(First published at http://www.westopdebtcollectors.com/blog/us-consumer-bureau-plans-to-crackdown-on-abusive-debt-collectors.html) There are more than 4,500 collection firms in the United States. While many debt collectors follow the rules laid out under the Fair Debt Collection Practices Act (FDCPA), there are others who do not because they did not fall under the FDCPA’s jurisdiction. Debt collection complaints are common, with more complaints made against debt collectors to the Federal Trade Commission (FTC) than any other industry.
People who are being harassed by debt collectors may soon have some relief. The Consumer Financial Protection Bureau (CFPB) will now be taking complaints about abusive debt collection practices with regards to all types of consumer debt collection made by original creditors, including credit cards, mortgages, auto loans, medical bills, and student loans.
The debt collection practices of banks and lenders have existed in a regulatory limbo since the federal law that governs how companies can pursue consumers who are behind on their bills does not apply to debt collectors who are attempting to collect on money that was lent to a consumer directly. Therefore, these types of lenders could harass consumers who were behind on their bills with practices that are restricted for other debt collectors by the FDCPA.
Complaints made by consumers will be forwarded by the CFPB to the collection agency involved. The collection agency will then have 15 days to respond with what they have done or what they plan to do. The CFPB expects that by using this system, all but the most complicated complaints will be resolved within 60 days.
Five action letters have also been developed by the CFPB. Consumers can use these letters when they correspond with debt collectors. The use of these templates are designed to help consumer obtain more information about the debt collector’s claim, help consumer dispute the debt, or have the debt collector limit or stop communicating with the consumer.
The CFPB intends to hold any company that collects a debt and falls under its jurisdiction accountable for any unfair, deceptive, or abusive practices. This includes original creditors, debt collectors hired by creditors, or third-party collects that have bought old debt. The CFPB has also warned collectors against making statements that could be considered deceptive. Specific practices have been listed that could be illegal. Such practices include:
- Threatening action when the debt collector does not have the authority to follow through. Such action could include false threats of lawsuits, arrest, prosecution, or imprisonment for not paying on the debt.
- Not being truthful when representing the character, amount, or legal status of the debt.
- Presenting a settlement offer that represents that a consumer’s debt would be waived or forgiven if the consumer accepted the offer, when the company is not actually going to forgive or waive the debt.
- Improperly posting payments or credit to the account of a consumer and then charging the consumer late fees.
Under this new policy, federal law will now include creditor banks, extending FDCPA protection to include not only companies that have bought debts from the original creditors but also to companies that are collection on loans that they made themselves. This will provide many consumers who are experiencing harassment by debt collectors some much needed relief.
We understand the frustration you may have when dealing with an aggressive debt collector. We have been successfully representing those abused and taken advantage of by debt collectors for years, and have a long list of successful stories to share with you. We offer a FREE CASE REVIEW for you to assess whether we can assist you with your matter. Please do not hesitate to contact us toll free at 1-800-875-3666 if you prefer to talk to a trained professional over the phone instead, or of course, visit our website at http://www.westopdebtcollectors.com/.