NC Gov. Perdue signs beefed up consumer protection

RALEIGH, N.C. — North Carolina consumers soon will have new protections from foreclosures and intimidating debt collection practices.

Gov. Beverly Perdue on Wednesday signed into law a bill approved by the Legislature last month and backed by Attorney General Roy Cooper.

Once the new law takes effect next month, it will allow a clerk of court to postpone a foreclosure hearing for up to 60 days to allow a homeowner more time to work out a payment plan with the mortgage holder and remain in their home.

“During this recession, thousands of North Carolinians have lost their homes because of foreclosure,” Perdue said. “When a home is foreclosed it’s bad for our families, it’s bad for our communities, it’s bad for our businesses and it’s bad for North Carolina. This bill makes it easier for homeowners to work out a deal with their lenders and avoid foreclosure.”

The bill also sets out new rules for companies that attempt to collect from consumers on old debts from credit cards or other unpaid bills.

The law extends regulation to debt buyers, who Cooper said have engaged in overly aggressive debt collecting practices.

Debt buyers pay credit card companies, hospitals and others a fraction of the full amount due on unpaid accounts, then work at forcing debtors to pay up. The state law extends debt-collection regulations to cover the law firms that often file lawsuits to collect the cash. Critics say debt buyers often pursue collection even when it is barred by law, such as when the debt is discharged after bankruptcy or has lingered beyond the legal collection deadline.

“In a lot of cases, there’s no liability on the part of the individual,” said Sen. Tony Rand, D-Cumberland, who sponsored the legislation.

Beginning next month, debt buyers who try to collect on a debt that they should reasonably know is blocked by a statute of limitations could face lawsuits and civil penalties of up to $4,000 per violation.

The state law also will require debt collectors to provide documents proving they own the accounts they’re trying to collect. Taking a debtor to court will require records including the original account number of the debt, the name of the original creditor, and an itemization of charges and fees the current creditor claims is owed.