Published On: November 6, 2013

Debt collectors face new rules under proposal from Consumer Financial Protection Bureau

(By Danielle Douglas, Published: November 5)

According to the Washington Post:

the government is preparing restrictions on debt collectors, a loosely regulated industry under increasing scrutiny over complaints of abusive tactics.  On Wednesday, the Consumer Financial Protection Bureau is slated to issue a notice of proposed rulemaking to modernize the legal framework governing debt collection.

The most-common complaints about debt collectors involve harassing phone calls, lack of verification of the debt and people becoming aware of a collection account only through their credit report.

Think about the information you are giving this stranger: all your financial information, your children’s names, bank accounts and your social security number. You do this without the slightest guarantee that the information will be kept safe.

The government watchdog is seeking public and business comment before formally proposing the rules, which are expected to be finalized by next year.The bureau is asking Americans whether creditors and collection agencies are providing accurate information about their outstanding debts. It also wants to know whether people are receiving threatening calls at all hours of the night or being dragged into court for money they do not owe.

“Collection of consumer debts serves an important role in the proper functioning of consumer credit markets,” CFPB Director Richard Cordray said Tuesday on a call with reporters. “But certain debt collection practices have long been a source of frustration for many consumers.”

Cordray noted that since the bureau began accepting debt collection complaints in July, it has received about 5,000 consumer grievances. The most-common complaints involve harassing phone calls, lack of verification of the debt and people becoming aware of a collection account only through their credit report.

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This problem is more than 20 years in the making.  The last major change in the debt collection industry was in 1977.  Congress enactment of the Fair Debt Collection Practices Act, a federal law to protect consumers from abusive tactics.  This statute does not address the industry’s use of the Internet, auto-dialers or social media.  Debt collectors know that they can ignore the law.  They use abusive language, threaten to take actions which are prohibited by law and call at times that they know is illegal.  This type of harassment has got to stop.

Will the proposed changes happen?  Only if consumers report the abuses.  Speak up and make yourself heard.

By |Published On: November 6th, 2013|Last Updated: May 29th, 2022|

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