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Monday, 16 July 2018 21:21

AB 2825 Will Force Body Shops to Become Debt Collectors

Written by
Jack Molodanof Jack Molodanof

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If Assembly Bill 2825 (authored by Assembly member Reginald Byron Jones-Sawyer, Sr., Los Angeles) passes, auto repair shops, including collision repairers, will turn into debt collectors---a job that they're not suited for, according to Jack Molodanof, head lobbyist for the California Autobody Association.

Originally written to deal with towing companies, AB 2825 was amended on June 18 to include any company that repairs vehicles.  


The Automotive Service Councils of California and the California Automotive Business Coalition also oppose the bill. Supporters include Consumers Union, the California Low-Income Consumer Coalition, the California Immigrant Policy Center, the East Bay Community Law Center, the Los Angeles chapter of the National Lawyers Guild and Legal Services for Prisoners with Children. 


According to a legislative analysis of AB 2825, debt tied to vehicle towing, repairs or storage had been exempt from the Rosenthal Fair Debt Collection Practices Act. The bill applies similar restrictions to other creditors on how repairers and tow companies can pursue reimbursement.


Molodanof described the 40-page bill as extremely complicated and far-reaching, with serious problems. 


"In simple terms, auto repair businesses are not 'debt collectors'; they are small businesses that service and repair vehicles for their customers," he said. "We're still trying to get our heads around this bill and can't fathom why we were ever included in it at all."


One of CAA's main concerns about AB 2825 is the fact that when a body shop becomes a debt collector, communication with customers will be highly restricted. 


"Generally, vehicle liens are created once the vehicle is repaired and ready for pickup," Molodanof said. "If this bill passes, communications will be regulated and subject to the laws that govern debt collectors. So, if you want to send the customer a friendly reminder for when the car is ready to be picked up, it's now a whole different situation. If the customer does not respond and you send another email, text or phone call, for example, those could potentially be considered repetitive communications that might be construed as being unreasonable and a form of harassment. Before, collision repair shops were out of the loop when it came to these types of collection practices, but now they could easily be subject to strict liability, unnecessary fines, penalties and frivolous lawsuits." 


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