7 LONG TITLE
8 General Description:
9 This bill amends provisions related to debt collection.
10 Highlighted Provisions:
11 This bill:
12 ▸ requires a creditor or third party debt collection agency to provide a receipt for each
13 payment made by or on behalf of a debtor.
14 Money Appropriated in this Bill:
16 Other Special Clauses:
18 Utah Code Sections Affected:
20 12-1-11, as last amended by Laws of Utah 2020, Chapter 121
22 Be it enacted by the Legislature of the state of Utah:
23 Section 1. Section 12-1-11 is amended to read:
24 12-1-11. Collection fee -- Convenience fees -- Receipt for payment required.
25 (1) As used in this section:
26 (a) "Creditor" is as defined in 15 U.S.C. Sec. 1692a.
27 (b) "Debt" means an obligation or alleged obligation to pay money arising out of a
28 transaction for money, property, insurance, or services.
29 (c) "Debtor" means a person obligated or allegedly obligated to pay a debt.
30 (d) "Financial transaction card" means the same as that term is defined in Section
32 (e) "Third party debt collection agency" means:
33 (i) a debt collector as defined in 15 U.S.C. Sec. 1692a; or
34 (ii) a person who would be a debt collector under 15 U.S.C. Sec. 1692a, except that the
35 person does not use an instrumentality of interstate commerce or the mail.
36 (2) (a) A creditor may require a debtor to pay a collection fee in addition to any other
37 amount owed to the creditor for a debt if:
38 (i) imposing a collection fee on the debtor or in relation to the debt is not prohibited or
39 otherwise restricted by another federal or state law;
40 (ii) the creditor contracts with a third party debt collection agency or licensed attorney
41 to collect the debt;
42 (iii) the third party debt collection agency with which the creditor contracts is
43 registered under this title;
44 (iv) there is a written agreement between the creditor and the debtor that:
45 (A) creates the debt; and
46 (B) provides for the imposition of the collection fee in accordance with this section;
48 (v) the obligation to pay the collection fee is imposed at the time of assignment of the
49 debt to a third party debt collection agency or licensed attorney in accordance with an
50 agreement described in Subsection (2)(a)(iv).
51 (b) The creditor shall establish the amount of the collection fee imposed under this
52 Subsection (2), except that the amount may not exceed the lesser of:
53 (i) the actual amount a creditor is required to pay a third party debt collection agency or
54 licensed attorney, regardless of whether that amount is a specific dollar amount or a percentage
55 of the principal amount owed to the creditor for a debt; or
56 (ii) 40% of the principal amount owed to the creditor for a debt.
57 (c) An obligation to pay a collection fee imposed under this Subsection (2) is in
58 addition to any obligation to pay attorney fees that may otherwise exist.
59 (3) (a) Subject to Subsection (3)(b), a third party debt collection agency that accepts a
60 financial transaction card for the transaction of business may charge a convenience fee for a
61 transaction processed over:
62 (i) the phone;
63 (ii) text or similar short message service; or
64 (iii) the Internet.
65 (b) Before a third party debt collection agency charges a convenience fee as described
66 in Subsection (3)(a), the third party debt collection agency shall:
67 (i) clearly disclose to the debtor that the third party debt collection agency will charge
68 the debtor a convenience fee, in a time and manner that allows the debtor to accept or reject the
69 convenience fee;
70 (ii) disclose to the debtor the amount of the convenience fee; and
71 (iii) give the debtor an alternative payment method option for which a convenience fee
72 does not apply.
73 (4) (a) Within two business days after the day on which a creditor or third party debt
74 collection agency receives from a debtor a request for a receipt for a payment made by or on
75 behalf of the debtor, the creditor or third party debt collection agency shall provide the debtor a
76 receipt that states:
77 (i) the payment date;
78 (ii) the payment amount; and
79 (iii) the account to which the payment was applied.
80 (b) A debtor may submit a request described in Subsection (4)(a) in writing, by
81 hardcopy or electronic means, or in person.