2015 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 669 - Regulated Activities
Section 36a-805 - (Formerly Sec. 42-131). Prohibited practices. Exception.

(a) No consumer collection agency shall: (1) Furnish legal advice or perform legal services or represent that it is competent to do so, or institute judicial proceedings on behalf of others; (2) communicate with consumer debtors or property tax debtors in the name of an attorney or upon the stationery of an attorney, or prepare any forms or instruments which only attorneys are authorized to prepare; (3) receive assignments as a third party of claims for the purpose of collection or institute suit thereon in any court; (4) assume authority on behalf of a creditor to employ or terminate the services of an attorney unless such creditor has authorized such agency in writing to act as such creditor’s agent in the selection of an attorney to collect the creditor’s accounts; (5) demand or obtain in any manner a share of the proper compensation for services performed by an attorney in collecting a claim, whether or not such agency has previously attempted collection thereof; (6) solicit claims for collection under an ambiguous or deceptive contract; (7) refuse to return any claim or claims upon written request of the creditor, claimant or forwarder, which claims are not in the process of collection after the tender of such amounts, if any, as may be due and owing to the agency; (8) advertise or threaten to advertise for sale any claim as a means of forcing payment thereof, unless such agency is acting as the assignee for the benefit of creditors; (9) refuse or fail to account for and remit to its clients all money collected which is not in dispute within sixty days from the last day of the month in which said money is collected; (10) refuse or intentionally fail to return to the creditor all valuable papers deposited with a claim when such claim is returned; (11) refuse or fail to furnish at intervals of not less than ninety days, upon the written request of the creditor, claimant or forwarder, a written report upon claims received from such creditor, claimant or forwarder; (12) add any post charge-off charge or fee for cost of collection, unless such cost is a court cost, to the amount of any claim which it receives for collection or knowingly accept for collection any claim to which any such charge or fee has already been added to the amount of the claim unless (A) the consumer debtor is legally liable for such charge or fee as determined by the contract or other evidence of an agreement between the consumer debtor and creditor, a copy of which shall be obtained by or available to the consumer collection agency from the creditor and maintained as part of the records of the consumer collection agency or the creditor, or both, and (B) the total charge or fee for cost of collection does not exceed fifteen per cent of the total amount actually collected and accepted as payment in full satisfaction of the debt; (13) use or attempt to use or make reference to the term “bonded by the state of Connecticut”, “bonded” or “bonded collection agency” or any combination of such terms or words, except that the word “bonded” may be used on the stationery of any such agency in type not larger than twelve-point; (14) when the debt is beyond the statute of limitations, fail to provide the following disclosure in type not less than ten-point informing the consumer debtor in its initial communication with such consumer debtor that (A) when collecting on debt that is not past the date for obsolescence provided for in Section 605(a) of the Fair Credit Reporting Act, 15 USC 1681c: “The law limits how long you can be sued on a debt. Because of the age of your debt, (INSERT OWNER NAME) will not sue you for it. If you do not pay the debt, (INSERT OWNER NAME) may report or continue to report it to the credit reporting agencies as unpaid”; and (B) when collecting on debt that is past the date for obsolescence provided for in Section 605(a) of the Fair Credit Reporting Act, 15 USC 1681c: “The law limits how long you can be sued on a debt. Because of the age of your debt, (INSERT OWNER NAME) will not sue you for it and (INSERT OWNER NAME) will not report it to any credit reporting agencies.”; or (15) engage in any activities prohibited by sections 36a-800 to 36a-812, inclusive.

(b) No consumer collection agency shall impose a charge or fee for any child support payments collected through the efforts of a governmental agency. If the imposition of a charge or fee is permitted under section 36a-801b, no consumer collection agency shall impose a charge or fee for the collection of any child support overdue at the time of the contract in excess of twenty-five per cent of overdue support actually collected.

(c) (1) No consumer collection agency shall receive any property tax on behalf of a creditor that is a municipality, unless the consumer collection agency has procured from an insurer authorized to transact business in this state an insurance policy providing coverage against loss of money, securities or other property, including loss arising from any fraudulent or dishonest act of any employee, officer or director of the consumer collection agency, with limits of at least two million dollars. It shall be the obligation of the municipality to ensure compliance with the requirements of this subdivision.

(2) A municipality that enters into an agreement with a consumer collection agency to collect and receive for payment property tax on behalf of the municipality may also require such consumer collection agency to file a bond with the municipality in an amount not exceeding the total amount of the property tax to be collected on behalf of the municipality. Such bond, the form of which shall be approved by the municipality, shall be written by a surety authorized to write bonds in this state and shall contain a provision requiring the surety to provide the municipality with written notice of cancellation of such bond. Such notice shall be sent by certified mail to the municipality at least thirty days prior to the date of cancellation. The bond shall be conditioned that such consumer collection agency shall well, truly and faithfully account for all funds collected and received by the consumer collection agency for the municipality pursuant to such agreement. If the municipality is damaged by the wrongful conversion of any property tax debtor funds received by the consumer collection agency, the municipality may proceed on such bond against the principal or surety on the bond, or both, to recover damages. The proceeds of the bond, even if commingled with the other assets of the consumer collection agency, shall be deemed by operation of law to be held in trust for the benefit of the municipality in the event of bankruptcy of the consumer collection agency and shall be immune from attachment by creditors and judgment creditors.

(1953, S. 3314d; 1971, P.A. 539, S. 8; P.A. 81-183; P.A. 84-61, S. 2, 3; P.A. 92-12, S. 104; P.A. 01-207, S. 6, 12; P.A. 02-111, S. 50; P.A. 03-262, S. 3; P.A. 13-253, S. 26; P.A. 15-235, S. 36.)

History: 1971 act specified applicability to “consumer” collection agencies, deleted provisions prohibiting use of slogans in collection letters, etc., which threaten legal suit or wage garnishment or list attorney name and title, use of justices of the peace, constables, sheriffs, etc., for claims collection, use or threat of physical violence, use of instruments simulating judicial process, publication of list of debtors and threats to do so and use of “shame cards”, “shame automobiles”, etc., intimidation or methods in violation of postal regulations, clarified remaining provisions and required accounting to clients of moneys collected within sixty rather than 90 days from end of month in which collected and added prohibitions contained in Subdivs. (l) to (r); P.A. 81-183 required that consumer collection agencies not add any charge or collection fee to the amount of a claim greater than 15% of amount actually collected on the debt; P.A. 84-61 amended Subdiv. (i) to provide that no agency shall refuse or fail to remit as well as account for all money collected which is not in dispute and amended Subdiv. (m) to prohibit such agency from knowingly accepting for collection any claim to which any fee or charge has been already added to the amount of the claim; P.A. 92-12 redesignated Subdivs.; Sec. 42-131 transferred to Sec. 36a-805 in 1995; P.A. 01-207 designated existing provisions as Subsec. (a) and made a technical change therein for purposes of gender neutrality and added Subsec. (b) re charge or fee for collection of child support payments, effective July 1, 2001 (Revisor’s note: In codifying Subsec. (b), the reference to “section 10 of this act” was deemed by the Revisors to be a reference to “section 7 of this act”, codified as Sec. 36a-801b, since section “10” of P.A. 01-207 had been renumbered as section “7” during the amendment process); P.A. 02-111 amended Subsec. (a)(2) by changing “communicate with debtors” to “communicate with consumer debtors or property tax debtors” and (a)(13) by changing “charge or collection fee” to “collection charge or fee” and added new Subsec. (c) prohibiting consumer collection agency from receiving property tax on behalf of creditor that is a municipality, effective July 1, 2002; P.A. 03-262 amended Subsec. (c) by designating existing provisions as Subdiv. (1), amending Subdiv. (1) to add exception re procurement of insurance policy, and adding Subdiv. (2) authorizing municipality that enters into agreement with consumer collection agency to require agency to file bond, effective July 9, 2003; P.A. 13-253 amended Subsec. (a) to delete “purchase or” and add “as a third party” in Subdiv. (3), delete former Subdiv. (12) re comingling of money, redesignate existing Subdiv. (13) as Subdiv. (12) and amend same by adding “post charge-off”, adding provision re fee for cost of collection other than a court cost, designating provision re consumer debtor being legally liable for charge or fee as Subpara. (A) and amending same to add provision re determination by contract or other evidence of agreement between consumer debtor and creditor, and adding Subpara. (B) re total charge or fee for cost of collection not to exceed 15 per cent of total amount collected and accepted as payment in full satisfaction of the debt, redesignate existing Subdiv. (14) as Subdiv. (13), and add new Subdiv. (14) re disclosure when debt is beyond statute of limitations; P.A. 15-235 amended Subsec. (a) to change “36a-810” to “36a-812”, effective July 7, 2015.