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July 1, 2025 – Rosenthal Act: SB 1286
CA Senate Bill 1286
SB 1286 expands the Rosenthal Fair Debt Collection Practices Act to include protections for commercial debts, termed “covered debt.” Effective July 1, 2025, debt collectors will be prohibited from using unfair or deceptive practices when collecting such debts. The bill updates definitions to include commercial debt in existing consumer protections, mandates proper judicial jurisdiction for legal proceedings, and extends identity theft safeguards and penalties to commercial debt cases. It clarifies that no additional licensing is required for collecting covered commercial debt and confirms no state reimbursement is needed for local costs. SB 1286 complements changes proposed by SB 1061.
For Collection Agencies
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Why does this matter to you?
Because you want to stay in business. Effective July 1, 2025, CA Senate Bill 1286 has been expanded to cover certain business related debts, including personal guarantees on business obligations. Requiring commercial debt collectors to follow consumer-style compliance rules. Agencies must now treat these “covered commercial debts” with enhanced protections—adjusting policies, communication practices, and training to avoid violations. Failure to comply can lead to regulatory enforcement and lawsuits, making early preparation essential for agencies collecting from individuals in California.
Key Contact:
Cory Svihla
Chief Revenue Officer
Office: (651) 273-2725
csvihla@dedicatedgbc.com
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For Businesses
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Why does this matter to you?
Because you should focus on your core business. If your business has accounts receivable in California—whether collecting in-house or via third parties—you should review your collection policies, train staff, and ensure all practices align with the new law. Businesses collecting commercial receivables in California must follow consumer-style protections, including bans on unfair or deceptive practices. The bill introduces legal risks for noncompliant collections, extends identity theft safeguards to business debts, and requires lawsuits be filed in the proper jurisdiction. Although no new debt collection license is needed, companies must still comply with the updated rules. Noncompliance could result in lawsuits, fines, or enforcement actions. SB 1286 complements changes in SB 1061, which may introduce further requirements. Now is the time to assess your exposure and update internal and external processes accordingly.
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Our Commitment
At Dedicated Financial GBC, we are committed to ethical and transparent debt collection practices. In light of SB 1286, we are proactively updating our policies and procedures to ensure full compliance and to continue serving our clients and their customers with integrity and respect.