The Consumer Financial Protection Bureau (CFPB) is warning banks, payday lenders, finance companies, and other lenders that falsely representing the size of a consumer's debt or their legal right to collect the money or engaging in other questionable practices is against the law. The agency is extending consumer-protection laws that apply to debt collectors to banks and other lenders as well, meaning that they will be held liable for falsely stating that consumers owe a debt when it has expired, failing to properly credit payments to consumers' accounts, threatening imprisonment or prosecution for unpaid debts, and other violations. Lenders also will be warned that they cannot state that repaying a debt will boost a consumer's credit score, and debt-collection complaints will be accepted by the agency's consumer complaint database. "We will be working to ensure that everyone collecting on consumer debts is following the law," says CFPB Director Richard Cordray.
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