Feedback from consumers in Florida and around the country about their experiences with debt collection agencies is being requested by the Consumer Financial Protection Bureau. While the agency has noted that collection practices are necessary to keep credit available and interest rates low, it is concerned about the issue of creditor harassment. To find out what types of regulations are most needed and would benefit consumers, it is asking for information from the public.
Some experts believe that the debt collection industry is inadequately regulated and is not above using abusive tactics when attempting to collect a debt. Recently, the Federal Trade Commission looked into allegations that a company was calling people several times a day, both at their home and workplace. These calls were said to continue even after employers stated that these calls were not allowed. The effort by the CFPB is to find a middle ground that protects consumers without placing an undue burden on lenders and collection agencies.
Some of the issues that the agency may address in proposed rule-making include creditors exceeding statutory limits on debt collection and collectors not providing proof of a debt before taking someone to court. Lenders have to follow the statute of limitations in a particular state when attempting to sue on a debt, but they can still continue to contact the debtor. Many states also have enacted consumer protection laws that require companies that purchase consumer debt to show certain types of evidence before suing on the alleged obligations.
Even before these new rules go into effect, there are several regulations that creditors are required to follow when contacting someone about a debt, even if an individual legitimately owes the money. If a creditor is harassing someone, it may face state or federal penalties and sanctions.
Source: The Washington Post, “Debt Collection Complaints?“, Michelle Singletary, November 07, 2013