The CFPB & Debt Harassment
Beginning on July 21, the debt collection industry will be monitored closely by two regulatory agencies– the Fair Trade Commission (FTC) and the newly formed Consumer Financial Protection Bureau (CFPB). The FTC has been around for many years but the CFPB was created to reform the financial industry and better protect consumers, resolve widespread consumer complaints, and tighten debt collection laws. Here are a few ways consumers can hope for positive changes affecting the collection industry, including putting a stop to debt harassment.
Enforce the Fair Debt Collection Practices Act (FDCPA)
The Consumer Financial Protection Bureau will be able to enforce federal consumer financial laws, including the FDCPA. The purpose of the Act is to eliminate abusive debt collection practices such as contacting consumers outside of specified hours and using profane language in communication related to the debt. The CFPB will have the power to penalize companies that fail to comply with the FDCPA and can enforce violations of the Fair Credit Reporting Act and the Truth in Lending Act.
Review Debt Collectors’ Practices
Many Americans, as well as those in federal government, believe that financial institutions, the debt collection industry, and credit reporting companies are in need of reform to better protect consumers. The CFPB will review debt collector practices for example, and determine if their methods are abusive or unfair, but will still leave to private law firms the ability to pursue claims on behalf of individual consumers for monetary damages and private enforcement. If the Bureau deems necessary, businesses could be forced to tighten collection practices and reduce debt harassment at the hands of overly aggressive debt collectors.