Daley bills seek clarity on franchises, debt collection
HARRISBURG — State Rep. Peter J. Daley II, D-California, has introduced legislation that would create responsible franchise regulations and provide clarity to consumers about any debts they may owe.
“Laws governing both issues — franchise business arrangements and debt collection practices — desperately need to be updated,” said Daley, Democratic chairman of the House Consumer Affairs Committee. “Businesspeople and consumers are suffering from a lack of clarity and fairness in these matters.”
Daley said his House Bill 1620 would direct the state Department of Community and Economic Development (DCED) to develop fair, equitable and responsible franchise practices.
“A company may be complying with contract terms but still not dealing fairly or in good faith with the local operator of the company’s franchise,” Daley said. “Our laws simply have not evolved sufficiently to protect franchise operators, and updated, uniform standards would protect both parties.”
Daley said the bill would lay out basic ground rules for franchise operations, such as providing advance notice if the company plans to open another franchise near an existing one and establishing compensation guidelines in such instances.
“The goal is to prohibit both parties from destroying or injuring the other party’s ability to receive the full expected benefits of the contract,” Daley said. The DCED would be responsible for investigating any complaints.”
Daley said his second initiative — House Bill 1633 — would require debt collectors and creditors to provide consumers with written verification of any alleged debt sought for collection.
“During times of financial duress, debtors should have the facts spelled out clearly for them,” Daley said. “The legislation also would require debt collectors and creditors to state whether the debt is too old to be lawfully collected under the statute of limitations.”
Daley said nothing in the bill would prevent anyone from collecting what they are owed or from filing a lawsuit to pursue collection of a debt.
Both bills have been referred to the House Consumer Affairs Committee for possible consideration.