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CFPB takes debt collector gripes

By Janna Herron ·
Wednesday, July 10, 2013
Posted: 9 am ET

Consumers can now file their gripes against their debt collectors online with the Consumer Financial Protection Bureau, or CFPB.

The federal watchdog agency will take complaints related to any debt collection problems such as credit cards, mortgages, auto loans, medical bills, student loans and others starting today at 9 a.m. Consumers can file a second, separate complaint against the original creditor with the CFPB. The agency also takes complaints about bank accounts, credit cards, credit reports, money transfers, mortgages, student loans and vehicle or other consumer loans.

The agency also is providing five sample action letters for consumers to use with debt collectors. These letters will help consumers to:

  • Request more information on a debt.
  • Dispute the debt and request the debt collector prove responsibility or stop communications.
  • Restrict how and when a debt collector can contact a consumer.
  • Inform the debt collector that the consumer has hired an attorney.
  • Tell the debt collector to stop any and all contact.

The CFPB also issued two bulletins to the debt collection industry about accountability for unfair, deceptive or abusive practices and about deceptive statements over the impact of paying debt on a consumer's credit. Debt collectors must follow fair practices as outlined by the Fair Debt Collections Practices Act.

The agency said last year that it is supervising the debt collection industry, which before was regulated by the Fair Trade Commission. Unlike the FTC, the CFPB has rule-making authority over the industry, rather than just enforcement power.

"That is a really big deal. Consumers have a true watchdog on their side," says Bill Bartmann, CEO of debt collection agency CFS II. "There are 35 million Americans affected by debt collection practices. The industry needs significant rules and regulations."

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