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
Consumers can provide comments at RegulationRoom.org, a website run through Cornell Law School.
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.
See Related Blog Posts:

Comments

Post a Comment

Popular posts from this blog

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more