Debt Collection Agencies To Be Supervised By Fed
The CFPB said Wednesday it finalized plans to oversee larger firms in the industry to make sure debt collectors treat consumers fairly, Reuters reported. It will also monitor debt collectors that contract with the Education Department to collect overdue student loans, the Times reported.
According to Reuters, the CFPB will also determine whether debt collectors properly disclose the amount owed, maintain accurate data about consumer debt and address consumer complaints quickly.
The bureau was created under the 2010 Dodd-Frank financial law to oversee consumer financial products including mortgages, student loans and credit cards.
From the Times:
The industry accounts for a large portion of consumer complaints to the Federal Trade Commission, which enforces restrictions against abusive practices. The F.T.C. said it collected more than 180,000 complaints about debt collectors in 2011, up from 13,950 in 2000
“There has been an explosion of shady debt collection tactics in recent years,” Suzanne Martindale, a staff attorney for Consumers Union, said. “Businesses have a right to collect what they are owed but not to harass consumers for debt that has been already paid off or doesn’t belong to them.”
Debt collectors have said the number of complaints increased primarily because consumers can file them online.
CFPB Director Richard Cordray said in a statement, “We want all companies to realize that the better business choice is to follow the law - not break it.”
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