Washington State has enacted SB 5720, a law establishing new requirements for information included in consumer debt collection lawsuits. The legislation requires specific details to help courts verify the identity of the defendant and the amount of the debt.Â
Requirements Under SB 5720Â
According to the Uniform Law Commission, SB 5720 requires that consumers be provided with information necessary to understand claims asserted against them and to identify potential defenses. The law also includes provisions that:Â
- Notify consumers of the consequences of failing to respond to a lawsuitÂ
- Provide information about available legal assistance and settlement optionsÂ
- Establish a standardized process for courts to evaluate default judgment claimsÂ
The legislation expands on prior protections enacted in 2020 related to debt buyers. Under SB 5720, those requirements are extended to all holders of purchased debt and their affiliates.Â
The law also introduces new disclosure requirements in all consumer debt collection actions and establishes remedies when those requirements are not met.Â
SB 5720 is scheduled to take effect on January 1, 2027.Â
Related Legislative ActivityÂ
Similar legislation has been introduced in other states. In Virginia, HB 444 has passed the legislature and is pending approval by the governor. If signed, it will take effect on July 1, 2027. In Pennsylvania, HB 801 has been referred to the House Judiciary Committee.Â
Medical Debt LegislationÂ
Other debt-related bills in Washington did not advance during the legislative session.Â
Senate Bill 6105, which proposed increasing the exemption of earnings for judgments related to medical debt, was tabled after a public hearing. The bill may be reconsidered in 2027.Â
SB 5993, which addressed interest rates on medical debt, did not pass before the legislative session ended on March 12. The bill proposed reducing the interest rate to 1%, compared to the current 9% cap established in 2019. Earlier versions of the legislation included a proposed rate of 0%.Â
Further consideration of medical debt legislation is expected in future sessions.Â
Author:Â Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
Third Party Auditing and Custom Consulting Available
With expertise and experience in collections, oversight and compliance, we understand the challenges faced by creditors in managing collections and recoveries while adhering to ever-evolving regulatory standards. Â
That’s why our team of seasoned experts is dedicated to providing tailor solutions that address your unique collection and compliance requirements.Â
From comprehensive consulting services to specialized training programs and meticulous oversight of third-party vendors, we offer a comprehensive suite of services designed to empower your team and optimize your compliance strategies.Â
Contact our blog authors or Write to us at info@resourcemanagement.com for more information.
www.resourcemanagement.com
Sign Up for the Twice Monthly Complimentary Newsletter
Just enter your email address at the top orange bar at:
Collection Compliance Experts – “The Power of Expertise: Oversight Perfected”
It’s that easy! Twice a month – we provide blog updates and Resources for the Collection and Industry Professional.Â
Your email is just for this newsletter. We never sell your information. No fee. Opt-out at any time.
