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CFPB to look at debt collection

By Marcie Geffner · Bankrate.com
Monday, November 11, 2013
Posted: 4 pm ET

The Consumer Financial Protection Bureau has turned its attention to debt collection companies, opening its public consumer complaint database to this type of financial service and collecting information about debt collection practices.

In a statement, CFPB Director Richard Cordray said consumers have reported "unacceptable practices" in the debt-collection industry for decades, and more oversight is needed.

"We want to ensure that all players in the industry are working with correct information, that consumers are fully informed and that consumers are treated fairly and with dignity," Cordray said.

The CFPB is looking at three areas of special concern.

One area of concern is the accuracy of information that's transferred from the original creditor to the debt collector and from the debt collector to other debt collectors and credit reporting bureaus.

“The CFPB wants to know how documents and records are currently transferred and how to improve the accuracy of that information,” the agency said.

A second area of concern is whether consumers understand their rights in the debt collection process. The CFPB is concerned that current consumer disclosures might be confusing or incomplete.

A third area of concern is that of debt collectors' communication tactics. The CFPB wants to make sure that debt collectors treat consumers fairly and with respect.

Federal laws prohibit debt collector from harassing consumers, but the CFPB is concerned that some debt collectors call consumers continuously; call them at work; use email, smartphones, fax machines or social media to contact and falsely threaten to sue them; garnish their wages; damage or ruin their credit; seize their property; get them fired from their jobs; or even have them jailed.

The CFPB already has established supervisory authority over larger nonbank debt collectors, issued bulletins to clarify existing consumer protections and published sample letters that consumers can use to deal with debt collectors.

Follow me on Twitter: @marciegeff.

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2 Comments
Lenzy King
November 14, 2013 at 10:02 am

A lot of credit card companies hold on to a canceled credit card that may have a dollars worth of debt for years, never sending a bill to let the owner of the card know there are charges on it. In the meantime the interest do it's thing for years and finally one day you get a notice, to satisfy this debt we will accept X number of dollars...you're saying "hey!if I do owe this I'd like to clear this up". You send in the money, never get a reply. Years later you get another one from another collection agency regarding the same card with an inflated debt worse than the last time. What can be done about this?

Carol Edmonds
November 12, 2013 at 8:14 am

Consumer debt collectors spend too much money going after small debts,and should concentrate more effort on collection of larger sums of money! If the amount owed is less than $100.00,constant mailings are a waste of resources better spent on other things,like credit card fraud investigations!

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