This week, the Consumer Financial Protection Bureau released its annual report outlining how it has worked to enforce the Fair Debt Collection Practices Act. Their activities have included efforts to make it easier for consumers to file complaints, as well as greater oversight over non-bank entities that provide consumer products and services. And as of January, the CFPB also has authority over larger entities. Now, any firm with more than $10 million in annual receipts from consumer debt collection activities will be under the authority of the CFPB. Consequently, about 175 U.S. debt collectors will be under their rule.
The report finds the majority of consumer complaints are about the debt-collection industry. According to CFPB, last year more than 125,000 complaints were made about third-party debt collectors and in-house collection departments. The CFPB opened its Office of Consumer Response in July 2011. Since that time, CFPB has aided consumers by handling complaints related to credit cards, mortgages, bank accounts and services, credit reporting, private student loans, and consumer loans.
If you have a complaint for the CFPB about consumer products or services, there are several ways to make one. You have the option of complaining through an online complaint form or by telephone, email, regular mail, and fax. But how do you know if an activity violates the Fair Debt Collection Practices Act and should be investigated by the CFPB?
In their annual report on the FDCPA, the bureau includes a reminder of what a debt collector can and cannot do.
Here’s a list of six things to watch out for when dealing with debt collectors:
- A debt collector must identify himself. During all communications, collectors must state they are debt collectors and any information they collect could be used to recover the debt.
- A debt collector may not harass you. For example, a debt collector may not use profanity or abusive language.
- A debt collector may not make false threats. A debt collector is barred from making threats about what will happen to you if you don’t pay up unless he or she has the legal authority and intent to proceed with the action. In fact, the Federal Trade Commission recently shut down a collection agency that lied to customers and told some of them they would have their children taken away if they failed to pay their debts. If you receive a threat like this, report it immediately.
- A debt collector cannot request an amount that is different from what is legally required. For example, a debt collector cannot lie about or misrepresent the amount you owe. The CFPB noted that many consumers had complained about attempts to collect a debt that had been discharged in bankruptcy.
- A debt collector cannot request an amount that is not clearly authorized by your debt agreement. The CFPB says consumers should beware of a collector requesting interest, fees, or expenses that were not owed, such as unauthorized collection fees.
- You must receive written notice of your debt. Debt collectors are required to send a notice of your debt amount as well as the name of the creditor who is owed the debt. They must also state they will obtain verification of your debt and mail it to you if you happen to dispute the debt in writing within 30 days of receiving the notice.
Now that you know what is and is not acceptable behavior for debt collectors, make sure to take action if a collector violates your rights under the Fair Debt Collection Practices Act.
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