Good news was announced earlier this week by the Consumer Financial Protection Bureau (CFPB), which said that it would begin cracking down on debt collectors across the country to ensure that they are doing their jobs in accordance with the law. The financial regulator said that it was especially interested in investigating debt collectors to make sure they are going after debtors for the right amounts of money as well as ensuring they are doing so without illegally hassling them.
The CFPB intends to accomplish its goal thanks to a series of new regulations that it says are sorely needed. The CFPB points out that existing regulations concerning the oversight of debt collectors have been in place since the late 1970s and are woefully out of date given technological advances. Examples include how some debt collectors are using text messages or social media to target and harass debtors. To skirt rules about calling at certain times, these unsavory debt collectors have resorted to other means of communication not covered under the outdated laws.
Currently, the Fair Debt Collection Practices Act says that collectors should attempt to contact people between 8 a.m. and 9 p.m. local time and avoid annoying, abusing or harassing consumers. However, experts have pointed out that this language was written more than 30 years ago, before email or cellphones even existed. The CFPB is now asking the public, as well as industry officials, to provide feedback over the next few months about whether additional rules should be added to keep pace with technological advances.
One suggestion is to follow the example of states like Massachusetts which caps the amount of times a consumer can be contacted about a debt during any given week, regardless of the means of communication. Massachusetts’ law says that debt collectors are only allowed to communicate regarding a debt twice in one week, including calls, texts or voicemails.
Consumer advocates say that there have been an alarming number of reports indicating not only harassment by debt collectors, but also harassment for debts that are either not owed or are incorrect. Studies have shown that consumers will sometimes agree to pay debts that they do not owe in an attempt to end the harassment by debt collectors.
Issues of debt collection affect a large swath of the American public, with current estimates indicating that nearly 30 million people face debt collection for their unpaid bills. The CFPB estimates that the average amount in collections is $1,400. Though the amount may not be enormous, consumer advocates correctly point out that this number does not reflect the emotional toll that indebted consumers face while coping with the overly aggressive, if not illegal, tactics by debt collectors.
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“Consumer watchdog targets debt collectors,” by Jim Puzzanghera, published at LATimes.com.