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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." 


Frequent communications and reminders (calling, texting, emailing, etc.) with the customer to pick up a vehicle when it’s ready may be considered “debt collection” and is prohibited under the bill. 


"Communications with the customer’s employer or family members to have the vehicle picked up is also prohibited, which will constrain and make the process even harder," Molodanof said. "Auto shops need to be able to communicate with their customers, and this bill will make all of that much more problematic."


Basic mechanics' lien rights will also be jeopardized if AB 2825 passes, Molodanof said. 


"Auto repair shops may only be able to recover 50 percent of the amount owed for services and repair after a lien sale based on guidelines of what the car may be worth as opposed to its actual value. The bill fundamentally changes mechanics' lien laws, and we believe that it's unconstitutional," he said.  


The proposed bill can also lead to what Molodanof calls "unintended consequences." 


"Since a repair business will not be able to recover all of the money owed for services and repairs, shops will have no choice but to start requiring customers to pay the entire amount upfront in order to begin repairs,” he said. “This will significantly impact consumers, especially low-income individuals and working families who depend on older vehicles." 


Another provision in the bill that will lead to further complications deals with what is known as "language access."


"There are five different languages, including Spanish, Chinese, Korean, Tagalog and Vietnamese, that will trigger this section of the bill," he said. "So, you'll now have to provide documentation in different languages for certain customers, including estimates and final invoices. The bill is complicating the process on so many levels because all of the laws that apply to debt collectors in the traditional sense will now apply for mechanical and collision repair shops. It’s bad policy to treat auto repair businesses as traditional debt collectors because they are not debt collectors; they are small businesses that repair and service vehicles. The bill also exempts new car manufacturer dealerships that own and operate repair facilities, but fails to exempt independent auto repair businesses that perform the same services, which is patently unfair." 


To fight this bill, Molodanof is instructing shops to call or contact their Senator and request that this bill also exempt independent automotive service and repair facilities---not just new car manufacturer dealerships. You can find your representative at http://findyourrep.legislature.ca.gov/ and write a simple letter or email.

 

"Wondering what to say when you call or contact your representative?” he said. “Here is a script: ‘Hi, my name is_________.  I am the owner of___________. I am calling to ask that Senator ___________vote 'no' unless the bill is amended to exempt independent repair shops. Auto repair shops service and repair cars for their customers. We are not debt collectors. Please vote 'no'. Thank you.’"

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