|April 2, 2014|
Previously published on March 28, 2014
On March 20th, the CFPB issued a report on the more than 30,000 consumer complaints it has received regarding the debt collection market. 1 The CFPB started to accept debt collection complaints in July 2013 and these complaints quickly became the largest share of complaints received. According to the report, the top three complaints concerned:
Collectors pursuing consumers about debts they do not owe: More than one-third of the complaints concerned a debt collector continually attempting to collect a debt that the consumer does not believe is owed.
Aggressive communication tactics: Nearly one quarter of the complaints concerned debt collectors using inappropriate communication tactics. Such tactics included frequent or repeated calls, calling a consumer’s place of employment, and use of obscene, profane, or abusive language.
Threatening an illegal action: About 14 percent of consumers reported that a collector is taking or threatening an illegal action, including threats of arrest or seizure of property.
The main federal law governing the debt collection industry is the Fair Debt Collection Practices Act (FDCPA), which generally governs the practices of third-party debt collectors. The Dodd-Frank Act revised the FDCPA in 2010 to give the CFPB power to promulgate substantive rules that implement the FDCPA. The Dodd-Frank Act separately authorized the CFPB to issue rules to prevent unfair, deceptive, and abusive acts and practices, including with respect to the collection of consumer debts. In November 2013, the CFPB took its first step to exercise these authorities by issuing an Advanced Notice of Proposed Rulemaking for the debt collection industry. It is likely that the consumer complaints discussed in the CFPB’s report will factor into this rulemaking.
1 See the report at http://files.consumerfinance.gov/f/201403&under;cfpb&under;fair-debt-collection-practices-act.pdf.