New Debt Collector Regulations on the Way?
While many Americans do suffer from legitimate debt problems and worry about being harassed by debt collection agencies, others often are falsely targeted by debt collectors. Regardless of whether you owe the debt or not, you don’t deserve to be harassed by creditors, and you have certain protections under the Fair Debt Collection Practices Act. According to an article in The Morning Call, the Consumer Financial Protection Bureau (CFPB) plans to consider new rules aimed at “protecting consumers from unfair and harassing debt collectors.” In fact, the CFPB has asked consumers to provide it with information about their debt collection experiences, which it will use to “determine what rules would be appropriate to protect consumers who are subject to debt collection,” according to a news release from the CFPB.
What led to the CFPB’s interest in new rules for debt collection? And how will they work?
Who’s Being Targeted by Debt Collectors?
The CFPB’s heightened interest in debt collection might stem in part from harassment victims like Dorothy Smith, according to the article in The Morning Call. A Pennsylvania resident, Smith began receiving harassing phone calls from Portfolio Recovery Associates in January 2013—a year ago to date. In the early calls, Portfolio Recovery Associates informed Smith that she owed almost $8,300 on a home-improvement loan. Smith informed the company that she didn’t owe the debt—the debt had belonged to her ex-husband and hadn’t been borrowed during their marriage. The harassing calls continued until Smith filed a lawsuit.
Even when a person legitimately owes a debt, collection agencies have a duty to do their jobs “fairly and accurately,” according to the CFPB Director Richard Cordray. Cordray emphasized the serious harms that arise from bad debt collection practices: “Consumers can be harassed over a debt that is not theirs or that they do not recognize because the information is wrong.” Indeed, “credit reports may be marred by misinformation,” and sometimes consumers even “end up paying amounts they do not owe.”
Are some groups more susceptible to these harms than others? Many older adults are becoming targets for debt collection harassment, and they’re being asked to settle debts that “are too old to collect, are inflated amounts, are owed by others, or aren’t owed at all.” At the same time, debt collection companies can harass consumers of any age group. In fact, the CFPB reports that it has seen more complaints about debt collection practices than any other consumer matter.
What can be done to help?
CFPB Asks Consumers to “Weigh In” on Debt Collection Methods
In response to the high number of complaints it has received about bad debt collection practices, the CFPB began asking consumers to provide their stories to the Bureau. In early November 2013, the CFPB issued an Advance Notice of Proposed Rulemaking and explained that it would be considering new rules for the debt collection industry. But before making those new rules, the Bureau emphasized, it wants to hear from consumers about their own experience with debt collection and the ways they’d hope to be treated by these companies.
The news release made clear that “getting input from the public—you—is an important part of the process.” What kind of information is the CFPB hoping to obtain? It articulated that it’s especially interested in learning more about the following:
· Accuracy of information in the debt collection process
· Consumer knowledge and awareness about their rights surrounding debt collection
· Whether consumers have been treated fairly be debt collection agencies
In the meantime, you may be able to take legal action if you have been harassed by a debt collection agency. You should contact an experienced Illinois consumer attorney today to discuss your case.
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