CFPB Planning Tougher Rules on Debt Collectors
The scrutiny continues to increase on the debt collection industry.
Today, the Consumer Financial Protection Bureau (CFPB) issued a notice of proposed rulemaking to upgrade the regulations governing debt collection. It is asking for public and business feedback before proposing new restrictions on debt collectors. Debt collection has looser regulations that have not kept up with innovations and changes in the industry.
Through its Advance Notice of Proposed Rulemaking (ANPR), the CFPB is gathering information on a variety of issues including the tactics that debt collectors use to collect debts, the accuracy of information used by debt collectors and helping consumers know their rights.
Government regulators, including the Federal Trade Commission, have always received a significant number of complaints about debt collection. In fact, CFPB director Richard Cordray said that the bureau has received approximately 5,000 complaints since the Bureau began accepting complaints in July. As a result, the CFPB is adding consumer complaints about debt collections to its public Consumer Complaint Database.
The bureau wants to know if creditors and collection agencies are providing accurate information about their outstanding debts. It also will study how information is transferred from an original creditor to a credit bureau, third-party debt collection firm or debt buyer because it wants to improve accuracy of information. The CFPB is also curious if the agencies are making threatening calls at all hours of the night or dragging people into court for money they do not owe.
“For decades, many consumers have reported various unacceptable practices in the debt collection industry. Today’s action will allow us to hear from the public as we consider what rules are needed,” said Cordray in a statement. “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.”