CFPB Hearing on Debt Collection
Debt collection is a $13.7 billion industry in the United States that employs over 130,000 people. At the Consumer Financial Protection Bureau (CFPB) Field Hearing on Debt Collection on July 28, 2016, Director Richard Cordray noted that much work still needs to be done in regards to how debt collectors go about receiving payments. Despite protective measures put forth to prevent debt collectors from using abusive tactics, consumers continue to voice problems regarding collectors, including harassing phone calls, threats of arrest or criminal prosecution, and even threats of physical harm.
This is particularly the case when creditors turn debts over to third parties, which will go to great lengths to collect since they are paid based on the amount they are able to retrieve from debtors. Consequently, the Consumer Bureau as well as other agencies and officials in the federal, state, and local government has received more complaints from the debt collection industry than any other.
Another facet to this problem is the Fair Debt Collection Practices Act, created to protect consumers, which was enacted nearly 40 years ago and therefore does not address the new forms of technology that have emerged since its inception. This has left room for much interpretation, creating uncertainty for debtors and collectors alike.
At the CFPB hearing, the primary issue on the table was to address third-party debt collectors. Companies should not be able to collect debt that was not owed to them. Additionally, consumers should have more control over the process of debt collection. Third-party debt collectors often have limited information – usually basic data such as the name, address, phone number, and amount owed – regarding the debt they are trying to collect. Information regarding any disputes or if the debtor has legal representation would be omitted. With such minimal information, sloppy and even fraudulent practices frequently occur.
By cleaning up the process of debt collection, consumers may have more power over their situation, relieving some of the stress and removing the stigma of distrust toward the industry.
At Atlas Consumer Law, we are well versed in handling cases regarding harassment and intimidation tactics, bankruptcy, debt discharge, and more. Schedule a consultation with us at (312) 313-1613.