Debt Collection & Settlement

More than 4 million Americans are subject to wage garnishments for outstanding consumer debts and over 64 million people are being pursued by debt collectors, making them vulnerable to being sued for the wrong debt or the wrong amount of debt, among other predatory debt collection practices. People of color are more likely to be contacted by collectors and to be impacted by lawsuits resulting in wage garnishment and bank levies. CRL advocates for the protection of $1,000 per week in take home pay from wage garnishment and works to expose abusive debt collection and settlement practices. 

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CRL Review: “Debt Collection Agencies and the Supply of Consumer Credit”

CRL Review: “Debt Collection Agencies and the Supply of Consumer Credit”

In Debt Collection Agencies and the Supply of Consumer Credit, Viktar Fedaseyeu examines state-level data to assess the effect of state laws limiting third-party debt collectors on the availability of revolving lines of credit (i.e., credit cards). The debt-buying industry claims that this paper demonstrates that consumers are harmed by these laws and thus regulations should be rolled back, or...
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Research
Debt Collection & Settlement

State, Federal Regulator Actions Highlight Widespread Debt Buyer Abuses

State, Federal Regulator Actions Highlight Widespread Debt Buyer Abuses

Recent enforcement actions against debt buyers by state and federal law enforcement agencies illustrate widespread problems in the debt buyer market that must be addressed. The Federal Trade Commission recommends in its 2013 and 2010 reports that states adopt reform efforts to address these market problems. Based on its review of enforcement actions, industry data, and the FTC's reports, CRL...
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Research
Debt Collection & Settlement

Debt Buyer Lawsuits Expected to Drain Over $7 Million from Mainers, including $1.4 Million through Wage Garnishment

Debt Buyer Lawsuits Expected to Drain Over $7 Million from Mainers, including $1.4 Million through Wage Garnishment

Debt buyers purchase old debts from creditors for pennies on the dollar and then hire debt collectors or attorneys to force consumers to pay up, often by suing them in court. Recent enforcement actions by state and federal regulators show widespread abuse and improper lawsuits brought to try to collect the old debt. Abuses include things like robo-signing affidavits in...
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Policy & Legislation
Debt Collection & Settlement

Analysis: CRL Finds AFCC Debt Settlement Report Falls Short

Analysis: CRL Finds AFCC Debt Settlement Report Falls Short

In February 2013, the American Fair Credit Council, an association of debt settlement companies, released a report that claimed to assess the outcomes of debt settlement services by the industry. This report, "Options for Consumers in Crisis: An Economic Analysis of The Debt Settlement Industry," was commissioned by the AFCC, and fails to demonstrate that debt settlement leaves consumers better...
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Research
Debt Collection & Settlement

Testimony of Lisa Stifler Before the CFPB Field Hearing on Medical Debt Collection, December 2014

Testimony of Lisa Stifler Before the CFPB Field Hearing on Medical Debt Collection, December 2014

Read Lisa Stifler's remarks before the December 2014 CFPB Field Hearing on Medical Debt Collection on the distinct lack of standards for when a bill is sent to a debt collector or reported to credit reporting agencies. These distinctions can result in unique harms to individuals in the credit reporting context. As CFPB research has shown, consumers with medical debts...
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Testimony
Debt Collection & Settlement

The State of Lending: Debt Settlement

The State of Lending: Debt Settlement

Debt settlement companies offer the promise of settling a consumer's debt for a fraction of what they owe. The idea is simple: debt settlement companies offer to negotiate down the outstanding debt (usually from credit cards) owed to a more manageable amount so that a consumer can become debt free. Unfortunately debt settlement carries significant risks that may result in...
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Research
Debt Collection & Settlement

Comments to CFPB: Eliminate Harmful Practices in Debt Buying and Debt Collection

Comments to CFPB: Eliminate Harmful Practices in Debt Buying and Debt Collection

Responding to an Advance Notice of Proposed Rulemaking, CRL addresses harmful practices that have become common in the debt buying and third-party debt collection industries. Debt buyers typically acquire charged-off debt without any supporting documentation. Too often account information is inaccurate, outdated or missing, and third-party collectors may use abusive tactics to pursue debt that may or may not be...
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Research
Debt Collection & Settlement

Letter to OCC: Improving Documentation When Banks Sell Debt

Letter to OCC: Improving Documentation When Banks Sell Debt

CRL and several other consumer and civil rights organizations commend the Office of the Comptroller of the Currency for issuing best practices on banks' sales of charged-off consumer debt. They urge the OCC to strengthen debt management practices further by adopting strict guidance to reduce harm to American families.
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Research
Debt Collection & Settlement

The State of Lending: Debt Collection and Debt Buying

The State of Lending: Debt Collection and Debt Buying

The debt collection industry is a rapidly expanding business, with revenue increasing up to 600 percent between 2003 and 2012. Private companies buy billions of dollars of charged-off debt from banks each year. The most common type of debt purchased comes from credit cards, but debt buyers also buy student loans, medical debt and more. As the industry has grown...
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Research
Debt Collection & Settlement

A Roll of the Dice: Debt Settlement Still a Risky Strategy for Debt-Burdened Households

A Roll of the Dice: Debt Settlement Still a Risky Strategy for Debt-Burdened Households

Debt settlement[ 1] programs too often are not the solution they are marketed to be, according to this new CRL research. Debt settlement companies promote their programs as a way for debt-strapped consumers to become debt-free while paying a fraction of what they owe their creditors. However, our research shows that debt settlement program participants may be left in a...
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Research
Debt Collection & Settlement
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