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CFPB targets debt collection

By Janna Herron · Bankrate.com
Wednesday, November 6, 2013
Posted: 9 am ET

The Consumer Financial Protection Bureau is asking the public to submit comments on debt collection to help the watchdog agency consider new consumer protection rules. It is also making its database of debt collection complaints public.

The CFPB is asking about the following:

  • Accuracy of information from debt collectors, such as the amount of debt, the identity of the debtor and documentation supporting the debt.
  • How debt collectors inform consumers about the debts and their legal rights under the Fair Credit Reporting Act.
  • How debt collectors communicate with consumers, including how often they contact consumers, through what types of communication and what they claim (and if it's accurate).

The agency has set up an online website in conjunction with Cornell University at RegulationRoom.org to collect comments and offer a forum for discussion.

"It's the very first time we have a national agency that has rule-making, not just rule-enforcing, authority," says Bill Bartmann, founder and CEO of debt collection agency CFS2. "The industry needs significant rules and regulations. Debt collectors have been free to roam around, close up shop in one state if they get in trouble and move to another."

The CFPB is also publishing more than 5,000 debt collection complaints it's received and processed since it started collecting them in July. The database will show:

  • What the consumer complained about.
  • Why, how and when the debt collector responded.
  • If the response was timely.

The database will leave out the consumer's identity and any personal information.

The agency said the daily volume of debt collection complaints equals that of mortgage complaints and together make up 30 percent of all consumer gripes.

The most common grievances from the complaint database include debt collectors' practices such as unwanted or harassing phone calls or lack of notice of debt; the underlying debt that hasn't been verified or was already paid or settled; and learning about the collection after it appeared on a consumer's credit report.

Consumers can submit a complaint online to the CFPB regarding bank accounts or services, credit cards, credit reporting, debt collection, money transfers, mortgages, student loans, vehicle loans and other consumer loans. The agency then will help facilitate a resolution between the consumer and company.

Follow me on Twitter: @JannaHerron

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2 Comments
Bettie Mccoy
December 04, 2013 at 2:22 pm

What is the procedure when you signed up with a debt collection
agency & they turn your accounts over to another agency for them
to withdraw the amounts from the accounts with our permission, but the agency has a new checking system that we were
not told about. We do not want to be garnished since we need out
jobs & the money. Also we need to know how can the agency removed
the last four number on a check & replace them with four others.

Marcia Jackson
November 06, 2013 at 11:17 am

When someone lists your name as a contact in case the consumer does not pay their debt...How many times can a debt collector call your home once you tell them you know nothing about the debt or debtor? One collector stated..."If they put your name down as a contact, you must know them." That is not true. I've asked them not to call but they continue to do so. I do not appreciate these people calling my home about someone else's debt. Thank you for looking into this.

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