After receiving hundreds of consumer complaints regarding questionable debt collection companies, Oregon’s legislature has passed a bill that gives the state attorney general new authority to sue any U.S. debt collection agency engaged in unjust collection tactics with an Oregon resident, InsideARM reports (“Oregon Passes Bill Allowing State AG to Sue Debt Collection Agencies,” April 6, 2009).

The bill, which was sanctioned by current attorney general, John Kroger, will allow the attorney general’s office to address Oregon residents’ repeated complaints that collectors were calling them in the middle of the night, harassing them at work, threatening them with arrests, and using racial epithets in their calls.

“All of these [practices] are unlawful under the Unlawful Debt Collection Practices Act [sic]; however the state had no power to enforce it on behalf of the injured consumer,” said Tony Green, spokesman for the Oregon Department of Justice.

Senate Bill 328 gives the state’s attorney general authority where it formerly didn’t exist. Prior to the bill, Oregon’s attorney general could only request that collection agencies comply with fair debt collection practices under the Unlawful Trade Protection Act, Green said. However, a loophole in the UTPA essentially exempted collection agencies from the act, even though the act applied to many other industries in the state.

If the governor signs the bill into law the UTPA loophole will be closed, giving Oregon’s attorney general the needed authority to prosecute collectors who violate the law beginning Jan. 1, 2010.

Critics Question Effectiveness of Bill

Some collection agency representatives have said the bill won’t likely affect them and that it will do little to stop illegal collection tactics.

And David Cherner, the legislative director of state government affairs at ACA International, an association of credit and collection professionals, said the bill may not live up to legislators’ expectations.

“I’m not convinced that this type of authority that’s now given to the [attorney general] is going to result in complaints decreasing,” he said. “I think there are other ways to address the rise in complaints, and unfortunately I don’t believe that this proposal is going to necessarily do that.”

Industry insiders, including collection agency owners, tend to agree with Cherner’s assessment.

“The bill is not going to give [the Oregon attorney general] the power to take away unlawful debt collectors’ licenses in the state of Oregon to stop them from continued operation,” one owner said. “[The attorney general] hasn’t accomplished anything.”

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