California debt collection laws

By Kai Greenspan, Founding Editor · Last updated: September 1, 2026

How long can someone sue you over a debt in California?

The Code of Civil Procedure sets the period by the kind of obligation, and for consumer debts the two that usually matter are these.

Four years for “an action upon any contract, obligation or liability founded upon an instrument in writing”, under Section 337(a).

Two years for “an action upon a contract, obligation or liability not founded upon an instrument of writing”, under Section 339.

Section 337 also says, in its own words, what a run-out period means. Under 337(d),“When the period in which an action must be commenced under this section has run, a person shall not bring suit or initiate an arbitration or other legal proceeding to collect the debt.” The period “shall only be extended pursuant to Section 360”.

Which period applies to a particular account, when it started, and whether anything paused it are questions about the facts of that account, and they are for a lawyer rather than this page.

Sources: Code of Civil Procedure Section 337 andSection 339 · quoted 1 September 2026

Do debt collectors have to be licensed in California?

Yes, and the statute is direct. Financial Code Section 100001(a) states:“No person shall engage in the business of debt collection in this state without first obtaining a license pursuant to this division.” The division is the Debt Collection Licensing Act, which Section 100000 says “shall be known, and may be cited, as the Debt Collection Licensing Act”, and the licence is issued by the Department of Financial Protection and Innovation.

The same subdivision reaches collectors on both sides of the state line. A person is acting in California “if the person is located in this state and is seeking to collect from a debtor that resides inside or outside the state, or is located outside of the state and is seeking to collect from a debtor that resides in this state”.

One licence covers the business, not each office. The licence is“obtained for the licensee’s principal place of business and shall not be transferred or assigned”, and “A separate license is not required for each individual branch office.”

Since when. The requirement is recent. The history note to Section 100000 records it as “Operative January 1, 2022, pursuant to Sec. 100000.5.”Collectors that applied early could keep working while the department considered the application: Section 100000.5(a) provides that the commissioner “shall allow any debt collector that submits an application before January 1, 2023, to operate pending the approval or denial of the application.” Two things follow for anyone reading a licence. No California debt collector licence is older than 2022, so the oldest possible licence today is under five years old. And a licence issued in 2022 or 2023 may belong to a business that was already collecting under that pending-application rule.

Sources: Financial Code Section 100001,Section 100000 and Section 100000.5· quoted 1 September 2026

Can a city or county require its own licence?

No. Financial Code Section 100000.7 is a single sentence: “No county, city, or other political subdivision within this state shall require a debt collector to be licensed or to register as a debt collector.”

That is one way California differs from New York, where the licence that matters is New York City’s. In California, the state licence is the only one the law provides for.

Source: Financial Code Section 100000.7 · quoted 1 September 2026

Who does not need the licence?

Section 100001(b)(1) provides that the Act “shall not apply to a depository institution”, and goes on to list other businesses that hold a different licence already: a person licensed as a finance lender or as a residential mortgage lender under the Financial Code, a real estate licensee under the Business and Professions Code, a business subject to the Karnette Rental-Purchase Act, and a trustee carrying out a nonjudicial foreclosure.

Section 100001(c) keeps the Act away from commercial collection as well: it “shall not apply” to “the collection of covered commercial debt or covered commercial credit”, as the Civil Code defines those terms.

This matters when you look a company up. A bank collecting its own accounts, a licensed lender, or a commercial collector can be operating lawfully in California and lawfully hold no debt collector licence.

Source: Financial Code Section 100001 · quoted 1 September 2026

Does a collector have to show its licence number?

Yes, in two ways, and both are in Civil Code Section 1788.11. On request:“A debt collector shall provide its California debt collector license number, if applicable, upon the consumer’s request.” And on paper, where the section lists as a prohibited practice “Sending written or digital communication to the person that does not display the California license number of the collector, if applicable, in at least 12-point type.”

So a collection letter or email from a licensed California collector carries the number on its face, in type large enough to read. That gives you a second place to find it, on the collector’s own correspondence, independent of any register.

Source: Civil Code Section 1788.11 · quoted 1 September 2026

What are collectors not allowed to do?

California’s own rules are in the Rosenthal Fair Debt Collection Practices Act, which Civil Code Section 1788 says “may be cited as the Rosenthal Fair Debt Collection Practices Act”. Section 1788.11 opens: “No debt collector shall collect or attempt to collect a covered debt by means of the following practices”, and the list includes “Using obscene or profane language”,“Causing a telephone to ring repeatedly or continuously to annoy the person called”, and “Communicating, by telephone or in person, with the debtor with such frequency as to be unreasonable, and to constitute harassment of the debtor under the circumstances”.

The state law also pulls in the federal one. Section 1788.17 provides that“every debt collector collecting or attempting to collect a consumer debt shall comply with the provisions of Sections 1692b to 1692j, inclusive, of, and shall be subject to the remedies in Section 1692k of, Title 15 of the United States Code”, which is the federal Fair Debt Collection Practices Act. The section adds that those federal references are to the codes “as they read January 1, 2001”.

Sources: Civil Code Section 1788,Section 1788.11 and Section 1788.17· quoted 1 September 2026

How do you check a California collector?

The Department of Financial Protection and Innovation does not host a licensee search of its own. Its debt collectors page directs the public toNMLS Consumer Access, the national licensing system’s public lookup, as the place to search for a California debt collector licence. That lookup is built for a person checking one licensee at a time, and it sets terms on how it may be used.

The second place is the collector’s own correspondence. Under Section 1788.11, a licensed collector’s letters and emails display its California licence number in at least 12-point type, and it provides the number on request.

This directory does not yet list California agencies. The states page says which states are covered and what verified means in each.

Common questions about California debt collection law

This page is information about published law, not legal advice, and it does not create a lawyer-client relationship. Whether any rule applies to a particular debt depends on facts this page cannot know. Every quotation above was taken from the linked source on the date shown; if you find an error, our corrections policyexplains how to tell us.

Related pages