The Consumer Financial Protection Bureau (CFPB) is soliciting public input on its planned revamp of U.S. debt collection standards. The new guidelines will try to balance a business' right to be repaid with consumer concerns over abusive collector tactics.
"We want to hear how we can better protect consumers and bring greater accountability to this multibillion-dollar industry without hamstringing legitimate debt-collection activities," CFPB director Richard Cordray said at a Nov. 5 media briefing. As part of that campaign, the agency is expected to write federal rules to govern creditors who perform their own collections -- who, to date, have been exempt from federal regulation -- as well as third-party collectors. The Fair Debt Collection Practices Act of 1978 applies only to third-party collectors and debt buyers.
Since the CFPB began accepting debt-collection complaints in July, it has heard from more than 5,000 consumers, Cordray confirmed. Many consumers are concerned about collectors pursuing debt that has been paid off or was never owed in the first place. U.S. debt collectors took in an estimated $54.8 billion in 2010, up from $51.9 billion in 2007. Cordray said collectors are often the most trouble to consumers who believe that the collector has "the wrong person, the wrong amount, or other wrong information." Misinformation can lead to harassment by creditors or damage to credit reports.