LRB-3775/1
ARG:cjs:cs
2013 - 2014 LEGISLATURE
March 12, 2014 - Introduced by Representatives Hintz, Richards, Hebl, Barnes,
Sargent, Zamarripa, Ohnstad, Wright, Pasch, Goyke, Sinicki, Hulsey,
Berceau, C. Taylor and Shankland, cosponsored by Senators Hansen and T.
Cullen
. Referred to Committee on Judiciary.
AB863,1,4 1An Act to amend 425.109 (1) (intro.), (b), (d), (f) and (h) and (2), 425.301 (title),
2425.301 (2) and 427.105 (1); and to create 427.104 (1) (n) and (o), 427.104 (3),
3(4) and (5) and 427.105 (1m) of the statutes; relating to: litigation procedure,
4and debt collection, under the Wisconsin Consumer Act.
Analysis by the Legislative Reference Bureau
Under current law, a consumer credit transaction in which the amount financed
is $25,000 or less, and which is entered into for personal, family, or household
purposes, is generally subject to the Wisconsin Consumer Act (WCA). A consumer
credit transaction means a transaction between a merchant and a customer in which
property, services, or money is acquired on credit and the customer's obligation is
payable in installments or a finance charge may be imposed. A merchant is defined
to include, among others, a creditor or a seller of property on credit and expressly
includes such a creditor's or seller's assignee or successor. A customer is a person,
other than an organization, who seeks or acquires property, services, money, or credit
for personal, family, or household purposes or, with respect to debt collection, for
agricultural purposes. A creditor is defined as a merchant who regularly engages in
consumer credit transactions or in arranging for the extension of consumer credit by,
or procuring consumer credit from, third persons. A consumer credit transaction
may involve a consumer credit sale, a consumer loan, a consumer lease, or a
transaction pursuant to an open-end credit plan (usually involving use of a credit
card).

Under current law, the WCA includes requirements for a creditor or merchant
to satisfy to enforce rights arising from a consumer credit transaction, including
pleading requirements for a complaint filed by a creditor to enforce these rights.
Among the information that must be included in such a complaint, the creditor must:
identify the consumer credit transaction; describe any collateral sought to be
recovered; specify the facts constituting the customer's alleged default; identify the
actual or estimated amount of money that the creditor is entitled to recover and the
figures necessary for computation of this amount; and include an accurate copy of the
writings evidencing the transaction except that, for a claim arising under an
open-end credit plan, the creditor may substitute a statement that the creditor will,
upon request, provide copies of the writings evidencing the customer's obligation.
A judgment may not be entered on a complaint that fails to comply with these
pleading requirements.
In Rsidue, L.L.C. v. Michaud, 2006 WI App 164, 295 Wis. 2d 585, 721 N.W. 2d
718, the Wisconsin Court of Appeals held that, because the WCA does not refer to an
assignee of a creditor, these pleading requirements do not apply to an assignee.
This bill amends the WCA to specify that these pleading requirements do apply
to an assignee of a creditor. The bill also provides that an aggrieved party is entitled
to request a jury trial in any action to enforce a right or obligation under the WCA.
Under current law, provisions of the WCA also regulate debt collectors and debt
collection practices in connection with the collection of obligations arising from
consumer transactions. A consumer transaction is a transaction in which one or
more of the parties is a customer for purposes of that transaction. A debt collector
is defined as any person engaging, directly or indirectly, in debt collection. Debt
collection is defined as any action, conduct, or practice of soliciting claims for
collection or collecting claims alleged to be owed or due a merchant by a customer.
A claim is defined as any obligation or alleged obligation arising from a consumer
transaction.
Under current law, the WCA prohibits certain practices in connection with debt
collection. In attempting to collect an alleged debt arising from a consumer credit
transaction or other consumer transaction where there is an agreement to defer
payment, a debt collector may not, among other things: 1) use or threaten force or
violence; 2) threaten criminal prosecution; 3) disclose or threaten to disclose false
information about the customer's credit worthiness; 4) with exceptions,
communicate with the customer's employer; 5) disclose or threaten to disclose
information affecting the customer's reputation, except to a person who has a
legitimate business need for it; 6) engage in threatening or harassing conduct, which
may include communications with such frequency or at such unusual hours at to be
expected to threaten or harass the customer; 7) use obscene or threatening language;
or 8) use a communication which simulates legal or judicial process or which gives
the appearance of being authorized by a government agency. A person who is injured
by a violation of any of these prohibitions may recover actual damages, including for
emotional distress or mental anguish, and a penalty ranging from $100 to $1,000.
This bill adds to this list of prohibited practices by a debt collector and also
imposes certain requirements on a debt collector. Under the bill, a debt collector may

not communicate with a customer through a postcard or, in written communications
to the customer, place information on the exterior of an envelope except the
customer's name, address, and telephone number, the debt collector's address, and,
if the debt collector's business name does not indicate that it is in the debt collection
business, its business name. In addition, a debt collector may not attempt to collect
the debt without obtaining reasonable verification that the customer owes the debt
in the amount claimed. Under the bill, reasonable verification must include
obtaining certain business records or business records that contain certain
information. These business records must include complete, authenticated
documentation that the debt collector, or person on whose behalf the debt collector
is acting, is the owner of the specific debt instrument or account at issue. These
business records must also contain the date that the debt was incurred, the date and
amount of the last payment by the customer, and an itemized accounting of the
amount claimed to be owed, including, if the debt arises from a credit card, copies of
the last 24 periodic statements on the account. Upon request by the customer, a debt
collector must provide to the customer, within 30 days of the request, copies of all of
these business records that the debt collector is required to obtain. The bill also
requires any person who sells or assigns a debt or claim to provide to the buyer or
assignee, at the time of the sale or assignment, specified documentation and a
statement disclosing specified information.
Under the bill, a person who is injured by a violation of any of the prohibitions
related to debt collection may recover, in addition to actual damages, a penalty of
$5,590, which amount is adjusted for inflation every two years.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB863,1 1Section 1. 425.109 (1) (intro.), (b), (d), (f) and (h) and (2) of the statutes are
2amended to read:
AB863,3,53 425.109 (1) (intro.) A complaint by a creditor or its assignee to enforce any
4cause of action arising from a consumer credit transaction shall include all of the
5following:
AB863,3,76 (b) A description of the collateral or leased goods, if any, which the creditor or
7assignee
seeks to recover or has recovered.
AB863,4,28 (d) The actual or estimated amount of U.S. dollars or of a named foreign
9currency that the creditor or assignee alleges he or she is entitled to recover and the

1figures necessary for computation of the amount, including any amount received
2from the sale of any collateral.
AB863,4,83 (f) Except in an action to recover goods subject to a consumer lease, the
4estimated amount of U.S. dollars or of a named foreign currency of any deficiency
5claim which may be available to the creditor or assignee following the disposition of
6any collateral recovered subject to the limitations of s. 425.209 or which the creditor
7or assignee seeks to recover and which the creditor or assignee intends to assert
8subject to the limitations of s. 425.210 if the customer fails to redeem the collateral.
AB863,4,149 (h) An accurate copy of the writings, if any, evidencing the transaction, except
10that with respect to claims arising under open-end credit plans, a statement that the
11creditor or assignee will submit accurate copies of the writings evidencing the
12customer's obligation to the court and the customer upon receipt of the customer's
13written request therefor on or before the return date or the date on which the
14customer's answer is due.
AB863,4,19 15(2) Upon the written request of the customer, the creditor or its assignee shall
16submit accurate copies to the court and the customer of writings evidencing any
17transaction pursuant to an open-end credit plan upon which the creditor's claim, or
18the claim of the creditor's assignee,
is made and judgment may not be entered for the
19creditor or assignee unless the creditor or assignee does so.
AB863,2 20Section 2. 425.301 (title) of the statutes is amended to read:
AB863,4,21 21425.301 (title) Remedies to be liberally administered; jury trials.
AB863,3 22Section 3. 425.301 (2) of the statutes is amended to read:
AB863,5,223 425.301 (2) Any right or obligation declared by chs. 421 to 427 is enforceable
24by action unless the provision declaring it specifies a different and limited effect. In

1any action to enforce any right or obligation under chs. 421 to 427, the aggrieved
2party shall be entitled to a trial by jury upon timely request.
AB863,4 3Section 4. 427.104 (1) (n) and (o) of the statutes are created to read:
AB863,5,54 427.104 (1) (n) In any written communication to the customer, place any
5information on the exterior of the envelope except the following:
AB863,5,66 1. The customer's name, address, and telephone number.
AB863,5,87 2. The debt collector's address and its business name if this name does not
8indicate that it is in the debt collection business.
AB863,5,99 (o) Communicate with a customer through a postcard.
AB863,5 10Section 5. 427.104 (3), (4) and (5) of the statutes are created to read:
AB863,5,1511 427.104 (3) (a) In attempting to collect an alleged debt arising from a consumer
12credit transaction or other consumer transaction, including a transaction primarily
13for an agricultural purpose, where there is an agreement to defer payment, a debt
14collector may not attempt to collect the debt without obtaining reasonable
15verification that the customer owes the debt in the amount claimed.
AB863,5,1716 (b) For purposes of par. (a), reasonable verification shall include obtaining
17business records that constitute or contain all of the following:
AB863,5,2018 1.   Complete, authenticated documentation that the debt collector, or person on
19whose behalf the debt collector is acting, is the owner of the specific debt instrument
20or account at issue.
AB863,5,2121 2. The name of the original merchant.
AB863,5,2322 3. The name, last known address, date of birth, and last four digits of the social
23security number of the customer as it appeared on the original merchant's records.
AB863,5,2424 4. The customer's last account number with the original merchant.
AB863,6,4
15. The date that the debt was incurred, and the date and amount of the last
2payment by the customer toward the debt. For purposes of this subdivision, in the
3case of credit, the date that the debt was incurred shall be the last extension made
4for the purchase of goods or services, for the lease of goods, or as a loan of money.
AB863,6,75 6. A copy of the signed contract, signed application, or other documents that
6provide evidence of the customer's obligation and the terms of the customer's
7obligation.
AB863,6,148 7. An itemized accounting of the amount claimed to be owed, including the
9amount of the principal; the amount of any interest, fees, or charges; and whether
10the charges were imposed by the original merchant, a debt collector, or a subsequent
11owner of the debt. If the debt arises from a credit card, the account shall include
12copies of the last 24 periodic statements required by the federal Truth in Lending Act,
1315 USC 1637 (b), that evidence the transactions, purchases, fees, and charges that
14comprise the debt.
AB863,6,16 15(4) Upon request by the customer, a debt collector shall provide to the customer,
16within 30 days of the request, copies of business records described in sub. (3) (b).
AB863,6,18 17(5) Any person who sells or assigns a debt or claim shall provide to the buyer
18or assignee, at the time of the sale or assignment, all of the following:
AB863,6,2019 (a) Complete, authenticated documentation that the person is the owner of the
20debt or claim at issue.
AB863,6,2121 (b) A statement disclosing all of the following:
AB863,6,2322 1. Whether the customer has disputed or asserted any defenses to any portion
23of the debt or claim, and notes or recordings of all related communications.
AB863,7,224 2. Any validation, or lack of validation, that the seller or assignor has provided
25the customer under section 809 of the federal Fair Debt Collection Practices Act, 15

1USC 1692g, or has received from the original merchant or previous seller or assignor
2in response to a dispute or request for validation by the customer.
AB863,7,43 3. Whether any settlement has been reached concerning any portion of the debt
4or claim.
AB863,7,55 4. Whether the debt or claim is within the statute of limitations.
AB863,7,76 5. Whether the customer is or has been represented by an attorney and, if so,
7the attorney's contact information.
AB863,7,98 6. Whether the customer has informed a debt collector that a time or place is
9inconvenient to the customer for communication.
AB863,7,1010 7. Whether the debt or claim has been discharged or listed in bankruptcy.
AB863,7,1211 8. Any illness or disability claimed by the customer or known to the seller or
12assignor of the debt or claim.
AB863,7,1413 9. Whether the customer has a disability, is over the age of 62, or has limited
14English language ability.
AB863,7,1615 10. Whether the customer is or has been a service member at any time since
16the debt was incurred or claim arose.
AB863,7,1817 11. Whether the customer is known to receive income that is exempt from
18garnishment or attachment.
AB863,6 19Section 6. 427.105 (1) of the statutes is amended to read:
AB863,7,2420 427.105 (1) A person injured by violation of this chapter may recover actual
21damages and the penalty provided in s. 425.304 sub. (1m); but notwithstanding any
22other law actual damages shall include damages caused by emotional distress or
23mental anguish with or without accompanying physical injury proximately caused
24by a violation of this chapter.
AB863,7 25Section 7. 427.105 (1m) of the statutes is created to read:
AB863,8,2
1427.105 (1m) (a) A person who commits a violation of this chapter is liable to
2the customer in the amount of $5,590, as adjusted under par. (b).
AB863,8,53 (b) 1. In this paragraph, "consumer price index" means the U.S. consumer price
4index for all urban consumers, U.S. city average, as determined by the U.S.
5department of labor.
AB863,8,196 2. On July 1 of each even-numbered year, beginning on July 1, 2016, the
7administrator shall make a calculation of the percentage difference between the
8consumer price index for the 12-month period ending on December 31 of the
9preceding year and the consumer price index for the 12-month period ending on
10December 31 of the year that is 2 years before the preceding year and, if this
11percentage difference is a positive number, shall make a calculation of the dollar
12amount specified under par. (a) as adjusted by this percentage difference, rounded
13to the nearest multiple of $10. The administrator shall notify the legislative
14reference bureau of these calculated amounts, and the legislative reference bureau
15shall publish these calculated amounts in the Wisconsin administrative register
16under s. 35.93. If the calculated percentage difference is a positive number, then on
17the date of publication, as defined in s. 227.22 (1), of the Wisconsin administrative
18register, the amount under par. (a) is adjusted to reflect the calculated adjusted
19amount, as published.
AB863,8 20Section 8. Initial applicability.
AB863,8,2321 (1) The treatment of sections 425.109 (1) (intro.), (b), (d), (f), and (h) and (2) and
22425.301 (2) of the statutes first applies to actions commenced on the effective date
23of this subsection.
AB863,8,2524 (2) The treatment of section 427.105 (1) and (1m) of the statutes first applies
25to violations committed on the effective date of this subsection.
AB863,9,2
1(3) The treatment of section 427.104 (5) of the statutes first applies to debts or
2claims sold or assigned on the effective date of this subsection.
AB863,9 3Section 9. Effective date.
AB863,9,54 (1) This act takes effect on the first day of the 4th month beginning after
5publication.
AB863,9,66 (End)
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