If you are a debt buyer, effective October 1, 2013, you will need a debt collection license to collect in Washington.
The current definition of a “collection agency” under the Washington Collection Agency Act does not specifically reference debt buyers.  Therefore, it has been a widely accepted practice for debt buyers to collect debts from Washington consumers without obtaining a license.  

The new law requires debt buyers to be licensed as a “collection agency.”  Specifically, the amendment revises the definition of “collection agency” to include “any person or entity that is engaged in the business of purchasing delinquent or charged off claims for collection purposes whether it collects the claims itself or hires a third party for collection or an attorney for litigation in order to collect such claims.”   Rev. Code Wash. Ann. § 19.16.100(2)(d)  (amended by Sub. H.B. 1822 § 1, eff. 10-1-13). In addition to having to obtain a license, debt buyers will also have to comply with Washington state collection practices and regulations.  .  Those requirements affect recordkeeping, accounting and written disclosure requirements. For example, a debt buyer will have to provide debtors with an itemization that includes the interest or service charge, collection costs, or late payment charges, if any, added to the original obligation by the original creditor.

The amendment also makes clear that no lawsuit can be maintained or judgment entered on behalf of a collection agency on a purchased debt claim without alleging and proving the agency is properly licensed. Rev. Code Wash. Ann. § 19.16.260.

Don’t wait until October to think about getting a license. Give us a call and let us walk you through the new licensure requirements for debt buyers. 

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