Politicians Still Arguing Over Debt Collection Regulation

The two leading candidates in Florida’s gubernatorial race are once again making a public spectacle over who gets to regulate and “punish” debt collectors in the Sunshine State.

Alex Sink, current state Chief Financial Officer and leading Democrat for the November election to determine Florida’s governor, is pushing a bill in the state legislature that would give the Department of Financial Services under her office the power to regulate and punish debt collectors, according to the Orlando Sentinel.

Meanwhile, the leading Republican candidate for Governor, Bill McCollum – the current state Attorney General – is also angling for more power to go after accounts receivable management firms. He said that Sink’s proposals would weaken his power to perform his primary job: protecting Florida consumers.

The issue of debt collection regulation has been prominent in the race after the Sentinel reported last year that no investigations had been opened into illegal debt collection activities by either Sink or McCollum’s offices, ostensibly the two offices charged with regulating debt collection activity.

Last year, both would-be candidates pledged to crack down on debt collectors in a populist push. Both Sink and McCollum hold positions that regulate financial matters, so both offered proposals to deal with rising consumer complaints against debt collectors (“State Launching Major Crackdown on Debt Collectors,” Nov. 9, 2009).

Sink said that she will offer an aggressive plan today to address complaints against debt collectors. As the law is currently written, an investigation into a debt collection agency cannot begin until there have been at least five written, notarized complaints lodged against a company. Sink wants the state to go after collectors on the first complaint. Also, she wants regulators to have access to company books in investigations and make harassment a felony, with a fine of $5,000 per violation.

For his part, McCollum wants to ask lawmakers to define certain debt-collector practices as violations of Florida’s Deceptive and Unfair Trade Practices Act. Doing so would make it easier for the attorney general to pursue cases.

The issue has been a touchstone for campaign literature and talking points. At one point last year, Sink’s campaign sent out a press release with the headline: “Why Do Your Job When You Can Avoid It?” and using the talking point, “If McCollum ignores his responsibilities as Attorney General, how can Floridians count on him as Governor?”