More collection agencies are using abusive phone tactics, and consumers should be allowed to secretly record those phone calls to defend themselves if a debt dispute winds up in court, Nevada lawmakers were told Wednesday.
Assemblywoman Debbie Smith, D-Sparks, told the Assembly Judiciary Committee that her AB127 would allow consumers speaking with collection agencies to record their phone calls without the consent of the agency.
Smith cited news reports about debt collectors becoming increasingly aggressive, adding that the Federal Trade Commission received more than 66,000 complaints about third-party debt collectors in 2005, about six times the number of complaints the agency got in 1999.
Nevada is one of about a dozen states that require both parties to consent before a telephone call is recorded. Only a few types of conversations are exempt from that rule, such as certain emergency situations, court-ordered wiretaps, and some phone calls from prisons.
Las Vegas Attorney Mitch Gliner, who represents people suing collection agencies for abusive practices, said his clients have had collection agencies tell them they would be thrown in prison, deported, or lose the right to visit their children if they don't pay up.
"While the majority of debt collectors, in my view, certainly are law-abiding, there's a substantial component ... that will attempt to strong-arm and extort and intimidate people into paying money," said Gliner.
Several representatives from debt collection agencies spoke against the bill, saying their industry shouldn't be singled out. Some debtors could "set up" situations where collectors say the wrong thing, or use technology to manipulate recordings, they said.
David Stone, who owns a Las Vegas debt collection agency, told lawmakers that since only debtors would have the recordings, there would be no way to verify the recordings were accurate, and the bill could inspire spurious lawsuits.
"Phone call recordings are extremely unreliable, especially in this day and age, when manipulating a phone call recording is as easy as clicking a computer mouse," said Stone. "This gives desperate or creative debtors license to record a conversation, manipulate it, and sue the agency. The debtor is the only person who has control of the recording. They can do whatever they want with that."
John Wanderer, a Las Vegas attorney who works for debt collectors, said that abusive phone calls haven't been a widespread problem since the federal government passed the Fair Debt Collection Practices Act in 1978. The bill's definition of who is a debt collector is ill-defined, he added.
"What is a collection agent?" asked Wanderer. "Is that the lawyer calling from the casino to someone who gave the casino bad markers?"
The committee also considered AB116, a bill sponsored by Assemblyman John Carpenter, R-Elko, that would reduce the minimum amount of narcotics required to convict a person of drug trafficking from four grams to three grams. The bill would also increase the minimum sentence imposed for such crimes from one year in prison to two years.
Lobbyists for public defenders in Clark and Washoe counties spoke against the bill, saying the limits are so low that the bill would only increase the number of low-level drug users in prison.