and 1272, but specifically deleted the sections in the final version adopted. By requiring merely authentication by a sworn declaration in a collection action, {he legislature adopted a less costiy procedure, without interfering with the entbrceabiiity ofthe debt. The legislatures concern was to prevent judgment entered for against wrong defendants in collection actions for time barred 0r paid debt. The specific disclosure mandated by the Eegislature t0 identify the original creditors, and all assignees in the chain of title. with a required statement from the original creditor creates the threshold {01' a prima facie case, allowing the defendant to come in and contest the debt ifit remains disputed. When unopposed, the defendant can be deemed to have admitted to the debt, clearly identified by the new requirements, and providing appropriate relief if the statute is violated. Enteringjudgment based on Piaintift‘s evidence complies with the purpose ()fthe statute. The evidence establishes a credit relationship between the parties, based on Plaintiff‘s assignm- extending credit 0r funds t0 Defendant. Statements were sent t0 the Defendant, in accordance with the terms and conditions 0f the credit agreement. A statement sent to the Defendant while Page 9 PLAINTIFF‘S MEMORANDUM OF CASE IN SUPPORT 0F REQUEST FOR JUDGMENT OOOONONm-b 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28 the account was still active, showing the last transaction or payment, is attached as Exhibit “B" to the declaration. Defendant has made payments 0n the account, ratifying its existence. Defendant ceased payments, leaving a balance due as prayed in this action. Defendant has not come forward to deny that this is defendant’s account, identified with particularity by the addresses, original creditor and attached statement. Plaintiff has introduced sufficient evidence t0 establish defendant’s Iiability for the debt. Plaintiff‘s complaint and declaration in support ofthejudgmem meet the statutory requirements established for judgment in a debt buyer‘s collection action. These accounts are charged-offusually within six months by the original creditor and sold to third parties t0 enforce the unpaid obligations. The documents adequately identify the original obligation, and the assignees to defendant, in case there is an assertion that the account was previousiy settled. The evidence establishes the unpaid balance and that collection of the debt is not barred by the statute of limitations. This compiies with the purpose the statute was adopted, identifying the account and accurately reflecting its current owner with standing to enforce the obligation. It is unreasonable for a debt buyer to require a declaration from the originai creditor as to the document the debt buyer has purchased and can swear t0 be an authenticate copy ofthe account stated. IV. BUSINESS RECORDS ARE ADMISSIBLE Plaintiff has submitted true copies of‘the business records regarding the defendant’s account it purchased. These include statements Ofthe account received from the originai Page 10 PLAINTIFF'S MEMORANDUM 0F CASE IN SUPPORT OF REQUEST FOR JUDGMENT OOVQ 10 11 E2 13 14 15 16 17 18 19 20 21 22 23 24 2s 26 27 28 creditor and the bills 0f sale transferring the account. These documents are authenticated by the declaration 0f Plaintiff s employee: with the foundation laid that the documents are what they propose t0 be. Evidence Code $SI4OO and I401. As the Supreme Court stated in People v, Goldsmith, 59 Cal. 4m 258, 267-268, I72 Cal Rptr 23d 637 (2014), authentication is essentially a subset 0f relevance, and what must be shown for authenticaEion will vary with each case. “ The foundation requires thai there is sufficient evidence for a trier of fact t0 find that the writing is what it purports t0 be, Le. that it is genuine for the purpose offered. (citation omitted) Essentially: what is necessary is a prima facie case. ‘As long as the evidence would support a finding of authenticity: the writing is admissible. The fact conflicting inferences can be drawn regarding authenticity goes t0 the document’s weight as evidence, not its admissibility’. Jazayeri M(ZOW), 174 Cal App 4“ 301, 321, 94 Cal. Rptr 3d 198.” As discussed in the legislative history, the statute adopted the statement requirement so that the defendant could determine the true nature of the account, from the original creditor. The declaration that the business record was received from the original creditor would comply with the protections the court sought to establish by requiring authenticated business records. The authentication of the document, and laying the foundation for admissibility are distinct from the hearsay issue; The documents can be deemed authentic by other means 10 establish the trustworthiness of the source ofthe information. Authentication requires merely a preliminary determination that the evidence is more than likely what it purports t0 be. The methods ofauthentication are not limited. Here, the facts support the plaintiff’s ciaim that ihe Exhibits are authentic. The exhibits can also be considered an exception to {he hearsay rule, admissible as a business record , pursuant t0 section 1271 of the California Evidence Code : Page 11 PLAINTIFF'S MEMORANDUM OF CASE IN SUPPORT OF REQUEST FOR JUDGMENT J: w rd U! ~40 r-J 4; La) Thc writing was made in the regular course ofa business; (b) The writing was made at 0r near the time oi‘the act. condition, or event; (c) The custodian or other qualified witness testifies t0 its identity and the mode ofits preparation: and (d) The source 0f information and method and time Ofpreparation were such as t0 indicate its trusmorihiness. Plaintiff‘s swom declaration that it received the exhibits as business records from the assignm, and that they have been maintained as business records, retrieved for the purpose ofthe declaration, would be sufficient to estabiish their admissibility. Courts have consistently held that the declarant is not required 10 testify concerning the creation and retention ohhe business records by the original creditor, onfy that it was received as an assigned debt Several additional factorsjustify granting judgment based upon the evidence. 1‘ N0 objectian has been raised that the documents are not authentic. First, the authentication is not required unless there is an objectien raised when offered into evidence. Rutter, Cal. Prac. Guide Civ. Trials & Ex Ch 80B (8:3 1 6), 2 Witkim Cal. Evid. 4th Docu Evid, §7. p. 139 (2000) citing Bank oi‘America v. Taiiaferro. supra at 582. When authentication is properly raised, the burden oi‘the offering parties is to show as a preliminary question that the writing is what ii purports t0 be. A: set forth in Bank ofAmcrica National Trust & Savings Assoc. v. Taliaferro, 144 Cal. App. 2d 578, 581‘ 301 P. 2d 393, 395. (CA. Ist Dist. 1956)‘ “Utterances, written 0r oral, which are not merely statements 0r asscnions offered as evidence OHhC truth ofwhat is stated, but acts in themsefives constituting legal results in issue in the case, like in our case the conclusion of‘the condition sales contract and the assignment d0 not come under the hearsay rule. (Citations Page 12 PLAINTIFF'S MEMORANDUM OF CASE IN SUPPORT 0F REQUEST FOR JUDGMENT omitted.) In Taliaferro, the conditional sales contract and assignment were admissible as non- hearsay evidence of the existence of the contract. Statements ofthe account arc similar operative facts, in the quasi-contract nature ofa common count. 2. Adequate foundation for the records establishes thai {he documents are authentic. A statement of the account and bills 0f sale are operative documents in the transaction, and the records are maintained as computerized business records. There are no alterations that place the documents in question unless highlighted for the Court's reference. The actual subscribing witna‘ss is not required to testify t0 the creation ofthe evidence. The evidence is inherently reliabie. As set forth by the court in County of Sonoma v. Grant W., 187 Cal. App. 3d i439, 1450, 232 Cal. Rplr. 471, 477 (C.A.lst Dist. 1986). “The object ovaidence Code section 1271 is t0 eliminate the calling ofeach witness involved in preparation of the record and substitute the record ofihe transaction instead. As stated by the court in People v. Schmidt, supra, 147 Cal.App. 2d at page 232, 305 P. 26 215, (with reference t0 former Code ofCivil Procedure section 1953i} substantiaily identical in its pertinent language to Evidence Code section 1271): ‘the hard and fast rule that the custodian of the records must be produced is specifically dispensed with by the statute. Undoubtedly the Legislature determined {hat such a rule provoked undue interference with the Operation of business enterprises and was unnecessary t0 insure reliable evidence. In the words ofour Supreme Court in Loper v. Morrison [1944] 23 Cal. 2d 600, 608, 609 [145 P. 2d 11...: ‘ It is the object ofthe business records statutes to eliminate the necessity 0f calling each witness, ami t0 substitute: the record ofthe transaction 0r event. It is not necessary that the person making the entry have personal knowledge Ofthe transaction. (Citing cases.){ci1ation.]’ We conciude that substantial evidence exists as t0 the inherent reliability, accuracy, and trustworthiness 0f the procedures used by Roche”. Page 13 PLAINTIFF'S MEMORANDUM OF CASE IN SUPPORT OF REQUEST FOR JUDGMENT k) VJ) ‘J‘I \lC“. f‘x.) (x) N 1.4-) 3‘ A photographic copy ofthe business record is admissibie under Cal. Evid. Coée section 1550. 4. Defendant has been acknowiedged 0r has acted on the debt. Evidence Code section HLM The existence 0f the account has been ratified by the defendant”s use Ofthe credit card and payments set forth in the szatement, attached as Exhibit "B". The statement shows a payment received and credited t0 the account. When a defendant made payments pursuant t0 the statements received, the defendant has acted in conformity with the account. an adoptive admission oi‘its existence and remaining balance. Prelitigation demand letters were sent to the defendant, in compliance with CCP § 1 788.52 (d gg'l 11 advising debtor Ofthe right t0 request any verification 0fthe debt and where to send the request It has not been disputed by this defendant t0 Plaintiff‘s counsel, 0r if disputed, counsel has provided the information and documents 10 verify the debt in compfiance with Civil Code $788.52 (c). 5. An assignee ofa chose in action, 0r contract, is the real party in interest t0 prosecute the action Plaimiffis the 5036 owner ot’the debt 0r has authority t0 assert the rights ofall owners OfIhe debt. Civil Code $1788.52 (a)(l ). II is the party with standing to collect the debt and the business records should be admissible to establish the existence Ofthe underlying obligation. The statement that sets forth the charged-off balance is attached as Exhibit C”, and there are not any post charge-Off fees or credits t0 the account. Plaintiffwaives any post-Charge offinterest until thejudgment is entered. Civil Code 51 788.52(a)(2). An assignee is entitled to lay the foundation for the documents it has been assigned. The declaram 0f the debt buyer can amhenticale the documents received from the assignor. Courts have rejected evidentiary objections based 0n lack ofpersonal knowledge as t0 their creation. In Page l4 ?LAINTIFF'S MEMORANDUM 0F CASE IN SUPPORT 0F REQUEST FOR JUDGMENT Ix.) 00 \J Ch b) CC k) 4; LLP Mortgage V'. Bizar, 126 Ca}. App. 4‘“ 773, 24 Cal. Rptr. 3d 598 (2005) a servicing agent was allowed to submit evidence as t0 {he promissory note and assignment. Like the coun in Unifund v. Dear, supra, the Court required more thanjust objecting to the documents as inadmissible hearsay and lack oi‘foundation. The court found substantial credible evidence that the assignee could establish the authenticity oflhe loan documents. CONCLUSEON Based upon the accompanying documents, ihe Plaintiff is entitled t0 ajudgment for damages and costs as set forth in the Request t0 Enter Judgment and Cost Memorandum. Datedzaukf 2". logo WI'NN LAW GROUP, APC {‘M" Brian N. W 11m] } Laura M. Hoalst ]John E. Gordon J 1 Jason M Burtows Amit Ianeja ] Glace Gail Cara [ ] Cherrie Y. Tan H Katrina Trinh [ ] Juan Villanueva Attorney for Plaintiff E [ [ [ [ [ Paue 15 PLAINTIFF‘S MEMORANDUM OF CASE 1N SUPPORT 0F REQUEST FOR JUDGMENT Brian N. Winn (State Bar N0. 86779) Laura M. Hoalst (State Bar No. 101 082) John E. Gordon (State Bar N0. 180053) Jason M. Burrows (State Bar No. 309882) Amit Taneja (State Bar N0. 304559) Grace Gail Cara (State Bar No. 315558) Cherrie Y. Tan (State Bar N0. 324871) Katrina Trinh (State Bar No. 327357) Juan Villanueva (State Bar No. 328049) Winn Law Group, A Professional Corporation 110 E Wilshire Ave Ste 212, Fullerton CA 92832 "l”elephone: (714) 446u6686, Fax N0; (714) 446-6680 File N0: 18-1 6863-0-CDG~DGR- (2020-01) Attorneys for Plaintiff SUPERIOR COURT OF CALIFORNIA SANTA CLARA COUNTY, SAN JOSE DISTRICT JNIFUND CCR, LLC, as assignee 0f Case N0. 19CV349207 CITIBANK, N.A., Limited Civil Case Plaintiff, PLAiNTIFF’S REQUEST FOR vs. JUDICIAL NOTICE AND SUPPLEMENTAL REFERENCE KY D VU: et aE., MEMORANDUM OF COMPARISON EXHIBITS FOR LEGiSLATIVE Defendant(s). HISTORY OF SB 233 and SB 890 Complaint FiEed: 6/05/1 9 Plaintiff hereby requests the Couri take judiciai notice 0f the attached documents as legislative history discussing Senate Bill 2335 and Senate Bill 890 (its predecessor), t0 show the purpose 0f the statute enaction and the deletion ofspecific language in CMI Code section 1788.60: “(8) For the purpose 0f {his section, the only evidence sufficient to establish the amount and nature 0f the debt shail be properly authenticated business records that satisfy {he Page 1 PLAINTIFF'S MEMORANDUM OF CASE IN SUPPORT OF REQUEST FOR JUDGMENT K) U! 4‘2 b.) \JO\ requirements 0f Sections i271 and 1272 OfEhe Evidence Code. The authenticated records shall include the foilowing itcmsf" Exhibit A: SB ~ 233 Debt buying with Bill’s I‘listory. (Pages 1-7. and page 8) ~ page 3. 13.xhibit B. SB- 233 Comparison to Vexsion 04/01/13 (pages 1-7) - page 11. Exhibit C: SB - 890 Comparison 10 Version 05/17/1 I(pages 1-7,) - page 19. Exhibit D: SB - 890 Compared t0 Version 02/08/1 1 (page 1-6) - page 28. Also attached are documents for analyses and history 0f the enactment 0fthe statute Exhibit E: Bill Analysis (table) - page 3‘ Exhibit F: Senate Banking and Financial Institutions dated 04/1 5/1 3 (pages 1-8) - page 37. Exhibit G: Senate Floor Analyses dated 05/17/13 (pages 1~8) - page 46. Exhibit H: Senate Judiciary Committee dated 05/06/13 (pages 1-12) - page 55. Plaintiff highlights page 23 herein for deletion 0fthe hearsay requirement referenced. I hereby declare, under penaity of perj ury under the laws of the state 0f California, that the attached documents “Compare Versions” with dates designated, and analysis, are true copies ofdocuments pulled from the website identified as “California Legislative Information”, its address is set forth on the bottom ol‘the page. Dateddukt Q," Zola W’INN LAW" GROUP, APC (”v [ J Brian N VX 11m [ I Laura M iloalst [ ] Jo}1n E. Gordon [ ] Jasonh LBunous H {1 Amit laneja GIace Gail Cara { i] Cherrie Y. Tan HKaIrina Trinh [ ] Juan Villanueva Attorney for Plaintiff Page 2 PLAINTlFF'S MEMORANDUM OF CASE IN SUPPORT 0F REQUEST FOR JUDGMENT Exhibit A SB - 233 Debt buying with Bill’s History. (Pages i-7, and page 8}. Pagg 3 Plaintiff’s Memorandum in Support of Judgment Home ImpWiegjnfo.legislaiure.ca.gov/faccs/billCompareCliemxhm:Ohm mum}mm mom” Page 1 of 6 . -A.‘wsxuu\£ LEGISLATIVE INFORMATEON ‘ a a z 1 ’ E sgmnfmmafion 5 Calttozma Law E Pubfications g OtherResomoes a My Subscriptions My Favwfles 53-233 Debt buying. (2013-2014) SECNON 1. The Legisramre finds and deciares the following: (a) The collection of debt purchased by debt buyers has become a significant fecus o! pub/Ic concern due to me adequacy of dscumentation required to be maintained by the industry m support of its coliection activita‘ES and litigation, (b) State law does not currently prescribe the specific nature of documentation (hat a debt buyer must maintain and produce In a legal action on the debt. (c) Documentation used to support the collection of a debt must be sufficient to prove that me individual who i5 being asked to pay the debt is in fact the individuat associated with the origina! contract or agreement, and that me amount of indebtedness is accurate. (d) I! is important to create documentation and process standards (vr the collecu'an of cansumer debt mat alt interested pames can easfly understand. (e) This act Is not intended to affect the Iegaf enforceabiiity, or collectabi/ity, cf a charged-off consumer debt, but is intended to Impose enforceable standards upon me coilecn‘m and Iitig&tion of consumer debt ma! has been purchased by a debt buyer following the consumer debt's charge off by a credimn (f) Setting spedfic documentation and process standards will protect consumers, pmvide needed Clarity m courts, and establish clearer criteria for debt buyers and the collection industry. (g) This act shall be known, and may be cited, as the Fair Debt Buying Practices AC1. SEC. 2. Tide 1.6C.5 (commencing with Section 178850) is added ro Pan 4 of Dr’vlsian 3 of the CM! Corie, Io read: TIYLE L605. Fair Debt Buying Practices17mm (a) As used in zm‘s rifle.- (J) “Debt buyer” means a person or entity that is regularly engaged in the busr’ness of pumhasing charged-off consumer debt for coflection purposes, whether i1 collects the debt Itself, hiies a third parry for collection, o! hires an attorneyatdaw for collection Iitfgan'on. “Debt buyer" does not mean a person or entity that aeguires a charged ~off consumer debt incidental to the purchase of a portfa/io predominantly consisting of consumer debt mat has not been charged ofi'. (2) “Chargecfloff consumer debt” means a consumer debt that has been removed from a creditor’s backs as an 3552f and treated as a loss or expense, (b) The acauisizion by a check sewices Company of the right to coiled on a paper or etertrom'c check instrument, including an Automated Clearing House Item, that has been returned unpaid to a menrhanr does not constitute a puzthase of delinquen! consumei debt under this (iris. (c) Terms defined in Title 1.6C (commencing with Section 1 788) shali apply to this rifle. (d) This title shall appiy ta debt buyers with respect tc- ali consumer deb! sold or resold on or after January 1, 2014. 1788.52. (a) A debt buyer shall not make any written statemem to a debtor in an attempt to collect a consumer debt unless the debt buyer possesses the followfing information: (J) That the deb! buyer is me sole owner of the debt a1 issue or has authority to assen the rights o! at! owners of the debt. -9, qrn/AAA. hitp://Ieginfo.legisiature.ca.gov/faces/biIlComnamt’fl{pm yhxmwmz mam mm mmvm ~ _. M... u 4 “a A uuxdlUCU {2) The debt balance at charge off and an exp/anarion of the amoum, nazum, and reason for a1! post»cnarge-off Interest and fess, 1/ any, imposed by me Charge-of/ credItor Gr any subsequent purchasers 0f Me debt! Thisparagraph shall nor be deemed to require a specific itemization, but the explanation shall Identify'separately tne Charge-off balance, the total of any past-charge-off interest, and the totai of any pomchargwofl fees. (3) The date of defaufr or the dare of the fast payment. {4) The name and an address of the charge-ofi‘ crem‘rw at the time of charge ofi, and me chargeAcff creditor’saccounz number associated with the debt. ?’he chargamff creditor’s name and addrws sha/l be m sufficient formso as to reasonabfy identify the charge~off credr'tor, (5) The name and last known address of me debtor as they appeared m (he Chargemfl creditor’s records prior rethe sale 0f the debt. 1f the debt was sold prior to January I, 2014, the name and last known address of thedebtor a5 they appeared In the debt owner‘s records on December 31, 2013, shay be sufficient. (6) The names and addresses of all persons or entities that purchased the debt after charge off, including the debt buyer making the written statement. The names and addresses shall be in sufficient form so as to reasonably identify each such purchaser. (b) A debt buyer shal! nor make any written statement to a debtor m an attempt to collect a cansumer debtunless the debt buyer has access r0 a copy of a contract or other document evidencing me debtor‘s agreement tothe debt. If the claim is based on debt for which no signed contract or agreement exfsts, the debt buyer she/z‘have access to a copy ofa document provided to the debim wmle the account was active, demonstrating that thedebt was [named by the debtor. For a revo/w’ng credit account, the most recent mommy statement recoding apurchase transaction, last payment. or balance transfer shall be deemed sufficient to satisfy this mquiremem. (c) A debt buyer shall provide the information or documents identified In subdivisions (a) and (b) to the debtorwithout charge within 15 car‘endar days of receipt of a debtor’s written request for information regarding the debtor proof of the debt. 1f me dew buyer cannot provide {he informarion or documents w/tbin I5 calendar days, thedebt buyer shall cease all collectt‘on of the debt untv‘! the debt buyer provides the debrcr the information ordocumems described in subdivisions (a) and (b). Except as provided otherwise in this rifle, the request by thedebtor shall be consistent with the vafldation requimments contained m Section 16929 of Tme 15 of the UnitedStates Code. A debt buyer sha/l provide al/ debtors with whom Jr has contact en active postal addrsss to whichthese requests can be sent. A debt buyer may also provide an active email address to which these requests canbe sent and through which Information and documents can be, defivered, if the parties agree. (d) (1) A debt buyer shs/I include with Its Hrs: written communication with the debtor m no Smelter Man 12~poin1type, a separate prominent notice that provides: “You may request records showing the foliowmg/ (J) that [insefi name of deb: buyer} 3255 me right m seekcollect/‘m of the debt; (2) me debt balance, including an explanation of any fnteresr charges and add/‘z/onai fees;(3) the date of default or the date of Me lasr payment; (4,) the name of Che chargeroff creditor and the accaunrnumber associated with the debi; {5) the name and last known address 0/ Me debtor as it appeared in the charge“off creditor’s 0r deb: buyer’s recorcféi prior to me sale 0f the debt, as appmpriate; and (6} me names of aI/persons or entities that have purchased the debt. You may also request from us a copy of cine contract or otherdocument evidencing your agreement to the debt. “A request for these records may be addressed to: [Insert deb! buyer‘s active maiiing address and email address,if appiicabie]. ‘ (2) When collecting on a time~barred debt where me debt i5 nat past me date for obsolescence previded for inSection 605%?) ofthe federal fair Credit Repairing Act (25 U‘SIC. Sec, 168) C): “The faw Iimits haw long you can be sued on a debt. Because of the age of your debt, we wilt not sue you for it. Ifyou do not pay the debt, {Insert name of debt buyer] may {continue to] report It to the credit reporting agenciesas unpaid for as fang a5 the {awperm/rs this teparting‘ ” (3,1 When col/ectmg on a time~barred debt where the debt is past the date for obso/escence pmvided for tnSection 605(5) arms federal Fax’r Credit Reporting Ace (15 U.£_C. Sec I58“): ,5, Page 2 offi h1tn:/‘/Ie£1info.legislature.ca.eov/faces/hil?(“nmmwrmcw mum W- m . .u x uuvuucu debwr, the notice required by subdivision (d) s/Ja/l be pro vldea‘ to the debtor r'n {hat language with/n five working days, debtor. (b) A debt buyer that receives payment on a debt shall provide, within 30 calendar days, a receipt or monthly statement, m the debtor. The receipt or statement shall claa/Vy and conspicuously show Nae amount and date paid, the name of (he entity paid, the current account number, the name of the charyevoff credz‘tor, the account number issued by the charye-off creditor, and the remaining balance owing, ifany. The receipt or statement may be praw'ded efectronically if the parties agree. (c) A debt buyer that accepts a payment as payment in full or as a fur’! and fina/ compromise o! me debt, shelf provide, within 30 calendar days, a final statement mat comph'es wfrh subdivisionan interest in a resolved debt, or any personal or financial information related to the resolved debt,1788.56. A debt buyer shall not bring Sui! or initiate an arbitration or otherdebt ff the applicable srarute of limitations on the debt buyer’s c/aim has expired. 1788.59. 1n an action brought by a debt buyer on a consumer debt: (a) The comp/aim‘ shat! allege alt of the folio wing: (J) That the plaintiff is a debt buyer. the debt, (4) The debt balance at charge off and an explanarian of Me amount, nature, and reason for" ai/ post-charyewf/ Interest and fees, if any, imposed by the chargemfl creditor or any subsequent purchase/s of the debt. This paragraph snail not be deemed (o require a specific itemization, but the explanation shaf/ identify separateiy (he charge-ofi‘ balance, the total o/ any post~charge-off interest, and me total of any post-charge-off fees.{’5} The date of default or me dare of the last payment. off creditor at the time of charge 015‘, and the charge-ofi creditor’s {6) The name and an address oi the chaige- ddress sha/I be in sufficient form account number associated with me debt. The charge-ofi' credr‘zor’s name and aso as to leasonably identify the charge-off creditm. (7) The name and last known address oi me debtor as they appeared in the charge-off Cleairor’s records prior ro the sale of the debt If me debt was sold prior to January J, 2014, the debmr's name and last known address as they appaared in the debt owner's records on December 31, 2013, sha/I be sufficient. (8) The names and addresses of all persons or enrm’es that pu/rhased the debt after charge off, z'nc/udmg me plaintiff debt buyer, The names and addresses sha/i be m sufficient form so as to reasonably Identify each such purchaser; (9) Thar the debt buye/ has complied with Section 2 788.52. (b) A copy of the contract or other doctument described m subdivision (b) of Section 2 788.52, shall be attached (a the complaint. shall not be deemed to require the discfosw'e in public records of personal, (c) Tfie requirements of this title of which is protected by any state or federal la w. financiafi or medical information, the confidentiality ,0 r1 nn‘p-»-v» Page 3 of6 Page 4 01"6 , . __).Av4‘u\..\£ 3' 1783.60. (a) In an action initiated by a debt buyer, no default or o(herjudgmen! may be enrered Mains! a debtor g’ unless business records, aumenr/‘caled thraug/z a sworn declaration, are submitted by the debt buyer to {he court II to establish the facts required to be alleged by paragraphs (3) to (8), intrusive, of subdivision (a) of Section J 1788.58. (b) No default or other judgment may be entered against a debtor unless a copy of the contract or other documen! described in subdivfsion (b) of Section 1788.52, authenticated through a sworn dedaratlon, has been J submitted by the debt buyer to the court. I (c) 1n any action on a consumer debt, ifa def): buyer pialnnff seeks .3 defaul! judgment and has not compired with r the quuirements of this title, the court shall not enter a default judgment for the plaintiff and may, m its discretion, dismiss we action (d) Except as provided in this title, this section is no: intended to mcd/‘rj/ or otherwise amend the procedures Established (n Section 585 of r'he Code of Civil Procedure.i 1788.62 (a) In the case of an action brought by an indeuai er individuals, a debt buyer that violates any provision of this title with respect to any pelson shall be liable to that person in an amount equal to the sum of E n I ll (J) Any actual damages sustained by that person as a result of Me violation, inc/uding, bur no: limited to, 2/75 j f amount of any judgment obtained by Me debt buyer a5 5 f persan, I 1 l‘ (2) Statutory damages in an amount as (he court ma I 3 ! y alfow, which shall no: be less than one hundred dollars I ($1 00) nar‘greater than one thousand dollars ($1,000), g ‘ g the amount of Iiability under subdivision (b), the court shall consider, among omer relevant , persistence of noncompliance by the debt buyer; the nature of Me noncompliance, tire ' f f resources of the debt buyer, and the number ofpe/sons adversely affecfed,f z’ (e) A deb! buyer shall have no civil liability under this section ff the debt buyer shows by a preponderance of t evidence (hat me violation was not r‘nt'entiana; and resulted from a bone ride error, and occurred notwithstanding the maintenance ofprocedures reasonably adopted m avoid any er/vr. y liability created by h‘u’s (me shall be brought within one year from the date o! the fast violation. (g) Recovery in an action broughr under the Rosenrnaf Fair [Debt Collection Practices Act {i‘me 1 wirh Sectinn 1788.)) or the:- federaf Fair Debt Collection Practices Act ('15 U.S.C Sec, 1692 e: seq, shall preclude recovery for the same acts In an acnon brought under rm: title. 1788.64. Any waiver of the pmw’s/ons of this title is contrary m public po/ny, and i5 void and unenforceableSEC. 3. Section 581.5 is added to the Code of Civil Procedure, to read: i 581.5. 1n a case involving consumer debt, as defined 1n Section 1788.2 of the Civi/ Code, and as regulated unde: , Title 1.6C,5 (commencing with Section 1788.50) of Pan’ 4 of Divis 'on 3 of the Civil Code, if the defendant debtor appears for (rial on the scheduled trial date, and the plaintiff deb! buyer either @175 £0 appear or i5 not prepared to proceed to trial, and the coun' does nor find a good cause for continuance, the court may, in Its discmtion, dismiss the action with or without prejudice. Notwithsmnd/ng any other lam m this Instance, the court may award me defendant debtox’s costs o/ preparing for trial, Inc/uding, but not limited to, lost wages and tranSportation ,mm‘hw expenses. u- :w ....-A,..lcnn1n27‘9(‘”ovd ~-L¢.4.ln' “1 hnp://ieginfo.Iegislaturc.cagov/faces/bfl hit}?://leginfo.legislature.ca.gov/faces/bi}1C0mpareCijem.xhtm} 7h; 31 {Andm mm mom q a q SEC. 4‘ Section 700,010 of the Code of Civié Procedure is amended to read: 706.010‘ (a) A: the ume of ievy pursuant ta this articie or pmmptfy thereaftér, the levying officer shah serve a copy of the fouowing on the judgment debtor; (2) The writ of execution. (2) A notice of ievy. (3) If the judgment oebmr )s a naturai person, a copy of the form listing exemptions prepared by the Judiciai Council pursuant to subdivision (c) of Semen 6814030, the fist of exemptron amounts pubiished pursuant to subdivision {e} of Section 703,150, a copy of the form that the )udgment debtcr may usa to make a daim of exemption pursuant m Section 703.520, ana’ a copy of the form the judgment debtor may use t0 provide a financial statement pursuant to Section 703.530. (4) Any affidavit bf identity‘ as defined in Section 680,135, for names of me debtor listed on the writ of execution. (b) Service under this section shall be made personany or by man, SEC. 5. Section 706103 of the Code of CM? Procedure is amended ta reads 706.103. (a) The {evying officer shan serve Upon me designated empmyer an of the foaiowéng:(1) The ariginaE and one copy of the earnings withholding order, (2) The form for the employer's return. (3) “The notice to employee of earnings withhoiding order. (4) A copy of the form that the judgment debtor may use to make a claim of exampuon,(S) A copy of the form the Judgment debtor may use to previde a financial statement) (b) At Che time the fevying officer makes sewéce pursuant to subdivls'yon (a), the Sewing officer shail provide the employer wéth a copy of the employer‘s instructions referred Io in Section 706127 The Judicim Ccuncit may adopt rules prescribmg the circumstances when campkiance with this subdivision as not :eqmred.(c) No earnings witnhoiamg order shali be serveé upon me empioyer after the time specffeed m subdivision (b) of Section 699,530. SEC. 6. Section 706104 of the Code of Civil Procedure is amended to read: 706.1%. Any employer who is served with an earnings withhoidmg order shah: (a) Denver to the judgment debtor a tony cf the earnings withholding order, the notice to employee of earnings withhommg a copy of the form that the judgment debtor may use to make a claim of exempzion, and a copy cf the form the judgment debmr may use to provide a financaai statement within 10 days from the date of service. If the judgment dethr 2‘s no ionger employed by the emproyer and the employer doas not owe the empzoyee any earnings; the empioyer is not required t0 make such defivery. The employer i5 mt subject to any cm: liability for fazlure to comply with {his subdivision, Nothing tn this subdivision limits the power of a court to hold the empioyer m contempt of court for fanure to comply with thés subdivision. (b) Complete me employer's return on the form provided by the Ievymg officer and mail it by first-cfass ma“, postage prepaid, to the levying officer within 15 days from the date of service. If the earnings withhowéng order is ineffective. the empJOyer shatf state in the employer‘s return that the order wit; not be compued Mth for this reason and shan return the order to the levying officer with the employer‘s returnSEC. 7. Secu‘on 706.108 of the Code of CM! Procedure is amended to read: 706.108. (a) If a writ of execuuon has been sssued to the county where the judgment debtor‘s empéoyer is to be served and the time specified in subdivision (b) of Sect‘mn 699.530 for levy on pmpet‘ry under the ert has not expired, a judgment creditor may dame: an apoilcatéon for issuance of an eammgs withholdMg order to a remstered process server who may then issue an earnings withhoiding order. (s) 1f me regfistered process server has issued the eammgs withhoidmg order, the registered process server, before serving the earnings withhotdmg order, shanmmm- deposit with the levying officer a copy Vg/ Page 5 offj ..-.v-. http://‘leginfo.Iegisiature.ca.gov/faces/biUCompareCEiemxhtm}7M1 mzvm 2 7n 1 1mm: “w 9 .......mvu of the writ of execution, the appiication for issuance of an earnings withholdmg order, and a topy of the earnings withholding order, and Weera- shaii pay the fee provided cw Section 26750 of the Governmem Code.(c) A registered process server may serve an earnings withhoidmg order on an empfoyer whether the earnings wnhholding Order was issued by a {evymg officer or by a registered process server, but no earrflngs wixhhoidmg order may be served after the time specified in subdwision (b) of Section 699.530. In performing this functfon, the registered process server shan serve upon the desfignated empmyer all of the foliowing: {1) The orlginaS and one copy of the eamings withhoning order (2) The form for the employer‘s return. (3) The notice to the emptoyee of the earnings withhowing order; (4) A copy of the form that thejudgment debtor may use to make a claim of exemption. (S) A copy of the form the judgment debtor may use to provide a financial statement (6) A copy o! the empEder's instructions referred to m Secticm 706.127, except as otherwise prescribed in rules adopted by the Judicfaé Council. (d) Within five court days after service under thss section. aié of the followfing shai! be filed with the levying officer: (1) The wrk of exemt’ron, if i: is not already in the hands of the levying officer, (2) Proof of servéce on the empioyer of the papers tisted in subdéw’sion (c). (3) Instructions in writing, as required by me provisions of Section 687.010. (e) if the fee provided by Section 26750 of the Government Code has been paid, the ievying officer shalt perform aH other duties reqmred by this chapter as if me ?evying officer had served the earnlngs withholding order, if the registered process server does not compw with subdivisicns (b), where apph’cabie, and (0‘), the service cf the earnings withholding order 1's ineflective and the tevying officer she“ is not be» required to perform any duties under the 9% orfier and may terminate the order and may retease any withheld earnings to the judgmentdemon (f) The fee for services of a registered process server under this section 45v shaf/ be aflowed as a recoverabie cost pursuant to Section 1033.5. SEC, 8. Section 706,122 of the Code of CM! Procedure Is amended to read: 708.122. The “notice to employee of' eammgs wnnhoidmg order" shat! contain a statement that Informs me empfioyee in simpie terms of the nature of a wage garnishment, the right m an exemption, me precedure fa:Gaming an exemption, and any other information the Judicial Council determlnes woutd be useful to theempfioyee and appropriate for indusion in the notice, mdudmg an of the foHowmg: (a) The named empmyer has been ordered to withhcid from the earnings of the judgment debtor the amounts required to be withheld under Section 706.050. 0r such other amounts as are specified in the earnings withholding order, and m pay these amounts over to the levying officer for transmittai to me person specified mthe order in payment of the judgment desmbed in the order. (b) The manner of computmg the amounts required to be witnheid pursuant to Section 70t‘:.050, (c) The judgment debtor may be able to keep more or 2m of the judgment debtor‘s Earnings if the Judgment debtor proves that the additiofiai earnings are necessary for the suppom of the judgment debtor or the judg men: debtor's famiiy supported in whore or in part by the judgment debton (d) If {he judgment debtor wishes a court hear'mg to prove that amouns should not be withheid from the judgment debtor‘s earnings because they are necessary for the support of the judgment debtor or the judgment debtor‘s famify supported m whole or m part by the judgment debtor, the judgment debtor shau me with theievying officer an original and one. copy of the “judgment debmr's claim of exemptmn“ and an orig‘anal and onecopy of the “judgment debtor‘s financial statement. ” SEC. 9. The pmvisions of this act are severable, If any prov/sion of this section or {rs app/r'cats'on is held invalid, that r’nvalidity shali not affed other provismns or applications that can be given effect w/Ihour the invalid provision or application. M9, Page 6 0f 6 il‘WflflnaP‘ Page I 0f I A mum Home 5 ammformauon ‘ Caiifomia Law Publications I omerResowces My Subscriptians ‘ My Favorites x(Li: GISIATI \EI NFORMATION SB 233 Debt buying. (2023 2024; r i 1 x i3on: Action 07/11/13 ctmpzerec by Sammy o! sme Chamer 54, 522mm o! 20:3 i 07/1 \IZE Appmved Dy tha Sovemor. 07/03n3 Enrolled and presented Io me Gevémur a: 3 pm‘ i DWOi/ls In Senna. Oracreo m engrossing 6nd enrols‘lng‘ ‘ A 7 ‘ ONOUU fleea zhr‘ru ume‘ Passed. (Ayes 72, woes 0, Page 22¢“ Ordereo u; me Senate. 06/26/23 Read second (ime‘ ordered to Wm mama; ‘ 06/25/13 mm Q) W. SECTION 1 TheWw-maaWefie-HwafimwfiM&anwWWW Legislature finds and declares the following 2 § i‘ i l g (a) The collection of debt purchased by debt buyers has become a significant focus of pubfic Concern due to the 1 adequacy of documentation required to be maintained by the industry in support of its Collection activities and t 3 i | i litiga Hon. E (b) State law does not currently prescribe the specific nature o! documentation that a debt buyer must maintain and produce in a legal action on the debt. 1 (c) Documentation used to support the coliection of a deb! must be sufficient m preve that the individuai who is being asked to pay the debt is in fact the individual associated with me orlgina! contract or agreement, and that the amount of Indebtedness is accurate. (d) It is impenam to create documentation and process standards for the coilecrion of censurner debt mat a/I interested parties can easily understand. (e) Setting specific documentation and process standanfi will protect consumera provide needed clarity m courts, and e5tab/J'sh clearer criteria far debt buyers and the co/iecnon industry. SS-C-T-SQN-L SEC, 2. Titie 1,6C.S {commencing with Section 178850) ts added t0 Part 4 of Divisxon 3 of the Civ‘n Code] to read: TIRE 1 6C 5 Fair Debt Buyers Pmctices Act . 1788 50 (a) As used m this title, “debt buyer" means a person“Wwwmmwwwrmm é WWW o: entity that 1‘s regular}; engaged in the business of purchasing charged off , consumer loans, eamconsumer credit accounts, or other deiinquent consumerWW i WWMWW deb! for coi/ection puzposes whethe; i! co(!ecrs the debt itseff, hires a ‘5mild parry f0! collection, 0r hires an aflorney-a:~law for coilection litigation. ' (b) "Debt buyer” includes any parent, subsidiary, or other affiliate that exem‘ses dhect contra! over the person or enmy described 5n subdivision (a). (c) The acquisitian by a check services company of me right to coffee: (m a papa" or elect/om'c check Instrument, inciudang an Automated Clearing House item, mar has been returned unpaid ta a marches?! does nor constitute a purchase of de/mquénl consumer deb! under this title. (49-) (d) Terms defined in TitSe 1.6C (commencing with Section 1788) shaé? apply to this We, (e) The provisions of (his title shall apply to debt buyers with respect m ail deb: sold 0r resofid on or after July 1, 2013. £48861: J 1788 62. (a) A debt buyer shah not make any written statement to a demor in an attempt to col:ect a consumer WWwWfing-fimmwmmem debt unless the debt buyerWWmMWfiWWWWWW%WW “’20 - Imp:f/leginfo.legislature.ca.gov/faces/billVersionsCompareC)isntxhtnmbifl idmZOI 1201 20... 2/9/70} 7 Page 2 01‘7 E WWWWWwwwaaw ; Z 6 $¢WWWWWW} mawmmmwwmmmmmm jj «WWWWwéW I«WW possesses me following information: {1) That the debt buyer 4‘5 me sole owner ofthe debt at issue, ar has authon‘ty to asser? the lights: of ail myners ofthe debt (2) The debt balance e: charge off, and an explanation of {he amount; nature, and reason for al,‘ post-charge-ofifees and charges, impased by the charge-ofi creditor or any subsequent purchasers of the debt. m‘ssubparagraph shall nor be deemed to mquire a specific itemization cf each charge. (3) The date of defauit or the date of the last payment. {4) The name and an address of rhe charge-off creditor at the time of charge eff, and the charge-off creditor’saccount number associated with the debt. The chargemf/ creditor’s name and address sha/I be (n sufficr‘ent form :y so as to reasonably identify it. {5) The name and last known address of {he debtor as they appeared in the chazge~off creditor’s records prior to ‘ the $a/e of the debt Where the debt was sold prior to January 1, 2013, the name ano‘ last known addregs as theyappeared m the debt owner’s records on December .31, 2022, shall be sufficient. (6) ”(he names and addresses of a}! persons or enrizies that purchased the deb! afier charge off, inciudmg theplaintifi' debt buyer. The names and addresses of these persons or entities shall be in sufficient form so as toreasonany identify them. ‘(b) A debt buyer shall not make any written statement to a debtor in an attempt to colfect a consumer debt 3 unless Me debt buyer has amass to a copy of a Centred or other document evidencing (he debtor’s agreement to "the debt If the Claim is based on debt {or which no signed contract or agreement ewsrs, the debt buyer shallha ve access to a copy of a document previded m the debtor while the account was arrive, demonstrating that the . debt was inCurred Dy the debtor. For a revolving credit account, the most recent monthly statement recording a 'purthase transaction, iast payment, or bay’ance transfer shall be deemed sufficient to satisfy this requirement.l (c) A debt buyer shelf provide me Informats‘on or documents identified in subdivisions (a) and (b) to me debtorwithout charge within 15 carendar days of receipt of a debtor’s written request for information regarding the debti or proof of the debL 1f the deb: buyer cannot provide me information or documents within 15 calendar days, thef debt buyer shelf cease ell collection of the deb: unit? the debt buyer provides the debtor me information ori documents described in subdivisions (a) and (b). Except as provided otherwise in this ride, the request by the 1 debtor shali be consistent with the validation requirements contained in Section 26929 of Title 15 of me United ; States Code. A debt buyer shall provide all debtors with whom it has contact with an activa postal address and anactive email address to which these requests can be sent. A deb? buyer may also provide an active e~mai! address Et0 which these requests can be sent and from which information and documents car: be delivemd, if the patties g agree. § (d) (1) A debt buyer shal! include with its first written communication with me dz’btor in no smaller than 12-point(V06, a separate prominent non‘ce that provides: ‘ "You may request records showing the rallowingr {1) Mat [insert name of debt buyer] has me right to seekcollection of the debt; (2) the debt baiance, inc/um‘ng any additional fees and charges; (3) the dam of default 0rthe date of the fast payment; (4) the name of the creditor and the account number associated with the debt; (5)(he name and last known address of the debtor as- it appeared in the Creditor’s or debt buyer’s records prior tothe sale of the debt, a5 appropriate; (6) Me names of air persons or entitles that have purchased the debt. Youmay also request from us a copy of the contract 0r other document evidencing your agreement to the debt. “A request for these records may be addressed to: [énsen debt buyer’s active mailing address]. " E (2) When coilecn’ng on a time-barred debt where the debt is not past the date for obsolescence provided for inSection 605(9) 0/ the Fair Cledit ReportingAct (25 USA C, Sec. 1681c): xoa/fi htzp://leginfo.}egisiature.cagov/faces/billVersionsComparcCiientxhiml?bill‘” idm201 120120... 2/9/20? '7 M_.-.m._,._._m..--.... §111p:.//lcginfo.legislai'urc.ca.gov/faces/biIWersionsCompareCHennxhthbiliwidmZO1 E20120 Page 3 of? “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for Ir. 1/ yau do not pay the debt, [insert name of debt buyer] may [continue to] report it m the credit repomng agenciesas unpaid " (3) When collecting on a time-barmd debt where the debt i5 past the date for obsolescence provided for in Section 605(a) of me Fair Credit Repairing Act (15 U.S.C. Sec. 1681:): “The few limits how long you can be sued on 3 debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency." (e) Ir a language other than English is principally used by the debt buyer in the initial era! contact with the debtor, a notice shall be provided to the debtor In that Ianguage within five working days. (f) Jn the event of a conflict between the requirements of subdivision (d) and federal law, so that it i5 impracticabfe to comply with both, the requirements of federal law shall prevail. 1768 64. A (a) AI! semement agreements between a debt buyer and a debtor shall be documented in open court or otherwisereduced to writing The debt buyer shall ensure that a copy oi themfiwmémdemmfiwwweeiwdmm-é-Gdmmwneamwfimm¥wismemm written agmement is provided tothe demo; fa; (b) 4W A debt buyer that receives payment on a debt shaII provide, within 30 cafendar days, a receiptor monthly statement, to the debtor. The receipt or statement shall dearly and conspicuously show the amountand date paid, the name of the entity paid, the current account number, the name of the9W charge-offcreditor. imd- the account number issued by themwmermemmfimmfimrefmefwaawmer-burehasow-dHMWHemwm-aWswwedéwaw-Wmfmmamn shadWM charge off creditor, and the remaining balance owing, if any The receipt or statement may beprovided eJectronica/Iy if the parties agree 659 (c) fiawwww{enmwsw-rfmwmtmm~ A debt buyer that accepts a payment aspayment in hm full, or as a fut! and fine! compromise of themwaflwehwu‘be-QWMWhWFfihéflfifiQ-WWHWeredfied» debt shall provide, within 30 calendar days, a final statement that complies with subdivision (b). A debtbuyer shall not sell an interest in a resoived debt, or any personal or financia! Information related to me resolveddebt. $788.56 A debt buyer shaii not brmg ‘ , ‘ ' ’ ’ ~ : . l 4W surt or initiate anarbitration or other [agar proceeding to coiled; a consumer (Sam if the applicable statute of limitations on theW debt buyer's claim has expired. 1788.58. In an action brought by a debt buyer on a consumer debt: (a) TheWWWWWWMWW‘ g ‘ ' ’ ‘ ‘ «W‘-W compfas‘nt shelf allege all of the following: {bi (1)WWWWWwWW That the piaintz‘fi'is a debt buyer. {-«H (2)WMWWMWWWWWE{mew*mwtwdwamWMwfi-WWWMw-regpensrbMAhewama‘seam The nature of the underiying debt and the consumer transaction or transactions from which it is derived,in a shalt and pfain sta tement. (~33 (3) That the debt buyer is the sale emac- owner of the dead};tkflWfiMwamee-edwmrfien-MchWMaWsMa-Wthaw 3f»meanWwwaa-{hww aec-eent-«mW-fiW-evWW debt at issue, or has authority to assenthe rights of all owners of the debt ,ng 2/9/20} 7 Page 4 0f 7 (4) The debt balance at charge off and an explanation of the amount, nature, and reason {or 3/1 post~charge-offfees and charges, imposed 0y the cha/gewff creditor or any subsequent purchaser of me debt. This paragraphshazl not be deemed to reaw‘re a specific itemization of each charge. (5) The date of defauIt or the date of the last payment. {6) The name and an address 0f the ctrazge-ofi‘ creditor at the time of charge off, and the charge-off creditor’saccount number associated wifih the debt, The charge-off creditor's name and address shall be in sufficient formso as to reasonably identify it. (7) The name and last known address of the debtor as they appeared in the creditor’s racords prior w the sale ofthe debt. If the flew was sold pn‘or to January J, 2013, tile debtor’s name and last known address as theyappeared in the debt owner’s records on December 31, 201 2, shall be sufficient. (8) The names and addresses of all persons or entities that purchased the debt arrer charge off, including theplaintifi‘ debt buyer. The names and addresses or thesa persons or entities shall fie in sufficient form so as toreasonably identify them. {9) That the debt buyer has complied with Section 1 788.52 (b) The document described in subdivision (b) of Section 1788. 52, shelf be attached to the complaint. i {.39 (C)WWWWWWHWWWWWWMMWWWRmAMwfiebk-aflerAhe-ewWame-efifi-ehtheéWeWWWe-smmdeba The requirements of this title shall not be deemed (o requirethe disclosure in public records of personal, financlal, or medical information, the privacy of which r‘s protected byany state or fedel‘ai law. 1788.60. (a) 2n an action Jnitiated by a debtWWWWWW.39ansWéebter-rmewamwmheédeaw-WfiwwwwmfihmbhewwWaneszMa-aéméfisébmwe‘eace buyer, no default or other judgment may be entemd against a debtorunless busmess records, authenticated through a sworn deciaration, are submitted by the debt buyer to the cow?to establish the . -. -mm-{fi- facts required to be alleged by paragraphs (3) r0 (8), Inclusive of subdivision (a) ofSection 1789.58. described in subdivision (b) of Section I788 52 authenticated thmugh a sworn deC/aralion, has been submittedby the debt buye/ to the court. A 2' eaw-WWM-W E: q. g . ‘ _ .7 ’ 3 z . l \ g I _ ‘ gewtmmm-ehmémwm m WE dam 5g an ”a, q, r. (c) Wi-wheds In any action on a consumer debt, if a deb! buyer piamtiff seeks a default judgment and g has not complied with the requirements of this seefiem rifle, the court shaH nut enter a defauit judgment for thepiamtiff andW« may, in its discretion, dismiss theWW action. 1788.62. (a)EaWWHmWM-seeueive-WA debt buyer that viofiares anyprovision of this tine wikh respect to any person i-s~ snail be liame toW that person In an amount aqua; to thesum of the fotfowing: E ,023- ")6 pe/flédn 45W hup; fleginfo legislature.ca gov/facesflfil}VcrsionsCompareCIéentxhtmi?biii id=~'20) 120120... 2/9/2017 r (i) Any actua? eamage damages sustained by £43m» ma! person as a result of me L/rOIat/on, r‘nc/uding, bur not ‘ iimfred m, the amount of any judgment obtameo’ by the deb: buyer a5 a result of a time-barred suit to coiled a 3 ¥ deb? from mar person, ‘ 1' Q&WWfiWaHWWmHM-ehw Hr) {2) TMWw-aL-«m-byMMWWWW Statutory damages in an amount asthe court may astow, m- which shall not be éess than {we one hundred do larsWW s ew {$100) nor greater than one thousand deflars {$1,000} per violation. ,2 § I k i i :3 {39 {b} In the case of a daSS acfion,WWM~ a debt buyer that v/oe'ates arty pmvisa‘on of this :ir/e shal/ be§ liable for any statuton’ damaQES for each named pramtlff as mwmmaragmah-{wrawys i I f E maM-as- provided in paragraph {2} of subdivision (a). If me cow? finds mat the deb! buyer engaged in a pattern end practice of vxolaring any pmvision o! this title the court mayWW award additmnal damages to the c1355 m an amount nor to exceed the lesser of five hundred thousand dotlars ($500 000) 0r 1 p8 cent ar’ me ne! worth or the deb! buyerv {-3») (c) (1) 1n the case of any successful action to enforceWWW Iiabizr’ty under this section,the court sha/f award costs of the action, together with a~ reasonabie attorney’s fiee fees as determined by thecourt, {2) Reasonabte attorney‘s fees may be awarded Io a prevailing debt buyer upon a finding by the cow that the piaintlff‘s prosewtion of me action was not in good faith. ; {ha (d) In determining the amount of )iabiiity underWWW subdiw’slon (b), the counshat! consider, among other reéevam factors, the frequency and persistence of noncompliance by thedebt buyer, the nature of the nancompfiance; me resources of the debt buyer, and me number of personsadversely affectedWHWMWMHbfimeet-wwwammwWWQWWW A have no civi? liability under this 4e} (e) A debt buyer shalt , section 5f the debt buyer shows by a preponderance cf evidence the: the vioIation was noz ‘mtentional and resuited from a bona fide esper- error, and occunea notwithstanding the maintenance of procedures reasonabiy Q mm adopted to avoid anyW error‘ f «6y (f) An action to enforce any liability created by this titie may shaft be brought witmWWMeE «WWW. one year from the last vioiarion (g) Recavery m an action brought under the Rosentha/ Fair Deb! Collection Practices Act (TiNe 2.6C (commencing with Section 1788,} or the federal Fair Debt Collection Practices Act (15 U.5‘C. Sec, 1692 er seq.) she!) preclude recovery {or the same acts :‘n an action Draught under this title. 1788.64. Any waiver of the provisions 0f tm's tide ts contrary m pubfic pokicy, and :s void and unenforceabie‘ j SEC 2~ 3 Section 581. 5 is a ded t0 the Code of C‘w's Procedure 2t. read. 581.5. In a case invow'mg consumer debt, as defined in Section 1788.2 of the Civié Code, and as regulated under g ' Tine 1.605 (commencing with Sectmn 178850) of Part 4 of Division 3 of the Civff Code, if the defendant debtor f appears for trial on the schedu!ed trial date, and the piaintéfi debt buyer either faiis to appear or {s not prepared to proceed to rriat, and the court does not find a good cause for continuance,qummm-ww i Gamer?- the court may, in its discretion, dismiss the action wtrh 0r without prejudice Notwithstanding any other Jaw, in this instance, the court may award the defendant debtor‘s costs of preparmg for mm, mduding but not E limited to, inst wages and transportatmn expenses. SEC. 31 4. Secfion 700010 or the Code of CM) Procedure is amended to read: 700.010. (a) At the time of levy pursuant to this article 0r promptly thereafter, the $evymg officer shalt serve a l copy of the foiiowing on the judgment debtor; , JV“htzp://ieginfo.iegismureca.gov/faces/bi1}VersionsCompareCIfient.xhtmmn‘11midz20l 120128... 2/9/20 i 7 Page 6 of 7 (1) The writ of execmion. (2) A notice of Ievy, (3) 1f the judgment debtor r’s a natural person, a copy of the form iisting exemptions prepared by the Judicial Councn pursuant to subdivision (c) of Section 681.030, the Hst of exemption amounts published purSuant to subdivision (e) of Section 703.150, a copy of the form {hat the judgment debtor may use to make a cfaim of exemption pursuant to Section 703.520, and a copy of the form the judgment debtor may use to provide a financéat statement pursuant to Section 703.530. (4)Any affidavft of identity, as defined m Section 680.135, for names of the debtoy lésted on the wn‘L of execution, I (b) Semce under this section shah be made parsonally or by man. SEC. 4: 5. Section 706.103 of the Code of Civil Procedure «s amended m read: 706.103. (a) The levying officer shali serve upon the designated empioyer at: of the foliowing: (1) The uriginat and one copy of the earnings withholding order. : £ (2) The ferm for the empwyer’s return. (3) The notice to employee of earnings withholding order. y; (4) A copy of the form that the judgment debtor may use to make a claim cf exemption I (S) A copy of the form the judgment debto: may use to prcvide a financial statement. (b) At the time the ?evying officer makes service pursuant to subdivision (a), the lewmg officer shew provide the emp‘oyer with a copy of the employer’s instructions referred to in Section 706,127. The Judtcim Council may f adopt rures prescribing the circumstances when compliance with this subdivision is not required. (c) No eaméags withholding order shat) be served upon the employer after the time specified in subdivision (b) of Section 699.530 SEC. E 6, Section 706.1 04 of the Code of Civil Procedure is amended to read: 706.104, Any empioyer who Is served with an earnings witmmidmg order snail: (a) Denver tc the judgment debtor a copy 9f the eammgs withhotdmg order, the notrce to employee of earnings withholdmg, a (Opy of me ?Orm that the judgment debtor may use to make a daim oi exemption, and a copy ofg the form the judgment debtor may use to provide a financial siatement within 10 days. from the date of semce. if i the judgment Debtor i5 no ?onger employed by the employer and the employer does no! owe me empioyee any eammgs, the empioyer £5 not required to make such deiwery. The empéoyer is not subject to any cwi! liability for failure to comply with {hrs subdivision. Nothing in this subdivision limits the power of a court to hoid the empioyer g in contempt of court for Faiiure to comply with this subdivision, (b) Compiete the employer’s return on the form provided by the levying officer and ma)? it by first»c!ass man, postage prepaid, r0 the levying officer within 15 days from the date of service. 1f the earnings mrhhoiding order is ineflective, the employer shall state In the employer’s return (hat the order wiu not be complied with for this reason and shan return the order to the levying officer with the employer‘s return. i SEC. g: i, Section 706.108 of the Code of CM! Procedure is amended to read: 705.108. (a) 1f a writ of execution has been issued to the county where the judgment debtor’s empioyer is t0 be served and the time specified in subdivision (b) of Section 699.530 for ievy on pmperty under the writ has not expired. a judgment creditor may deéiver an appiicatfion for Issuance of an earnings withhoidfng order t0 o registered process server who may then issue an earnings withhoiding order. (b) If the registered process server has issued the earnings withhoiding order, me registered process server, j before serving the earnings withhowing order, shat! depom‘t with the ievying officer a copy of the writ of f execution, the appficarion for issuance of an earnings withhofding order, and a copy of the earnings withholding f order, and shau pay the fee provfided by Section 26750 of the Government Code. .(c} A registered process server may serve an earnings wr‘thhoidmg order on an empioyer whether the earnings w;thhoidéng order was issued by a Ievymg officer ot by a registered process server, but no earnmgs withholmng .~ 7‘3“ /mhttpz/fleginfo.kegislature.ca.govffacesfbi}IVersionsCOmpareCIientxhnni7biilwidr~20E 120 } 20. .. 2/0/70] 7 rage /oi 7 _ order may be served after the time specified in subdivision (b) o! Section 699.530. In performing this function, E the registered process server she” serve upon the designated employer a” of the following: (1) 'l‘he original and ane copy of the earnings withholding order. i(2) The form for the emptoyer’s r&tum. (4) A copy of the form that the judgment debtor may use lo make a claim of exemption. f E i f l} (3) The netice to the employee of the earnings withholding order. t f (5) A copy of the form the judgment debtor may use to provide a financial statement,i i I l i (d) Within five court days after service under this section, aH of the foNowmg shafit be Med with the ievying 3 {I officer: ' (1) The writ of execution, If it is not already 5n the hands of the levying officer. (2} Proof of service on the employer of the papers listed in subdivision (c) I (3) Instructions m writing, as required by the provisions of Section 687.010. i I f 1' (e) If the fee provided by Section 26750 of the Government Code has been paid, the levying officer shall perform g 5' afl other duties required by this chapter as Jf the ievying ofiicer had served the earnings withholding omen If thef registered process server does not comply with subdivisz‘ons (b), where appiicabie, and (d), the service of the3 earnings withholding order is ineffective and the fevying officer is not required to perform any duties under theIf order and may terminate the order and may release any withheid earnings to the judgment debtor‘ - I l 1 i (f) The fee for services of a registered process server under this section shafl be allowed as a recoverable costpursuant to Section 1033.5. I SEC. 1v 8. Section 706.122 of the Code of Civi? Procedure is amended to read: shall contain a statement that informs the fhe right to an exemption, the procedure for ‘ Councii determines would be useful to the 706.122. The “notice (o employee of earnings withholdmg order"empioyee in simple terms of me nature of a wage garnishmentl tcialming an exemption, and any other information the Judicialemployee and appropriate for inclusion in me notice, Jnciuding aif of the fofiowmg: (a) The named employer has been ordered to withhoid from the earnings of the judgment debtor the amounts ;’ required to be withheid under Section 706.0501 or such other amounts as are specifieé in the earnings (b) The manner of computing the amounts required to be withhew pursuant to Section 706050. the judgment debtor‘s earnings If the judgment {c} The judgment debtor may be abie to keep more or a“ of judgment debtor or the judgment i debtor proves that the additional earnings are necessary for the support of thedebtor’s family supported in whoie or in part by [he judgment demon (d) I.‘ the judgment debtor wishes a court hearing to prove that amounts shcuw not be withheld from thcjudgment debtor's earnings because they are necessary for the support" of the judgment debtar or the judgmentdebtor’s family supported an whole or in part by the judgment debtor, the judgment debtor shaif file with the 5 ievying officer an originai and one copy of the “judgment debtor's ciaim of exemption" and an original and onecopy of the “judgment debtor's financial statement“ ”20/ http://leginfo.legislature.cagov/faces/billVersionsCompareCliem.xhtml?biil¢id=20I 120120... 2/9/20: 7 Exhibit D SB - 890 Compared to Version 02/18/1 1 (page 1-6). Page Z2 Plaintiff‘s Memorandum in Support Ofludgmcnt L7 ”N 07"i?2’(¢’1 LEGISLATH/E INFORMA'IWON Home ; Biugnfomlauon 9 Canmmla Law Pubiicafions 3 OmerResources MySubscripfions MyFavorMes 58-890 Debt buyers. (2211’2c12) { Calmpékr‘Qenvsiéns i Current Version: 05/127/ 2 Amended Assembfy Compared m Version: [02/18/11 » Vlmr‘cfiqqevd HG3 SECTSON 1. The Legisiatum finds and declares the foilowing: (a) The colfection of debt purchased by debt buyers has become a significant focus of pube’ic conce n due to the adequacy 0f documentahon reqwred to be maintained by the industry m support of its collection actrvm'es and litigation (b) State law does nor currentiy prescribe the specific nature 0f documentation (hat a debt buyer must marmam and pmduce in a legal action on the debt‘ R (c) W4MMHW+WMHWewWMWWWWHtM g MwWflWWWWW¢ MM g 5 WkW W WWW :y wmméhemtmwawm4emveT Documentation used to I 3 support the collection of a debt must be sufficient (a prove that the individual who is being asked to pay the deb: * (s m fact the individual associated with {he original contract or agreement, and that Me amount o! indebtedness is affiliate. i E {d} If is important to create documentation and process standards for the collectmn of consumer dent that all l interested parties can easny understand, (e) Setting specific documentation and orotess standards will protect consumers, prow‘de needed danty to I cauds, and establish clearer criteria for debi buyers and the cofiection industry" SEC. 2. Title 1‘6C5 (commencmg wit!) Section 1788,50) 2’s added m Pan 4 of Div/sion 3 of the Civil Code, {o read; I 1788.59. (a) As used in this title, “debt buyer" means a person or ent/ry {hat i5 regw‘ar/y engaged m the business of purchasing charged-off consumer foams, cousumer credit accounts, or other delinquent consumer debr for collech‘on purposes] whether it called: me debt itse/f, mres a third 05ml for coltecr/‘on, or hires an anomeyaln’aw for collection Im'gation, I i E TITLE 1.605. Fair Debt Buyers Pracfices Ac! € (b) "Deb: buyer" includes any parent, subsidiary, or omer affiliate that exem’ses direct confro! over me person or entity described {n subo‘iwsion (5/2 (c) The acqu/s/rion by a check services compamy of the ngm (0 conec! 0n a paper or e/eczrom: check instrument, 3 includmg an Automated C/ean’ng House (zem, Mat has been returned unpaid Io a merchan! does net consulate a purchase of delinquent consumer debt under this tide 1 (d) Terms defined (n Titie 1,6C {commencing wz‘m Section J?SB) shafiapply to this title. (e) The provisions 0f this title shaJI apply r0 debt buyers with respect to a(l debt sofld or resold or: or after Juiy 2/ L 2013. 5 I 1788.52. (a) A debt buyer snail not make any written statement to a debtor in an attempt to collect a consumer ; § debt uniess the debt buyer possesses the fo/lowing information: g(J) That the debt buyer (s me sole owner of the debt at issue, or has author/ry to assert me rights of a"! owners ofthe debt. 0{1726/ http:#‘x’ieginfolegisiamre.m.gov/‘facesfbfli VersionSCOmpareClicmxhtm]?billmidfiEO1 1202 2U... 2/9/2017 Page 2 0f 6 i (2) The debt baiance at charge off, and an exp/anauon of (he amount, nature, and reason for all posbmargeof? fees and charges, imposed by me charge-off aedxor or any subsequent purchasers cf me debt. 77;:‘5 subparagraph shaii not be deemed (a require a specific itemization of each charge. (3,) The date of default or the date of the last payment (4) The name and an address of the marge-off creditor at the time of charge off, and the charge-off creditor’s account number associated with the debt. The charge-oh’ creditor‘s name and address shall be In sufficient form so as to reasanab/y identify ft. (5) The name and last knawn address 0f the debtor as they appeared m the charge-otf crediror's records prior to f, the sale or the debt. Where the debt was sold prior to January I, 2013, the name and last known address as they appeared in the debt owner‘s records on December 31, 2012, shaft be suficmnt. (6) The names and addresses of all persons or entities that purrhased the debt after charge off, including the f plaintiff debt buyer. The names and addresws of these persons or entities shat! be :‘n sufficient form so as to reasonably identify them. 1 f (b) A debt buyer shall not make any written statement to a debtor in an attempt m collect a coasumer debt unless the debt buyer has access to a copy of a contract or other document evidencing the debtor's agreement r0 me debt. If the claim Is based on debt for which no signed contract or agreement exists, the debt buyer shall have accws m a copy o/‘a document provided to the debtor while the account was active, demonstrating that the debt was incurred by the debtor. For a revolving credit account, the most recent monthly slatement rewrdfng a 3 purchase transaction, 1a st payment, or balanca transfer shall be deemed sufficient to satisfy this requirement. without charge within 15' calendar days of recer'pt of a debtor's written request for information regarding the debt é‘ 0r proof of the debt, If the debt buyer cannot provide the information or documents within 15 calendar days, the ; debt buyer shall cease all collection of the debt until the debt buyer provides the debtor the information or 3 documents described in subdivisions (a) and (b) Except as provided otherwise in this title, me request by the 3 debtor shall be consistent with the validation requirements contained in Section 16929 o! Title 15 or‘ the United ! States Code. A debt buyer shalt pmw’de ail debtors with whom It has contact with an active pasta! address and an acn've email address to which these requests can be sent. A debt buyer may also provide an active email address lo which these requests can be sent and from which information and documents can be delivered, if the parties i i i 5 I g E (c) A debt buyer shall provide the inmrmation or documents identified in subdivisions (a) and (b) lo me debtor E i ( x a’ f agree. 4 5 (d) (1) A debt buyer shall include with (:5 firs! written communicatmn with the debtor in no smaller than JE-poz‘nt 3 type, a separate prominent notice that provides: j "You may request records showing me fol/owmg: (1) that {insert name of debt buyer] has the right to seek g collection of the debt; (2) the debt balance, inciudmy any additionai fees and charges; (3) the date of default or i the date of the last payment; (4) the name of the creditor and the account number associated with the debt; (5) the name and last known addmss of the debtor as i! appeared in (he creditor’s or debt buyer‘s records prior to the sale of (he debt, as appmpriate; (6) me names of all persons or entities that have purchased the debt, You may also request from us a copy of the centract or Other document evidencing your agreement to the debt."A request for these records may be addressed to: {insen debt buyer’s active mailing addmssj. ” (2) When collecting on a time~baned debt where the debt is nor past {he date for obso/sscence provfided for in Section 605(5) of the Fair Credit Reporting Act (15 U,S.C. Sec 1581c); "The law limits how long you can be sued on a debt. Because oi the age of your debt, we Wm not sue you for it. 1/ you do not pay the debt, [insert name of deb! buyer} may [continue to] reporf it to the credit reporting agencies _§ | i 3 I § i i i ¥ as unpaid. " 3' i i {3) When collecting on a time-barzea’ debt where the debt is past the date for absolescence provided {or m Section 605(5) of me Fair Credit Reporting Ac: (15 U.S.C. Sec. 1681c}: , 29 rhttp:#leginfo.legistature.ca.gov/faces/bill‘s/crsionsCompareCIiemxhtmflbilimidr-QO1 1201 20... 2/9/20} 7 ,A Fags 3 0ft) “The Iaw limits haw fang you can be sued on a debt. Secause of the age of your debt; we wil/ not sue you for f1, and we will no: report if r0 any credit reporting agency. ” (e) Ii a Ianguage other than English is principally used by the debt buyer in me initial oral contract with the x debtor) a notice shall be provided to the debtor 2n {hat fanguage within five working days. 2 (l) In the event of a conflict between the rewirements of subdivision (d) and federal law, so that i: is K impracticable to comply with both, the requirements of federal Iaw shall prevail. 5 otherwise reduced to writing. The debt buyer shall ensure that a copy of me written agreement is provided to the $ 1 1788.“. (a) Ali settlement agreements between a debt buyer and a debwr shall be documented m open court or t > debtor, I(b) A debt buyer rhat receives payment on a debt shall pravide, within 30 calendar days, a receipt or monthly i statement, to the debtor. The receipt 0r statement she” c/eaHy and conspicuously show the amount and datepaid, the name of the entity paid, the current account number, the name of the charge‘ofl' creditor, the amountnumber issued by the charge-off cred/tor, and the remaining balance owing, If any. 77:2 receipt or statement maybe praw‘ded electronica/Iy if the parties agree. g (c) A debt buyer that accepts a payment as payment in furl, or as a full and final compromise of the debt, shallIf provide, within 30 calendar days, a final statement that complies with subdivision (b) A debt buyer shall not set! i an interest in a mso/ved debt, or any persona! or financial information related to the resolved debt 5 l i i t i i 1788.55. A debt buyer shall not bring 5w": or initiate an arbitration 0r other legal proceeding to cofiect a consumerdebt If the applicable stature of Iim/tations on the debt buyer’s claim has expired. 1786.58. 1n an action brought by a debt buyer an a consumer debt: (a) The complain: shai! alfege all cf the following: (J) 77m: the plaintiff is a debt buyer. ( j (2) The nature of the underlying debt and the consumer transaction or transactions from which R Is den’ved, )‘n aJ shon‘ and plain statement. K s l I § 2 (3) Thar the debt buyer is the sole owner of the debt at issue, or has authon‘ty to assen’ the right: of all owners of i the debt. (4) The debt balance a: charge off and an explanavon c! the amount, nature, and reason far elf posf-Clya/ge«off. fees and charyes, impased by the charyemfir creditor or any subsequent purchaser of the debt. This paragraphI shall noz be deemed to require a specific :temization of each charge! E l {5) The date of defaui? or the date of the /ast payment. , (6) The name and an address of the chargaofi creditor at the {Ame of charge off, and the charge-off creditor’saccount number assocratea with the debt. 77:9 charge~off C(edz‘mr‘s name and address shall! be in sufficient formso as to reasonabiy Identify it, (7) The name and last known address of the debtor as they appeared in the creditor’s records prior :o the saie ofthe debt. If the debt was sold prior (a January 1, 2013, the debtor’s name and last known addmss as theyappeared in the debt owner’s records on December 33, 2012, shall be sufficiem. “N The names and addresses or 5!! persons or entitles that purchased the debt after charge off, i'nc-Iudmg the (V/ pla/nufi debt buyer. The names and addresses of these persons or entities shall be m suffic/en: form so as toreasonab/y fdent/‘fy them. (9) That me debt buyer has tomph’ed mm Section 2788.52. (b) The document dsso-ibed in subdivision (b) o! Section 1788,52, shat! be attacheo to the complaint (c) The requirements of this title she}! nor be deemed to require the disclosure in public records of personal,financial, or medicaf infm'maz/‘on, the privacy of which {s protected by any state or federa! law. 1788.60. {a} In an action initiated by a debt buyer, no default or other judgment may be entered agafnsr a debts!unless business records, authenn’wred through a sworn decimation, are submitted by the debt buyer r0 the court _ 5C) ~ httpzx‘fleginfo.)egislature.ca.gov/faces/biIIVersionsCompareClient.xhtml?biIlfiid=26I 120120. .. 2/9/20} 7 Page 4 0f6 to establish the facts required m bc- aileged by paragraphs (3,1 (o (8), fnc/usfve, o! Subdivision {a} of Section 1788.581 ‘ 1 (b) No default or omer judgment may be entered against a debtor unle55 a copy of Me document described in subdivision (b) of Section 1 788,52, authenticated through a sworn declézatian, has been submitted by the debt buyer (o the caurt. (c) 1n any action on a consumer debt, if a debt buyer plaintiff seeks a default judgment and has not compiled with the requirements of {hfs title, the cow? shali nor enter a default judgment for the plaintiff and max m its discretion, dismiss me action 1788.62. (a) A debt buyer that violates any provision of this title with respect to any person snail be liable to tha! person m an amount equal to the sum of the following: E (J) Any actual damages sustained by that person as a result of the vzotation, including, but not limited ro, the amount of any judgment obtained by the debt buyer as a remit of a time-barred suit to collect a debt from thaé person. {2) Starutow damages in an amount as the court may allow, which shall not be fess than une hundred doliars ($100) nor greater than one thousand dollars ($1,000) per violation. (b) In the case of a class action, a deb: buyer mat violates any provision of this title shall be liable for any statutory damages for each named plaintiff as provided in paragraph (2) of subdivision (a). If the court finds that ; the debt buyer engaged in a pattern and practice of violating any provision of this title, me court mey award i additions! damages to the class m an amount not to exceed me lesser of five hundred thousand dollars {$500,000} 0r 1 percent of the net worth of rhe debt buyer. é (c) (J) In the case of any successful action {a enforce (iability under this section, the court shall award costs of the action, together with reasonable attorney’s fees as determined by the court. (2) Reasonab/e attorney’s fees may be awarded to a prevailing debt buyer upon a finding by the court that the _; piaintiff’s prosemtian of the action was not in good faith. (d) 1n determining Me amoum ot'riabilicy under subdivision (b), the court sha/l consia‘en among other relevant factors, the frequency and persistence of nancempliance by the debt buyer, the nature of the noncompliance, me resources of the debt Ouyer, and the number of persons adversary affected, (e)A debt buyer shall have no civil liability under this section if the debt buyer shows by a preponderance o!“ evidente that the violation was not intentional and resulted from a Dona fide error, and occurred notwithstanding the maintenance ofprocedures reasonably adapted to avoid any error. (f) An action to enforce any liability created by (hi5 title shall be brought within one year from the las! violation.(g) Reccvery in an action brought under the Rosenthal Fair Debt Coliection Pram‘ces Act (??(fe 2.6C (commenting z with Semen 1788} or the federa/ Fair Debt Co/Iectfon Practices Act (15 U,S.C. Sec. 1592 e: seq, } shall preciude recovery for the same acts m an action brought under this tide. 1788.64. Any waiver of the provisions of this title is Contrary to public policy, and i5 void and unenforceabie.SEC. 3. Section 58L 5 is added :0 the Code of Civil Procedure, to read: i i E l i f i t i I x I l . ‘ ‘ 581.5. 1/7 a case involving consumer debt, as defined in Section 1788.2 o! the Ciw.’ Code, and as regulated under f Title 1.665 (commencing wit!) Section J 786.50} 0f'Parr 4 of Divisfon 3 of the CM) Code, If the defendant debzorj appears for Mal on the scheduled tria/ date, and the plaintiff deb: buyer either faiig to appear or is not prepared I i ta proceed to man and me court does not find a good cause for continuance, the mun may, in its discretion, f1 dismiss the action with or without prejudice Notwithstanding any other law, in this mstance, me court may award : § the defendant debtor’s costs of preparing for trial, including, but no: limited to, lost wages and transportation [II i ¥ 3 i [ i expenses, SEC. 4. Section 700,010 of the Code ofCiw‘l Procedure 4's amended to read: ,y700.010. (a) At the time of levy pursuant (o this article or prompt!y thereafter, the levying officer sha/I serve a copy of the following on the judgment demon (I ) The writ of executia/L = (2) A notice of levyl c 3/ --htthI/leginfo.iegislature.ca.gov/faces/bilIVersionsComparcClientxhtml?biliwidzm I 1201 20.“ 2/9/20} 7 (3) 1f the judgmem debtor Is a natura! person, a copy of me foam h’sting exemptions prepared by the mama: Council pursuant f0 Subdfvision (c) of Section 681.030, Me fist of exemption amounts published pursuant m \ subdiw‘sion (e) of Section 701350, a copy 0f me form that the judgmem debtor may use to make a claim of exemption pursuant to Section 703.520, and a copy of the form the judgmenz debtor may use r0 provide a financial statement pursuant to Sealer: 703.530. (4) Any affidavit of manual, as defined In Section 6801.35, for names cf ms debtor listed on (he wm’ of execution. (b) Service under Un's secnon shall be made personally or by mail, SEC. 5. Section 706.103 of the Code of Civil Procedure is amended to read: 706403. {a} The Ievying officer shafi serve upon lhe designated employer al! of me following: i (1) The original and 0m: copy of the earnings wa’thho/dmg order. (2) The form for the employer’s return. {3) The notice to empioyee ol‘eamings withholding order. J (4) A copy of me form mat the judgment debtor may use to make a claim of exemption (5) A copy of the form the judgment debtor may use to provide a financial statement. (b) At the time the Ievylng officer makes service pursuant t0 subdivision (a), Me {evying officer shai! provide the emplcyer with a copy of me employer’s instructions referred to in Section 706.122, The Judicial Counci! may é adopt rules prescribing the circumstances when compliance with this subdivision 1‘s not required. Z (c) No earnings withholding order shall be served upon the empioyer after the time spedfied in subdivision {b} of I Section 699530. .FSEC. 6. Section 706A 104‘ of {he Code of Ciw/ Procedure is amended to read: 706.104. Any emplcyer who i5 served with an earnings wirhho/ding order shall: (a) Deliver to (he judgment aebto: a copy of the earnings wzthho/ding order, the notice to empl’oyee of earnings ‘ withho/ding, a copy of the form that the judgment debtor may use to make a claim of exemption, and a copy of Ithe form the judgmen: debwr may use to provide a financial statement within JO days from the date ofsem‘ce. If me judgment debtor 1‘s n0 longer emplayed by the emphyer and the empkzyer does no! owe the empioyee any earnings, (he empioyer is not required to make such delivery. The employer 1‘s not subject m any czw) liabi/ity fior failure to comply wr‘m this subdivision. Nothing in this subdivision limits the power of a caurt to hold the empfoyer {n contempt of coud for {aI/ure Co Comply with this subdivision. (b) Complete the empfoyer’s return on me fOrm provided by the fwymg officer and mall 1: by firsr-dass mad, posiage prepazd, to me fevymg officer within )5 days mam the dare of service. If the earnings wrCh/xoldmg order is ineffective; the employer snail szate in {he employer’s mturn that Me order will not be compiled mm for this reason and shai} return the order to the levyIng officer with the employer; return SEC. 7. Section 706. 208 of the Code of Civil Procedure is amended (o read: 706.108. (a) 3f a writ cf execution has been Issued to {he County where the judgment debior’s employer is m be served and U78 time specified in subdm‘sion (b) of Section 599.530 for levy on pmperzy under me Wm has nor exnired, a judgment crenitor may deliver 5m application for (ssaance of an earnings wr‘thhoidmg order to a ; registered process sewer who may men issue an earnings wr‘mhofamg Order! (b) If me registered process server has issaed the earnings wltmzodding order, the registered pmcess server, y before serving me earnings withholding order, shall deposit with (he Iewmg efficer a copy o! the writ of execution, m8 application fer Issuance of an earnings withholding order, and a copy of the earnings withhofdmg order, and shat! pay the fee provided by Section 26750 of the Governmen! Coast (c) A registered pracess server may serve an earnings wirhnofa'ing order on an employer whether the earm‘ngs wlthhoiding order was Issued by a levying officer or by a regisrered process server, but no earnings withholding order may be saved after the time specified in Subdivision (b) of Section 699.530. 1n performing W's function, the registered precess server shal/ serve upon me designated employer ali of the fotmwmg; ('1) The angina/ and one copy of the earnings withholding order. , 3 2, ’ ‘ httpzf/Eeginfo.legislature.ca.gov/i‘accs/biiIVersionsComparcCliem.xmm1?bilLid==~201 120120“. 2/9/20} 7 (2,) The farm for (he emptoyer’s return, 3(3) ?he notice [o {he employee of me earnings Withholding order. (4) A ccpy of the form that {he judgment debtor may use r0 make a claim of exemption. (’5) A copy 0f the form the judgment debtor may use to pro vide a financiai statement (6) A copy o! (he employer's lnstrud/ons referred to in Section £436,127, except as otherwise prescribed m rules adopted by me Judxcz'a! Council, (d) Within five court days aflcr service under this section, all of the Ib/Jowmg shall be filed with (he Ievying officer: (2) The wn’t of exeCut‘ion, ifit is nor afmady m the hands of the levying officer. ‘ (2) Proof of service on the employer of the papers (isted m subdivision (c), {3) Instructéons in writing, as required by the pmvisions of Section 687.0} 0, (e) If the fee provided by Section 26750 of the Government Code has been paid, the Ievymg officer shall perform atl other duties required by this chapter as if the levying officer had served the earnings wirhhoidmg Order. 1f the registered process server does not comply mm subdivisions (17),. where appiicable, and {d}, the service of theearnings withholding order is ineffective and the {evymg officer is not required to perform any (juries undet theorder and may terminate the order and may reiease any withheld earnings to the judgment debtor. (f) The fee for services of a registEred process server under this section shall be allowed as a :‘ecoverabie cost pursuanf to Section 10335 SEC. 8. Section 706. 122 of rhe Code cf CM! Pracedure 1‘s amended to read: I706.122. The “notice to empioyee of earnings withnoidlng ordEr" shali center?! a statement that informs the employee m simple terms of {he nature of a wage gamisbmenr, the right to an exemption, the procedure for . claiming an exemption! and any other informatfon the Judicial Council determines wouid be useful {c the 'employee and appropriate for inciusion in the notice, including a}! of the following: (a) The named employer has been ordered to withhofd from the earmngs of the judgment debtor me amounts required go be withheld under Section 706050, or such other amoants as are specified in the earnings withhoiding order, and to pay these amounts over to the fevymg officer for transmittat to the person specified In the order in payment of the judgment described m the order. (b) The manner of computing the amounts required to De wiumeld pursuant ta Section 706050. (c) The judgment debtor may be able Io keep more or af/ of the judgment debtor’s earnings {f the judgmenrdebtor proves that the addz'tiona/ earnings are necessary for the support of the judgmant debtor or Me judgment é debtor‘s family supporreo’ in whoie or m pan by the judgment debtor. 3 (d) 1f the judgment debtor wishes a court hearing {o prove the: amounts should not be withheld from the judgment debtor’s eammgs because they are necessary for me support of the judgment debtor or Me judgment debtor’s fam/ly supported in whole or In part by the judgment debtor, the judgment debtor shail file win; melevying officer an original and one copy“ of [he ‘judgment debtor’s claim of exemption" and en originai and onecopy cf the “judgment debtor‘s financial statement “ SEC. 9. The pwvisions of (his act are severablel l! any provision 0f M15 section or Its app/a‘canon is heid invalid, mar inva/idiry shall no: affect other provisions or appficaflons that can be given effect without (he inval/d pmwsion i 0r application. 1 / 3} /httpz/lleginfojegislamre.ca.gov/faces/biIR’ersionsCompareCliem.xhtmi?biElmid=201 E20) 20... 2/9/20} 7 Exhibit E Bil} Analysis (table) Page 2Q Plaintiff‘s Memorandum in Support of Judgment Page l 0H [gm “a _/ M” .m .. (J ~Z'j"(7f‘;’“2m~Mr“ ‘ j LEGXSLATIVE INFORMATIONm ' Home gm gnmrmanon Caiifomia Law Pubiicah’ons t Other Resources My Subscriptions My Favontes 58-233 Debt buying. (2013-20343 5 i i am minis w m H T 2 , W . - h g 5 W W ‘ l . g WWW 2 E l . i ! g 5 «l g WW a J t i 1 i l t i W ’ '1 E ' g A L fl, t J ;L_h_,_,m-,.,._..-..W. .... “..-...._._~.‘.._._.M "...“...m.............................................................................................. / z 5 9 ’ 2/9/20} 7 http://Ieginfo.IegisIaturecagov/faces/bi1%AnaiysisCHentxhtml'Ybi11_id==201 320) 4088233 Exhibit F Senate Banking and Financial Institutions dated 04/15/13 (pages 1-8) nge gig Plaintiff‘s Memorandum in Suppori ofJudgmenz SENATE BANKING & FINANCIAL ?NSTITUTIONS COMMITTEE Senator Lou Correa, Chair 2013-2014 Regular Session SB 233 (Leno and Correa) Hearing Date: April 17, 2013 As Amended: Apri! 1, 2013 Fiscal: No Urgency: No SUMMARY Would enact the Fair Debt Buyers Practices A01, to further reguiate theactiviéies of persons and entities that purchase deimquent or charged-ofi consumerdebt, as specified. DESCRIPTION 1. Wouid define a debt buyerx for purposes ofthe bill. as a person or entity tha: isregufarly engaged in the business of purchasing charged-off consumer loans,consumer creditaccounts, or other definquent consumer debt for coiiectionpurposes, whether it coliects the debt itseif, hires a third party for COUection, orhires an attorney for coHection titigatjon, 2‘ Adebt buym wouid aiso inciude any parent subsidiary, or other affiEiate thatexercises direct comm! over a person or entity that meets the definition of a debtbuyer in Number 1. immediately above 3. Wouéd prohibit a debt buyer from making any written statement to a debtor in anattempt to coliect a consumer debt, unless it possesses the fouowmg information: a. That the debt buyer Es the sole owner ofthe debt at issue orothewvise hasauthority to assert the rights of a?! owners ofthe debt. b. The debt balance at charge off and an expianafion ofthe amount, nature, andreason for ail post-charge off fees and charges imposed by the charge-oficreditor or any subsequent purchasers ofthe debt. c. The date ofdefauft or the date of the East payment by the debtor. d. The name and an address of the charge-off creditor a: the time of charge off,and the charge-off creditor‘s account number associated with the debt e, The name and tast known address Ofme debtor as they appeared m thecharge-off creditor's records prior to the safe ofthe debt. f. The names and addresses of ail persons orentities that purchased the debtafter charge off. , 5/] 10. 71. 12. SB 233 (Leno and Correa), Page 2 Wauld prohibit a debt buyer from making any written statement to a debtor in anattempf to coilect a consumer debt, uniess it has access to a copy ofthe contractor other document ew‘dencing the debtor’s agreement to the debt. Woufd requke a debt buyer to incéude a statement with its first writtencommunfication to a debtor. informing the debtor that he orshe is eiigibfe to requestan of the information listed In Numbers 3 and 4 above. and woutd require the debtbuyer 1o provide that information to a debtor, without charge, within 15 calendardays of receiving a debtor‘s written request for it. Any debt buyer who is unable toprovide the information to a debtor within 15 catendar days must cease an attemptsto collect the debt, untii that debi buyer is abie to provide the information. Wouid provide that, if a ianguage other than Engiish is principaiiy used by a debtbuyer in its initial oral contact with a debtor, the debt buyer must provide thestatement described in Number 5 above to that debtor in that {anguageg asspecified. Would require aii settlement agreements between a debt buyer and a debtor t0 bedocumented in open couri orotherwise reduced to waiting, and wouid require adebt buyer to ensure that a copy of the written agreement is provided to the debtor. Would require debt buyers who receive payment on a debt to provide a writtenreceiptor monthiy statement reflecting that payment (or a final statement reflectingthat payment. ifthe payment is accepted as payment in fun or as a {ma}compromise ofihe debt) to the debtorwithin 30 caiendar days Wousd prohibit a debt buyer from bringing suit or initiating an arbitration or otherEegai proceeding to collect a consumer debiif the applicabfe statute of limitationson the debt buyer’s ciaim has expired. Except as necessary to protect confidential personai, financiai, ormedicaiinformation, would require the complaint m any action brought by a debt buyer on aconsumer debt to aifege the nature ofthe underlying debzand the consumertransaction or transactions from which itis derived, and to inciude a4! oftheinformation iésted in Number 3 above, aiong with a statement that the debt buyercompifed with the provisions ofthe biz! described in Numbers 3 through 6 above,Would further require each complaint to contain a copy of the contract or otherdocument evidencing the debtor‘s agreement to the debt as an attachment to mecomplaint. Wouid provide that no default orother judgment may be entered against a debtor,unless business records, authenticated through a sworn decimation, are submittedby the debt buyer to the court to establish the information that is afleged in thecompiaint, and unless a copy ofme contract orother document evidencing thedebtor’s agreement to the debt, authenticated through a sworn dec£arat§on, hasbeen submitted by the debt buyer to the court. Would provide that, if a debt buyer plaintiff seeks a default judgment and has notcomplied with the provisions ofthe bill, the court may no: enter a defauit judgment “36/ SB 233 (Leno and Correa). Pages for the ptaintiff and may, in its d§scretion, dismiss the action. 13. Woutd provide for afl ofthe fofiowfng, to enfome the provisions ofthis bm: a, A debt buyer who violates the provisions of the bm with respect to a person J'sliabie to that person for actual damages: as specified, pins statutory damagesbetween $100 and $1000 per violation, plus reasonable attorneys’ fees andcosts, as determined by the court . tn the case of a ciass action. a debt buyer who viotates the provisions ofthebili with respect to a ciass Es liable for statutory damages of beMeen $100and $1000 per viotation for each named plaintiff, pius reasonabie attomeys’fees and costs, as determined by the court. . bf, as part of a class action, a court finds that the debt buyer engaged m apattern and practice of viofatmg the bin, the court may award additionaldamages to the class in an amount not to exceed the lesser of $500,000 or1% ofthe net worth of the debtbuyen . Courts are authorized to award reasonabie attorneys' fees and costs to aprevaifmg debt buyer, upon a finding by the 00m that the piaintifi’sprosecution of the action was not in good faith, . A debt buyer has no civii liability under the provisions ofthe bill if itshows, bya preponderance ofthe em‘dence. that its violatfion was not intentionar,resufied from a bona fide error, and occurred notwithstanding themaintenance of procedures reasonabfy adopted to avoid any such error. Wouéd require that any action brought to enforce the provisions ofthe bi}! bebrought within one year from the date ofme last alteged viofatx‘on by the debtbuyer‘ . Would provide that recovery in an action brought under the Rosenthal FairDebt Coiiectjon Practices Act or the federa! Fair Debt Coliects‘on Practices Actpreciudes recovery for the same acts in an action brought under theprovisions ofthis bm. 14, Would provide that any waiver of the provisions of this biil is contrary to public 15. ‘1 . poiicyx and is void and unenforceabie‘ Would amend the Code ofCivH Procedure to aiign the additional informationrequirements of this bin with the requirements that Ievying officers, processservicers, and employers must foliow in connection with wage garnishment. EXISTING FEDERAL LAW Provides for the Fafr Debt Coiiection Practices Act (FDCPA; 15 USC Section1692), whose sta‘ed purposes are to eiiminate abusive practices in the coiiection f 54, SB 233 (Leno and Correa), Page4 of consumer debts, promote fairdebt conection, and provide consumers whh anavenue for disputing and obtaining vafidation of debt information in order to ensurethe information's accuracy, The Act creates guidefines under which debt conectorsmay conduot business, defines rights of consumers invoived with debt conectors.and prescribes penalties and remedies fm viofations of the Act. Responsibih‘ty forenforcing the FDCPA was transferred from the Federal Trade Commission to thefedera! Consumer Financia§ Protection Bureau through the Dodd-Frank Wan StreetReform and Consumer Protection Act. EXISTING STATE LAW 1 . 1 . Provides for the Rosenthai Fair Debt Collection Practices Act (Civié Code Section1788 et seq), whose stated purposes are to prohibit debtcoléectors from engagingin unfair or deceptive acts or practices in the conection of consumer debts and torequire debtors to act fairly in entering into and honoring such debts. The Actprohibits deceptive, dishonest, unfair and unreasonable debt coilection practicesby debt coliectors, and regulates the form and content ofcommunications by debtcofiectors to debtors and others. COMMENTS Purgose: This bill is intended to provide bettef documentation of atieged debts toconsumers who are contacted by debt coflectors, and to reduce the occurrence ofdebt cofiection activities directed toward time~baned debt, or to the wrong person,or both. kt does so by establishing cfear, enforceable standards governing medocumentation required to support the coHection of purchased delinquent orcharged-off debt, particularty in cofiection iitigation. According to the author's office, the debt buying industry has become a significantfocus of public concern related. in part1 to the inadequacy ofdocumentationmaintained by the industry in support of its debt collection activities and litigation.There have been widespread accounts ofdebt buyer coiiection efforts‘ includangconection litigation, against the wrong person, or targeting debtthat is time-barredor has aiready been paid. Conection efforts have become increasingfymisdirected, as consumer debt is soid and resold, repeatedly, without reiiabiedocumentation evidencing its origin Thés bi” is a response to these concerns. Background: According to the federai Consumer Financiai Protection Bureau(CFPB) deb: coirecflon is a muEtE-biiiion dollar industry. During 2012,apprmo'mately 30 ménion individuals nationwide (14% ofAmen'can aduits who havecredit reports) had deb! that was sub}ect to the coliections process. The averageamount of consumer debt held by these consumers was $1.500. In a ruie refeased by the CFPB in October 2012 (see discussion beiow), CFPBdescribed the importance of regufiaténg the conswner debt collection industry. ftnoted that consumer debt collection is important to the functioning of the consumercredit markets; By collecting consumer debt. cokiectors reduce creditors’ tosses ‘ from nora‘repayment and help keep credit accessibfe and more affordable toconsumers. ,w 7’0 w- SB 233 (Leno and Correa)‘ Page 5 However, debt couects‘on performed En mega! ways has the potentiai to causeconsumers substantiai harm, :f conectors faisery represent amounts owed,consumers may pay debts they do not owe, either to stop collection efforts orbecause they are unsure how much they owe, Consumers may aisounintentionafiy yield their rights, by waiving the statute of §imitations on debt cialmsforwhich the relevant timitpen‘ods have expired. “Whether ornot consumers oweand are liable for the debts couectors are attempting to recover, unlawfu! coilectionpractices can cause significant reputational damage, invade personal privacy, andinflict emotions! distress. Among the possibte consequences, a coilector’sinappmpn‘ate interference with a consumer’s emptoyment relationships can aisoimpairthe consumer's ability to repay debts." Aithough federal and state iaws already exist to protect consumers from suchharms, sevefal interested parties, including the Federal Trade Commission andthis biii‘s sponsor, behave that existing law is inadequate, and that more needs tobe done to protect consumers. Discussion: a. Relation to SB 890: The prow‘sions ofthis bin are substantiafly simiiartoprovisions ofSB 890 (Leno), a hm that was extensiveiy debated dun’ng the201 $12 LegislatWe Session, and which was uffimatety amended to reflect acompromise between the author, sponsor, debt buyer, and debt collectorindustries, SB 890 ultimateiy failed passage inthe Assembty Banking &Finance Comméttee, due to oppositéon from the California BankersAssociation. SB 233 builds on the compromise reached !ast year with the debt buyer anddebt coiiector industries. Although complete consensus on the bi}; has not yetbeen reached with the California Bankers Association. the two sides aremuch ctoser than they were iast year, and have tentativeiy agreed to a newdefinition of “debt buyer.“ That agreement is summarized below in theAmendments section. b‘ Recent Federai Action: The Dodd~Frank Wan Street Reform and ConsumerProtection Actgranted CFPB authority to supem’se certaén nonbank personsfor compiiance wéth federal consumer financiai iaw and for other purposes.CFPB has the authority to supervise nonbank covered persons of an sizes mthe residentiaf mortgage, private education tending, and payday lendingmarkets. rt has the authority to supervise nonbank “Iarger participants” inmarkets of other consumer financia! products or services, as the Bureaudefines by rule. Since SB 890 faiied passage on Juty 2, 2012, the CFPB hastaken iwo actions related to the debt coliecfion industry. In October 2012, the CFPB pubfished a Fina! Consumer Debt Coiiection Rufe,defining iarger participants in the context of consumer debt cotiection, andgiving CFPB authority {o undertake supervisory activities with respect to thoseconsumer debtcouectors‘ effective January 2‘ 2013. In its ruie (codified as ,«L/w SB 233 (Leno and Correa), Page 8 12 CFR Part 1090.105), CFPB defined "consumer debt coiiection,” "creditor,”and “debt coiiector," and defined a {arger particépant in the context ofconsumer debtcofiecn‘on as one whose annual receipts reaming fromconsumer debt coiiectéon are more than $10 mikfion. Consistent with its new supervisory authorsty over larger consumer debtconectors, the CFPE issued a manual of examination procedures in October2012‘ for use by CFPB examiners in reviewing the activities of thosecollectors. That examination manual does not impose any new rutes forIargerconsumer debt collectors; instead, itprow’des checkiists for use byCFPB examiners in evaiuafing whether targer consumer debt collectors arecomplying with existing federai law in this area. Staff’s review of the new federat ruies and examination guidelines did notidentify any conflict with what is being proposed in SB 233. There are,however, differences m this bifi’s definition ofa "debt buyer” and the CFPB‘sdefinitéon ofa “debt collector,” which Is likely to mean that the new rufiesproposed by SB 233 win fafi on a somewhat differen! popuiation than rutesthat may be promulgated for iarge debt coliectors in the future by the CFPB. 4, Summagy ofArguments in Suggort: 8. Attorney Genera! Kamala Harris is sponsoring SB 233. The AttorneyGeneral's interest m the area stems from industry practices, which arecausing coilection efforts to be directed toward the wrong consumer, ortoward the cofiection of debt that is time~barred or has been paid. TheAttorney General's concerns are compounded, because a very highpercentage ofdebt coHects‘on litigation result in defaun judgments, whereconsumers do not appear to present whatever defenses may be availabie tothem. SB 233 addresses these concerns in a number ofways, but princépafly byensuring that couection efforts on purchased debtwm be supported byadequate documentation 8y requiring an payments and agreementsassociated with debtto be reduced to wn'tmg, the bifl wiH ensure that nojudgment is entered on purchased debtthat is time barred O(that lacksdocumentary evidence. Consumers Union and the Center for Responsibie Lending write that SB 233is sorely needed. "Tens of thousands of Californians are contacted everyyear by debt buyers they have never done business with, for debts thai maybe old or in an amount that doesn't match the consumer’s memory or records.The debt may even be owed by someone etse or the resuit of identity the ft.Yet. some debt buyers have little more than a robo-signed affidavit to back uptheir ciaims in court." $8233 Wm help consumers and courts determine if theconsumer is, 'm fact, the person who incurred the debt, To ensure fairness inall 0M2 coiiections cases. the bi}! wouid require debtbuyers to show how thedebt was caicutatedx inciuding the original amount and the nature and type ofpost chargecff fees and charges. This is a protection that does not currently ,, #2»! SB 233 (Leno and Correa), Page 7 exist for persons who are sued on a debt. The Public Law Center routineiy sees cases in which low-income andformedy middle-ciass Califomians are victims of unscrupulous deb: buyerpractices. ll observes that coitecfion lawsuits have increased by 20%statewide over the past five years. This marked workioad increase is comingduring a fiscai crisis, when California courts are closing their doors early andcutting staff hours as a result of budget strain. When legisfation similarto SB233 passed in North Carmina. the resuit was a marked drop in the coufis’ civiicaseload. 5. Summagy of Arguments in Oggosifion: None received. 6. Amendments: The author. sponsor. debtbuyer, and debtcofiector industries haveagreed on a series of targely technica£ amendments to the Aprii 15‘ version of thebin. which wilt be offered by the author in Committee. The three most substantivechanges to the bill's language that are contained in those amendments include thefollowing: a. The definition ofa debt buyer wilt now read as follows: 1788.50 (a) "As usedin this title, ‘debt buyer’ means a person orentity that is regularly engaged inthe business of purchasing charged-off consumer debt for coliectionpurposes, whether itcoflects the debt itsefif. hires a third party for collection, orhires an attomey-at-Iaw for collection litigation." ‘The definitéon ofa debt buyer will no longer include “any parent, subsidiary, orother affiiiate that exercises direct control over the person or entity describedin subdivision (a)." A definition ofwhat is meant by charged-off debt Wm be added to the bin.Language to reflect this definition was not avaiiabie atthe time thisCommittee anaiysis was prepared, Staff understands that this definitionrepresents the final point of contention between the Catifomia BankersAssociation and this bili's sponsor. Language win be added, which appiées the bm to debt buyers with respect toafl charged-off consumer debtsoid or resoid on or after January 1, 2014, The words "per violation” wifi be deleted from the provision of the bi?! thatauthorEZes courts to award statutory damages to persons who prevail in anaction against a debtbuyer for a violation of the bin. This has the effect ofawarding statutory damages ofbetween $100 and $100 per action, ratherthan pervioiation. 7. Priorand Reiated Legislation: a. SB 890 (Leno), 2011-12 Legislative Session: The fina¥ version OfSB 890 issubstantially similarto the current version of SB 233. Faiied passage in theAssembly Banking & Finance Committee. r LB' SB 233 {Leno and Correa): Page 8 LIST OF REGISTERED SUPPORT/OPPOSITION Suggort Attorney Generai Kamala Ham‘s (sponsor)AARP Center for Reaponsible Lending Consumers Um‘on Pubric Law Center Oggosition None received Consuftant: Eiieen Newhal! (916) 65i-4102 Exhibit G Senate floor Anaiyses dated 05/1 7/13 (pages 1-8}. / Page gs Plaintiff’s Memorandum in Suppofi ofJudgmem Ia L» w SENATE RULES COATIVQTTEE SB »Office of Senate F&oor Analys es 1020 N Street, Suite 524 (916) 651-1520 Fax: (916) 3274478 TEHRD READING Bil} N0: SB 233 Author: Leno (D), er a}. Amended: 5/1 5/13 Vote: 21 SENATE BANKING & FINANCLAL INSTITUTIONS COMM: 8-0, 4/17/13AYES: Comm, Berryhil}, Beau, Calderon, Camemflifl, Hueso, RothNO VOTE RECORDED: Walters SENATE JUDICIARY COMMITTEE: 6-0, 5/7/13AYES: Evans, Anderson, Corbett, Jackson, Leno, MonningNO VOTE RECORDED: WaltersM M A. W SUBJECT: Debt buying SOURCE: Attorney Genera} Kamala Harris DIGEST: This bfi} enacts the Fair Debt Buying Practices Act, to further reguiaiethe activities ofpersons and entities that purchase “charged-off consumer debt,” asdefined. Senate Floor Amendments 01‘5i‘15l13 add coauthors, define “chargechoffconsumerdebt,” and add intent language. ANALYSIS: Existing federal law provides for the Fair Debt Collection PracticesAct (FDCPA), Whose stated purposes are to efiminate abusive practices in thecollection 0f consumer debts, promote fair debt coflection, and provide consumerswith an avenue far disputing and obtaining validation ofdebt information in orderto ensure the infomation's accuracy The FDCPA creates guideiines under wifichdebt colicctors may conductbusiness, defines rights Ofconsumers involved Mthdebt collectors, and prescribes penakies and remedies for violations of FDCPA. L CONTINUED, /(€ , SB23 Page U.) M Responsibility for enforcing the FDCPA was transferred fi‘om the Federa) TradeCommission (FTCMO the federal Consumer Financial Protection Bureau throughthe Dodd-Frank Wall Street Reform and Consumer Protection Act. Existing state law provides for the Rosenthai Fair Debt Collection Practices Act,whose stared purposes are. to prohibit debt collectors fiom engaging in unfair ordeceptive acts or practices in the collection ofconsumer debts and to requiredebtors to act faifly in entering into and honoring such debis. The Act prohibitsdeceptive, dishonest, unfair and unreasonable debt collection practices by debtcollectors, and regulates the form and content of commurfications by debtcofiectors to debtors and others. This bill: 1. Establishes the Fair Dabt Buying Practices Act t0 regulate the activities ofaperson or entity (debt buyer) that has bought charged-ofl” consumer debt forco Hection pinposes. 2. Defines the followmg terms: A._ “Debt buyer,” as a personor entity that is regularly engaged in the businessofpurchasing charged-ofi” consumer debt for collection pmposes, whetherit cofiects the debt itself, hires a third pafly for collection, or hires ananomey for collection litigation. It does not mean a person or entity thatacquires a charged-off consumerdebt incidental to the purchase Ufaportfolio predominantly consisting ofconsumer dsbtthat has not beencharged off. B. “Chargetbofi” consumer debt” as a consumer debtthat has been removedfrom a creditor’s books as an asset and treated as a loss 0r expense. 3, Applies the provisions ofthis bill t0 consumer debtsold or resold on 0r afterJanuaxy I, 2014. 4. Prohibits a debt buyer from making any written statement to a debtor in anattempt t0 collect a consumer debt, unless it possesses the foflowmginformation: A. That the debt buyer is the sole owner ofthe debt at issue 0r otherwise hasauthority to assen the rights of all owners ofthe debt. « 477’ CONTINUED SB 233 Page3 B. The debt balance at charge offand an explanation 0fthe amount, nature,and reason for all post-charge offinterest and fees, if any, imposed by thechargekoff creditor or any subsequentpurchasers ofthe debt A specificitemization is notrequirexi, but the explanation shaH identify separately thechargeroff balance, the fotal ofany post-charge-offinterest, and the 101a) ofany posI-charge~offfees, C. The date of default or the date ofthe last payment by the debtor. D. The name and an address ofthe chargaoff creditor at the time of chargeoff, and the chargeuoff creditor’s account number associated with the debt. E. The name and last known address ofthe debtoras they appeared in thecharge-off creditor’s records prior t0 the sale OfIhe debt. F. The names and addresses ofall persons or entities that purchasedthe debtafier charge off, including the debt buyer making the written statement. 5. Prohibits a debi buyer from making any written statement 10 a debtor in anattempt to collect a consumer debt, uniess it has access to a copy ofthecontract 0r other document avid encing the debtor’s agreement to the debt. 6. Requires a debt buyer to include a statement with its first writtencommunication to a debtorin no smaller than 12-point type, a separateprominent notice Manning the debtortha‘z he/she is eligible to request a1} ofthe infonnation fisted in #4 and #5 above, and requires the. debt buyer toprovide that information to a debtor, without charge, within 15 calendar daysofrecefving a debtor’s written request for it. Any debt buyer who is unable Ioprovide the information to a debtor within 15 calendar days must cease allattempts t0 collect the debt, until that debt buyer is able to provide theinf‘onnaiion‘ 7. Provides that, if a language other than English is principally used bya debtbuyer in its initiai oral contact with a debtor, the debtbuyer must provide thestatement described in #6 above to that debtor in that language, as specified. 8. Requires a1} settlement agreements between a debt buyer and a debiorzo bedocumented in open 001m or otherwise reduced to waiting, and requires a debtbuyer to ensure that a cepy of the written agreement is provided to the debtor. CONTINUED ,qu « 10. 1]. 14. SB 233 Page 4 Requires debt buyers who receive payment on a debt to provide a writtenreceipt or montlfly statement reflecting that payment (or a final statementreflecting that payment, if the payment is accepted as payment in full oras afinal compromise ofthe debt) To the debtor within 3O calendar days. Prohlbits a debt buyer fi‘om bringing suit or initiating an arbitration or otherlegal proceeding to collect a consumer debt ifthe applicable statute oflimitations onthe debt buyer’s claim has expired. Except as necessary t0 protect confidential personal, financial, or medica}infomation, requires the complaint in an action brought by a debt buyer 0n aconsumer debt to allege the nature of the underlying debtand the consumertransaction(s) from which it 1's derived, and to include all ofthe informationlisted in #4 above, along with a statement that the. debt buyer complied With theprovisions ofthe bill described in #4 through #7 above‘ Requires eachcomplaint to contain a copy ofthe contract or other document evidencing thedebtor’s agreement to the debt as an attachment to the. complaint. Provides that no default 0r otherjudgment may be entered against a debtor,unless business records, authenticated through a sworn declaration, aresubmitted by the debt buyer to the court to establish the information that isalleged in the complaint, and mfiess a copy ofthe contract or other documentevidencing the debtor’s agreement 10 the debt, authenticated through a swomdeclaration, has been submitted by the debt buyer t0 the court. Provides that, if a debt buyer pJaintifl‘ seeks a default judgnent and has norcomplied with the provisions of the bi}; the coufi may n01 enter a defauhjudgment for the plaintiff and may, in its discretion, dismiss the actfion. Provides for a1} ofthe following, {0 enforce the provisions of this bill: A. In the case ofan action brough: by an individuafls), a debt buyer whoviolates the provisions ofths bill with respectto a person is liable to rhea:person for actual damages, as specified, plus statutory damages between$100 and $1,000, plus reasonable attorneys” fees and costs, as determinedby the com. B. In tha case of a class action, a debt‘buyer who violates the provisions ofthebill with respect to a class is iiable for statutory damages ofbefween $100and $1,000 for each named plaintiff, plus reasonable aflomeys’ fees andcosts, as determined by the com. .., Li?- CONTINUED LL)SB 23 Page 5 C‘ If, as pan ofa class action, a com finds {hat the debt buyer engaged in apattern and practice officiating this bifl, the court may award additionaldamages to the class in an amount not to Exceed the lesser of $500,000 0r1% ofthe net worth ofthe debt buyer. D. Courts are authorized to award reasonable attomeys’ fees and costs to aprevailing debt buyer, upon a finding by the com that the plaintifi‘sprosecution ofthe action was not in good faith. E. A debt buyer has no civil fiabélity under the provisions efthe bill if itshows, by a preponderance ofthe evidence, that its violation was notintentional, resulted fiom a bona fide error, and occurred notwithstahdingthe maintenance Ofprocedures reasonably adopted to avoid any such e110)”. F. Requires that any action brought to enforce the provisions 0fthe bil} bebrought withhl one year fiom the, dais ofthe last violation by the debtbuyer. G. Provides that recovery in an action brought under the Rosenthal Fair DebtCollection Practices Act orthe FDCPA precludes recovery for the sameacts in an action brought under the provisions ofthis bill. 15. Provides that any waiver ofthe provisions ofthis bill is contrarylo publicpolicy, and is void and unenforceable. 16. Amends the Codeof Civil Procedurezo align the additional infomlatienrequirements 0fthis bill with the requirements that levying officers, processservicers, and employers must follow in connection with wage garnishment. 17. States legislative findings, declarations, and intent relating t0 the collecfion andlitigation ofconsmner debt. Backgomd During 201,2, approximately 3O million individuais nationwide (14% ofAmericanadults who have credit reports) had debtthat was subject to the collections process.The average amount ofconsumer debtheld by these consumers was SLSOO. Debt buyers are companies that purchase delinquent 0r charged-off debts fiom acreditor for a fiaction ofthe face value ofthe debt. Those companies have become CONTINUED ., 50 SB L33 Page 6 subject t0 increased scrutiny due to numerous compiaints on behalf ofconsumers.FTC issued a report in July 2010 examining debt collection litigation andarbitration proceedings that concluded the “system for resolving consumer debtcoflection disputes is broken” and recommended significant reforms. (RepairingaBroken System (July 2010)) In a rule released by the federal Consumer Financial Protection Bureau (CFPB)inOctober2012, CFPB described the importance ofreguiating the consumer debtcollection industry. It noted that consumer debt collection is important t0 thefimctiom'ng OfIhe consumer credit markets. By collecting consumer debt,collectors reduce creditors’ losses from non~repayment and help kesp creditaccessible and more affordable to consumers. However, debt collection performed in illegal ways has the potential t0 causeconsumers substantial harm. If collectors falsely represent amounts owed,consumers may pay debts they do not owe, either to stop collection efforts orbecause they are unsure howmuch they owe. Cons umers may also unimentionaliyyield {heir rights, by waiving the statute ofh'mitations on debt ciaims for which thereievant limit periods have expired. “Whether 0r not consumers owe and are liableforthe debts collectors are attempting to recover, unlawful collection practices cancause sigliflcant rcputational damage, invade personal privacy, and inflictemotiona} distress. Among the possibleconsequences, a collector’s inappropriateinterference With a consumer’s empioymem relationships can also impair theconsumer’ s abih'ty u) repay debts.” Although federal and state laws aimady exist Io protectconsumers fiom suchharms, severa} haterested parties, including FTC. and this bill’s sponsor, believe thatexisting law is inadequate, and that more. needs to be done to protect consumers.W According to the author’s office? the debt buying industry has become a significantfocus ofpubh'c concern, related, in pan, to the inadequacy ofdocumemafionmaintained by the industry in support ofits debt collection activities and litigation.There have been widespread accounts ofdebt buyer collection efforts, includingcollection litigation, against the wrong person, ortargeting debt that is time~banedor has ake-ady been paid. Collection efforts have become increasingly misdirected,as consumer debt is sold and resoid, repeatedly, without reliable documentationevidenc ing its origin. f CONTINUED M :3 / v J SB 233 Page 7 This bill is intended 10 provide better documentation of alieged debts to consumerswho are contacted by debt collectors, and to reduce the occurrence ofdebtcollection activities directed toward time~barred debt, orto the wrong person, orboth. It does so by establishing clear, enforceable standards governing thedocumentation required t0 supportthe coflection ofpurchased delinquent orcharged-ofif debt, particularly in collection litigation. FISCALEFFECT: Appropriation: No FiscalCom.: No Local: N0 SUPPORT: (Verified 5/9/13) Attorney Genera] Kamala Hams (source)AARP California State Council 0fthe SEIU Center for Responsible Lending Consumers Union East Bay Community Law Center Encore Capital Group Public Law Center ofOrange County ARGUMENTSIN SUPPORT: The Attorney Generai’s interest in the areastems from industry practices, which are causing cofiection efi‘orts to be directedtoward the wrong consumer, or toward the collection ofdebt that is time-barred orhas been paid. The Attorney General’s concerns are compounded, because a veryhigh percentage 0f debtcoBeC-tion litigation result in default judgments, whereconsumers do not appear to present whatever defenses may be available to them. Consumers Union and the Center for Responsible Lending mite that {his bifl issorely needed. “Tens ofthousands ofCalifomians are. contained every year bydebt buyers they have never done bus iness with, for debts that may be 01d 01' in anamount that doesn’tmatch the. consumer’s memory or records. Thedebt may evenbe owed by someone else or the result of identity thefi. Yei, some debt buyershave little more than a robo-signed affidavh to back up their claims in court.” Thisbill will help consumers and courts determine if the consumer is, in fact, the personwho incurred the debt T0 ensure faimess in ah civil collections cases, this billrequires debt buyers to show how the debt was calculated, inc Ending the originalamount and the nature and type ofpostchargevofi‘fees and charges. This is aprotection that does not currently exist for persons who are sued on a debt. CONTINUED v 32* x MW‘nk 5/1 6/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE w‘skr‘n’r END **fl* 53, Exhibit H Senate Judiciaxy Committee dated 05/06/33 (pagss H2) Page g Plaintiff‘s Memorandum in Support of‘Judgment SENATE JUDICIARY COMMITTEE Senator Noreen Evans, Chair 2013-2014 Regular Session SB 233 (Leno and Correa) A5 Amended Aprii 22, 2013 Hearing Date: May 7, 2013 Fiscal: No Urgency: N0 BCP SUB ECT Debt Buyers DESCRIPTION This b111, the Fair Debt Buying Practices Act, would regulate the activities of a person orentity (debt buyer) that has bought charged-off consumer loans for collection purposes.Specificaily, this bil} would: prohibit a debt buyer from making any written statement in an attempt to collect aconsumer debt unless the debt buyer possesses specified information;require the debt buyer to make that information available t0 the debtor, withoutcharge, upon receiptof a request, within 15 days;require all settlement agreements between a debt buyer and a debtcr to bedocumented in open court 0r otherwise in writing; require a debt buyer who receives a payment on a debt t0 provide a receipt 0rstatement containing certain information; prohibjta debt buyer from im‘tiatirzg a suit to collect a debtiz‘ the statute 0flimitations on the cause of action has expired; require a debt buyer bringing an action on consumer debt to include certaininformation in his or her complaint and prohibitan entry ofjudgment in favor of a plaintiff debt buyer uniess businessrecords, autfiemicated through a swom declaration and proving ownership of thedebt, are submitted by the debt buyer to the court. This bill would provide that a debt buyer who violates the provisions ofthis bill is liablefor specified damages, including costs and reasonable attorney’s fees, but permits adebt buyer to avoid liability far unintentional bona fide errors. This bill would aiso require a Claim of exemption and related financial statement f0 rm,to be provided to a judgmcm debtor by a ievying officer, as specified ,5f (more) SB 233 (Leno and Correa) Page 2 of l2 BACKGROUND Debt buyers are companies that purchase delinquent or charged~0ff debts {10m acreditor for a fraction of the face value of the debt. Those companies have becomesubject. to increased scrutiny due to numerous complaints (m behalf of consumers. TheFederal Trade Commission (FTC) issued a report in July 2010 examining debt collectionlitigation and arbitration proceedings that concluded the ”system for resolvingconsumer debt collection disputes is broken” and recommended significant reforms.(Repairing a Broken System (July 2071 D) Federal Trade Commission [as of May 3, 2013] at p. 1‘.) The FTC furthernoted that: The report finds very few consumers defend or otherwise participate in debtcoilecfion litigation. The Commission therefore recommends state and localgovernments consider making a variety 0f reforms t0 service of process,pleading, and court rules and practices to increase the ability of consumers todefend or otherwise participate in debt conection litigation. The report also findscomplaints and attachments in debt collection cases often’do not provideadequate information for consumers to answer compiaints or for judges to ruieon motions (or defaultjud gment. The FTC therefore recommends that courtsmore n‘gorously apply existing rules t0 require that coilectors provide adequa£einformation and that jurisdictions consider adopting rules mandating sheinformation which must be included in or attached to the complaint. The reportadditionally finds that state statutes of limitan‘ons on filing actions to recuver on r debt are sometimes variable and complex, and generally not understood byconsumers. The Commission suggests that states consider mod ifying their )awsto make it simpler to determine the appiicable statute of limitations, and torequire that collectors provide consumers with important information abouttheir legal rights when collecting debt they know 0r should know is fime-barred.(Id. at p. 2,) Additionally, on October 24, 2012, the federal Consumer Financial ?rotection Bureau(CFPB) published a rule to aflow the agency to federally supervise the larger consumerdebt collectors. The CFPB noted that: Approximatdy 30 miilion Americans have, on average, $1 ,500 0f debt subject tocollection. Debt collectors often report consumers’ collection status t0 the creditbureaus. If they get the information wrong, this can be the difference betweengetting approved or denied for such financial products as a mortgage or a carloan. The consumer debt collection market covered by the rule includes three maintypes 0f debt colEecfion: first, firms that may buy defaulted debt and colieci theproceeds for themselves; second, firms that may collect defaulted debt owned byanother company in retum for a fee; and third, there are debt collection attorneys 5C0 SB 233 (Leno and Correa) Page 3 of 12 that collect through litigatien. A singie company may be involved in any 0r a1} ofthese activities. By expanding the supervision pregram to oversee the nonbanksthat are larger participants in the consumer debt collection market, the Bureauwill now have a window into every stage 0f the process w from the origination ofcredit t0 debt collech‘on. The CFPB’S supervision authority over these entities will begin when the ruletakes effect on January 2, 2813. Under the rule, any firm that has more than $10million in annual receipts from consumer debt collection activities wili be subjectto the CFPB’s supervisory authority. This authority will extend to about 175 debtcollectors, which account for over 6O percent of the indusby’s annual receipts inthe consumer debt collecfion market. (Consumer Financial Protection Bureau 10oversee debt rollecfors (Oct. 24, 2012) Consumer Financial Protection Bureau [as of May 1, 2033].) 1n further reSponse to the above 1'55ues, this bill, sponsored by Attorney General KamalaHarris, seeks to make numerous changes relating to debt buyers, including prohibitinga debt buyer from making a written statement to collect a consumerdebt withoutpossessing specificinfoxmation, requiring a complaint in an actiOn to coiled on aconsumer debt to include specific allegations, and prohibiting a debt buyer frombringing suitif the apph’cable statute 0f h'mitations has expired, This bill was approved by the Senate Committee on Banking & Financial Institutions onApril 17, 2013, by a vote of 8-0, and is similar to SB 890 (Leno, 201]), which wasapproved by this Committee but failed passage in the Assembly Committee on Banking& Finance. CHANGES TO EXISTING LAW 1. Existing federal law generally regulates the collection of debt through, among otherthings, the Fair Debt Collection Practices Act, Fair Credit Reporting Act, and theGramm-Leachfili] ey Act. Existing state law the Rosentha] Fair Debt Collection Practices Act, generallyprohibits deceptive, dishonest, unfair, and unreasonable debt coiIectjon practices bydebt collectors, and regulates the form and content 0f communications by coilectorsto debtors and others. (Civ. Code Sec. 1788 et seq.) This bill would establish the Fair Debt Buying Practices Act and prohibit a debtbuyer from making any written statement to a debtor in an attempt to collects:consumer debt unless the debt buyer possesses the following information:o the debt buyer is the sole owner of the debt or has authority {‘0 assert the rights 0fa1} owners of the debt,- «57’ SB 233 {Leno and Correa) Page 4 0f I2 a the debt balance at charge off and an explanation for a1} posbchmge-off interestrates and fees, if any, imposed by charge~off creditor 0r any subsequentpurchasers of the debt; e the date of default or date of the last payment;e the name and address 0f the Charge-GH creditor at the time 0f charge off, and the.chargeqaff creditor’s account number associated with the debt;n the name and last known address of the debtor as they appeared in the chargeoff creditor’s records prior t0 the sale of the debt; ande the names and addresses of all persons or entities that purchased the debt aftercharge off, including the debt buyer making the wn‘tten statement; This bill wouid prohibita debt buyer from making any written statement to a debtorin an attempt to collect a consumer debt unless the debt buyer has access t0 a copy0f the contract 0r other document evid encing the debtor’s agreement to the debt Hthe claim is based 0n debt for which no signed contract or agreement exists, the debtbuyer shall have access to a copy of a document provided to the debtor while theaccount was active, demonstrating that the debt was incurred by the debtor. This bill wouid require a debtbuyer to provide the information or documentsidentified above t0 the debtor without Charge within 15 calendar days of receipt of adebtor’s written requestfor information regarding the debt or proof of debt If thedebt buyer cannot provide the information or documents within 15 calendar days,the debt buyer shall cease all coilectfion of the debt until the debt buyer provides theinformation or documents. A debt buyer must provide an active postal addjess towhich these requests can be sent, and may provide an active emaii address to whichthese requests can be sent and through which information and documents can bedelivered. This bill woulci require a debt buyer to include a prominent statutory notice with in;first written communication with the debtor that is in no smalier than 1213mm type,as specified. This bill would provide that when a debtbuyer attempts to coiiect on a time-barreddebt Where the debt is not past the date {0r obsolescence, the buyer must provide thefollowing notice: "The law limits haw long you can be sued on a debt Because ofthe age ofyour debt, we will not sue you for it. If you do not pay the debt, [insertname of debt buyer] may {continue to] report it to the credit reporting agencies asunpaid for as long as the law permits this reporting." 1f the debris both fime~barredand past the date for obsoiesccnce, the debtor shall provide the following notice:”The law limits how long you can be sued on a debt. Because of the age of yourdebt, we will not sue you for it, and we win not report it to any credit reportingagency." v.» 3mgw SB 233 (Leno and Carma) Page 5 of 12 This bill would Sta te that if a language other than English is principafly used by the debt buyer in the im'tia} oral contact with the debtor, the above-required notices shall be provided to the debtor in that language within five working days. This bill would require aU settlement agreements between a debt buyer and a debmr to be documented in open court or otherwise reduced to writing, and, the debtbuyer shall ensure that a copy of the mitten agreement is provided to the debtor. This bifl would require a debt buyer that receives payment on a debt to provide, within 3O calendar days, a receipt or monthly statement to the debtor, as specified A debt buyer that accepts a payment as payment in full, or as a fun and finalcompromise 0f the debt, shall provide, within 30 calendar days, a final statement to the debtor. A debt buyer shall not" seli an interest in a resolved debt or any personal 0r financia} information reiated t0 the resolved debt. This bill would prohibit a debt buyer from bringing suit or initiating an arbitration or other Eegal proceeding t0 collect a consumer debfif the applicable statute 0f limitations on the debt buyer's claim has expired. This biii wouéd provide that in an action brought by a debt buyer on a consumer debt, the complaint shall alkege a1} of the following:a that the plaintiff is a debt buyer; the nature 0f the underlying debt and the consumer transaction or transactionsfrom which it is derived, ‘m a short and plain statement;e that the debt buyer is the sole owner of the debt at issue, orhas authority t0assert the rights of all owners 0f the debt;the debt baJance at charge off and an explanation of the amount, nature, andreason for all post~charge~off interest and fees, a5 Specified;e the date 0f defaultor date 0f the last payment;e the name and an address of the charge-off creditor at the time of Charge off, andthe charge-off creditor’s account number associated with the debt;the names and addresses of all persons or entities that purchased the debt after charge off; and c that the debtbuyer has compiied with specified requirements of this bill. k This bill wouid require a copy 0f the contract or other documentthai evidences the debtor's agreement to the debtto be attached to the complaint. This bill wouEd provide that the above requirements shall not be deemed 10 require the disclosure in public records of personal, financial, 0r medical information, the confidentiality of which 1's protected by any state or federal law. This bill would provide that in an action initiated by a debt buyer, n0 default orother judgment may be entered against a debtor unless business records, VJ? / SB 233 (Leno and Correa) Page 6 of 12 authenticated thmu gh a sworn declaration, are su bmitted by the debt buyer to thecourt to establish specified facts required to be alleged in the complaint This bill would prohibita default or other judgment from being entered against adebtor unless a copy of the contract or other document, as specified, authenticatedthrough a sworn dedaration, has been submitted by the debt buyer to the court. This bill wouid provide that in any action on a consumer debt, ifa debt buyerplaintiff seeks a defaultjudgment and has not complied with the aboverequirements, the court shall not enter a defaultjudgment for the plaintiff and may,in its discretion, dismiss the action This bfl} would provide that in the case o£ an action brought by an individual oz‘individuals, a debt buyer that violates any pmvision above with respect to anyperson shall be iiable to that person in an amount equal to a sum 0f: ('1) acma}damages; and (2) statutory damages, which shah not be iess than $100 nor greaterthan $1,000. This bill would provide that, in the case of a class action, a debt buyer that violatesany of the above provisions shall be liable for statutory damages for each plaintiff,and, if the court finds that the debt buyer engages in a pattern and practice ofviolating any provision 0f this bill, the court may award additional damages to theClass 'm an amount not to exceed the iesser 0f$500,000 or one percem of the networth of the debt buyer. This bill would provide that, in the case of any successful action, to enforce liabilityunder this bill, the court shail award the costs of the action, together with reasonabieattomey’s fees as determined by the court. This bill would allow reasonable attomey’s fees t0 be awarded to a prevaiiing debtbuyer upon a finding by the court that the plaintiff’s prosecution 0f the action wasnot in good faith. This bill wouid also provide that a debt buyer shall have n0 Civilliability if the debt buyer shows by a preponderance 0f evidence that the violah‘onWas n02 intentional and resulted from a bona fide enor, and occurrednotwithstanding the maintenance of procedures reasonably adopted to avoid anyBIIOI'. This bill would require an action to enforce any liabih‘ty created by this bill to bebrought within one year from the date of the last violation. This bill would furtherstate that recovexy in an action brought under the ROSenthal Fair Debt CollectionPractices Act shall preclude recovery for the same act's in an action brought underthis bill. This biI} would further provide that in a case involving consumer debt, as regulatedby this bill, if the defendant debtor appears for m'a} on the scheduled tn’al date, and wéOw SB 233 (Leno and Correa) Page 7 of 12 the plaintiff debt buyer either fails to appear or 1's not prepared 1'0 proceed to trial, and the court does not find a good cause for continuance, the court may, in its discretion, dismiss {he action with or without prejudice. The court may also award the defendant debtor’s costs 0f preparing for m‘al, including, bumot limited to, lost wages and transportation expenses. This bil} would additionally define ”debt buyer,” appiy fhe above provisions 10 censumer debt sold or resold on or after january 1, 2014, and make related findings and declarations. 2. Existing law establishes a process for the enforcement of money judgments and requires a levying officer to provide certain documents and information to a judgment debtor and to a designated employer in connection with wagegarnishment. Existing law permits e process server aiso to serve an earnings withholding order on an employer and requires that the process server also serve certain documents at this time. Existing law requires an employer who 1's served with an earnings withholding order to provide Certain documents to an employee who 1's a judgment debtor. (Code Civ. Pros Secs. 700.010; 706.103; 706.104; 706.108; 705.122.) This bill would require, in the circumstances described above; that a copy of the form that the judgment debtor may use to make a claim of exemption and a copy of the form used to provide a financial statement aiso be provided.W 1. Stated need for the bin According t0 the author: [T1118 Federal Trade Commission {(FTC) has stated that}, [flhe system forresolving disputes about consumer debts is broken, and has urged states t0 pass legislation to provide adequate protection {or consumers. The system 1's broken because courts have been swamped with debt collectionlaw suits driven by the growth 0f an industry that buys and sells bundledportfolios 0f consumer debt, and misuses the courts to leverage their collectionefforts. The indusfiy’s practices echo the scandal surrounding the processing 0fdelinquent mortgages. Here, debtbuyers use ”robe signers” who sign affidavits avem'ng that they have reviewed and verified debtors’ records, when they haveoniy reviewed basic, and often incomplete, account statements records orspreadsheets 0n a computer screen, Moreover, because consumer debt is beingbought and sold so frequ ently, and over a period of years, companies are /é/“ SB .233 (Leno and Correa)Page 8 of 12 frequently pursuing the wrong person, or the filing claims that have no lawful basis, Frequently, these debt coiiecfion actions are filed by debt buyers without proof that the debt ever existed. Yet actions proceed t0 judgmentbecause ninetyfive percent of consumers d0 nof respond. to theSe iawsuits ~- many because they do not receive notice -- allowing the debt callec’mr t0 take a defauitjudgment against the consumer and levy against the consumer’s personne! accounts. The Pair Debt Buyers Act would reform the debt collection litiga tion process in a number 0f ways to aid consumers and unburden the courts from costly, unmeritorious litigation. 2. Imglementing the FTC’S recommendations As noted above, the FTC recently released a comprehensive report entitled Repairing A Broken Sysfem: Proteczing Consumers in Deb! Coilectz'on Litigation rmd Arbitration that contained recommendations for reforms similar to those proposed by this bili. aA Comglaints must include detailed information Tm FTC found that complaints filed by debtcouectors to initiate collectionactiens against debtors were lacking. The FTCS report noted that ”[t]he function of debt collectian compIaints in a notice pleading system is t0 provide sufficient information so that: (1) consumers can determine whether to admit or deny the complaintaliegations and assert affirmative defenses in their answers; and (2) judges can determine Whether t0 grant a motion for a more definite statement or enter a default judgment. . . Based on the evidence gathered in comedian with these proceedings, the FTC believes that many debtcollecfioncomplaints do not provide this information to consumers." To address that issue, this bill would, among other things, enhance the complaint so that the debtor has more complete information regarding the debt at issue, and, in tum, is able to respond appropriately to the complaint Specifically, the bin wouid pruvide that in an action brought by a debt buyer cm a consumer debt, the complaint must allege: (1) that the plainfiff 1's a debt buyer; (2) the nature 0f the underlying debt and the transaction from which it 1'5 derived; (3) that the debt buyeris the sole owner 0r has authority to assert the owners rights; (4) the debt balance at charge 0H and the reason for all post- charge-off interest and fees; (5) the date of the last payment; (6) the name and address of the charge-off creditor, and the creditor’s account number; {7) the name and last known address of the debtor as they appear in the chargenoff creditor’s records; and (B) the names and addresses 0f all entities that purchased the debt after charge Off. The complaint must also allege that the debt buyer wégw SB 233 (Leno and Cornea) Page 9 of I 2 complied with this bill’s requirement for debtbuyers to possess specificinformation before making a written statement to a debtor in an attempt tocollect the debt. Regarding the necessity of requiring additional informationfrom debt buyers when they seek to collectupon debt, Consumers Union (CU), in support, contends that ”Mans of thousands of Californians are contacted every year by debtbuyers they have never done business with, for debts that may beold or in an amount that doesn’t match the consumer‘s memory or records. Thedebt may even be owed by someone else or the resultof identity theft. Yet somedebt buyerIs] have little more than a robo-signed affidavit to back up their claims in court.” To address the reported abuses, the detailed complaint requiremenfs would appear to provide consumers with necessary information about the debt for which collection is attempted, and 1'11 tum, aflowthose consumers to file an appropriate answer to the complaint. It 1's important to note that many 0f the compiaints currently filed by some debtbuyers are simply form complaints that provide little, if any, useful informationto the consumer being sued about the underlying debt. Regarding the filingpractices of some of those firms, the New York Times’ OcmberBI, 2010 articleentitled Debt Collectors Face a Hazard: Writer's Cramp reported that 1n some instances, banks are selling account information that 1‘s riddled witherrors. More often, essential background information simply is not acquiredby debt buyers, in large part because that data adds to the price of eachaccount. But court rules state that anyone submitting an affidavit to a courtagainst a debtor must have proof 0f that claim -- proper documentation of adebt’s origins, history and amount. Without that information it is hard to imagine how any company could meetthe legal standard 0f due diligence, particularly while chu ming outthousands and thousands 0f affidavits a week. Analysts say that affidavit-signers at debbbuying companies appear to have little choice but t0 take atface vaiue the few facts typically provided to them -- ofien little more thanbasic account information on a camputer screen. (Sega), Debi Collectors Face aHazard: Wyiier’s Cramp (Oct. 31, 2010) New York Times [as ofMay 3, 2013):) b. Disciosure of information prior to judgments To ensure that the couri has sufficient information about the underlying debt, this bill would prohibit a default or other judgment from being entered against a debtor until the debt buyer submits business records that have been authenticated through sworn declaration and establish specified facts regarding the debt, Specifically,those records must show proper ownership of the debt, the debt balance and reasonfor any post-charge-off fees, date of default 0r last payment, and the name and H é)”, SB 233 (Leno and Correa) Page 10 0f 32 address of the charge~ofi creditor, debtor, And all persons or entities who purchased the debt after charge-off. Furthermore, the debt buyer must also provide a copy of the contract or other document evidencing the debtoz’s agreement to t‘ne debt, authenficated through sworn declaration, prior to entering a default or other judgment against a debtor. As a result, the proposed requirements would appear to emure that the court has relatively detailed inferman'on about the nature and history of the debt 1t should be noted that a large percentage of debt collection actions reportedly result in defaultjudgments. Those judgments am entered in favor of the plaintiff (debt buyer) due to the faiiure of the defendant (consumer) to file a timely response to the complaint. When those consumers fail to respond, there 1's no advocate to raise, 0n their behalf, applicable defenses or challenge the assertions made by the debt buyer‘ The FTC’S report noted concern about the number of default judgments and recommended steps to ”increase consumer pax'ficipationin debtcollecfion litigation to help decrease the prevalence oi defaultjudgments," and noted that "(fin an effort to address this problem in another way, some court systems have adopted measures to encourage judges to apply appropriate and consistent standards - including legal standards and court rules - in deciding whether to grant such judgments.” (Repairing a Broken System (July 201 0) Federal Trade Commission [as of May 3, 20] 3] at p. 20.) The requirements discussed above essentially provide a set of consistent standards for a judge t0 use when granting a defauitjudgment. This bu} would also provide that if a debt buyer seeks a defaultjudgment' and has not complied with the requirement of this bill, the court shall not enter a default judgment and may dismiss the action. Similarly, if a defendant debtor appears for trial and the plaintiff debt buyer fails to appear 0r is not prepared t0 proceed (and there is no good cause for continuance), {he court may dismiss the action and award the defendant debtor’s costs for preparing for trial. c. Statuke of limitations The FTCS report also expressed concern that certain collectors ”regularly sue consumers on timeobarred debts.” That practice 1's exacerbated by the practical reality that many consumers do not defend themselves. against these suits, even when the action would be barred by the statute of limitations. The FTC further asserted that ”[b]ecause an expired statute of limitations is an affirmative defense in most states, cokiectors have no obligation m allege in the compiaint that {he debt is not time~barred, and many collectors do not inciude this information. {f consumers do net defend, there is no one to raise the defense that the debt is time~barred4 Indeed, some judges who participated in the roundtables stated that, even if a debt collection action appears to be fime-barred, it would be / é/A SB 233 (Leno and Correa) Page 11 of 12 improper for courts to consider affixmative defenses that no party had raised. As a result, some courts appear to be granting defaultjudgments on fime-barred debt.” (Repairing a Broken System (July 2010) Federal Trade Commission [as of May 3, 2013} at p. 80.) 'f’his bili would address those issues by, among other things, prohibiting a debt buyer from bringing suitor initiat'ng an arbitration or other legai proceeding to collecta consumer debtif the applicable statute oflimitations has expired, and requiring a debt buyer to notify a debtor if a debt is time~barred Regarding the need to address the issue offime~baned debts, the Attorney Generai, sponsor, assertsz' industry practices have become a significant focus of publicconcern due to collectionefforts being directed to the wrong consumer, or seeking thecoliecfion of debt that is time barred or has been paid. These concems are compounded because a very high percentage of debt collectionlitigationresults in defaultjudgmems where consumers do not appear to presentwhatever defenses may be available to them. 3. Addjfional limitations on debt Collection This bill WQuId additionally prohibit a debt buyer from making a written statement to a debtor in an attempt to collecta consumer debtunless the debt buyer possesses specific documentation regarding the debt The debt buyer must make that information available, without charge, to the debtor within 15 caiendar days of receiptof a request H the debt buyer cannot provide the information within that time frame, the debt buyermust cease a1! collection of the debt unfi] the information is provided. 1n suppox'tof the documentation requirements, AARP mates that ”[tlhe elderly are disproportionately vicfims of identity theft and are thus often targeted with lawsuits for debts they never obtained or authorized. . . ‘ This legislation will provide cm cia} protections to ensure that the senior will not be subjected t0 this type of unwarranted harassment, requiring that debtbuyers have essential information abouta debt before they try t0 collect the debt and that the information be shared with the consumer (m request” . 3’ 4. Remedies This bill would provide specific penaities and damages against a debt buyer who violates the above requirements. Specifically, the debt buyer would be Eiable t0 the consumer in an amount equai to the actual damages plus statutory damages(between $100 and $1000 per violation per person), and also would allow aprevailing debtor to receive reasonable attorney’s fees and costs. This bill would /45« SB 233 (Leno and Correa)Page 12 0f 22 also provide that in any Class action where a court finds that the debt buyer engaged in a pattern and practice of violating this bill, the court may award additiona} damages ‘m an amount not t0 exceed the lesser 0f $500,000 0r one percent of the net worth of the debt buyer. It should be noted that this bill wouid aiso limit the liability of debt buyers if the buyer shows that the violation was not intentional and resulted from a bona fide cnor, and occurred notwifixstanding the maintenance of procedures reasonably adopted to avoid any error. . That safe harbor provision would appear to shield debt buyers from liability in cases where the error was truly inadvertent. 5‘ Claim of exemgfion Under existing law, a judgment debtor can claim that his 0r her property or money is exempt from collection efforts. Those daims may be filed with the levying ofificer within 10 days after the date the notice of levy was served on the judgment debtor, and must include a financial statement, (Code C‘iv. Proc. Secs. 703.520, 703.530.) Tc) facilitate exemptions, this bill would require the levying officer enforcing a money judgmentto also provide a copy of the forms that the judgment debtor may use to make a ciaim of exemption and provide a financial statement, as specified. Supgort: AARP; Center for Responsibie Lending; Consumers Union; East Bay Community Law Center; Encore Capitai Group; Puinc Law Center Oggosition: None Known HISTORY Source: Attorney Genera} Kamaia Harris Related Pending Leg'isiation: SB 702 (Anderson) would require applications for default judgment t0 contain specified information This bin 1's set for hearing in this Committee on May 7, 2013. Prior Legislation: SB 890 (Lem), 2011} See Background. Prior Vote: Senate Committee on Banking & Financia} Instituh‘ons (Ayes 8, Noes 0) *Bfiéfifiifi‘fiflfi'firfl‘affl- /éé,w
