I was surprised to learn that one of the most vocal advocates for reform of the collection industry is (drum roll please), Bill Bartman of CFS! You remember Bill, right? Bill was the President and co-owner of CFS, a Tulsa-based debt-collection company that literally pioneered the practice of bundling bad debt and selling bonds based on that debt. At it’s peak, CFS employed about 3,900 people but ran into financial problems in 1998 when allegations of inflated collection rates and sales of bad accounts to a firm controlled by a CFS executive emerged. The company filed for bankruptcy and ceased operations in 1999.
Now, at the same time he is starting up CFS II, Bill has set up a website www.stopthesecriminals.com in which he proposes stricter measures for debt collectors to do business. He claims that that he has “resolved 4.5 million consumer credit card cases without filing a single lawsuit,” a surprising accomplishment if true seeing as I see as many as 300 lawsuits filed per week in Tulsa County by debt collectors alone.
On Monday, Oklahoma Senator Gary Stanislawski (Senate District 35) introduced Senate Bill 1430, the “Bartmann Bill for Ethical Debt Collection.” The complete bill as introduced can be downloaded here. Over the next few days Paramount Law will be reviewing the text of the bill and reporting on how much a difference the bill would make on curbing debt collection abuse if voted into law in Oklahoma.
I have to admit that we are somewhat skeptical about the bill, even prior to fully reading it. Other industries have been known to introduce legislation that appears to impose stricter measures when the practical reality is that the proposed legislation creates greater hurdles for the consumer. One example of this is the Homeowner Construction Defect Protection Act which (fortunately) failed to become law after lobbied for by the Oklahoma residential home construction industry. SB 431 was the result of the homebuilding special interest lobby. The proposed legislation created biased rules of evidence against homeowners and added red-tape to the wronged homeowners fight. Fortunately for Oklahomans, on May 25, 2005, then Oklahoma Governor Brad Henry vetoed builder-sponsored SB 431. In his veto message, Henry said the legislation “places substantial requirements on the consumer and unduly restricts the consumer’s rights when there are construction defects. It may necessitate that the consumer consult with an attorney when attempting to resolve a construction defect.” However, just one year later, Oklahoma became the 29th state to enact an Opportunity to Repair Law. Again disguised as consumer protection, this law now creates another level of red tape for the consumer to wade through prior to seeking recourse against bad builders in the courts.
Stay tuned for our take on whether the Bartmann Bill is industry-sponsored protectionism or an actual consumer protection bill.