The Consumer Financial Protection Bureau (CFPB) has taken the first step toward considering new consumer protection rules for the debt collection market.
Through its Advance Notice of Proposed Rulemaking (ANPR), the Bureau is collecting information on a wide array of issues, including the accuracy of information used by debt collectors, how to ensure consumers know their rights, and the communication tactics collectors employ to recover debts. The Bureau also announced today that it will begin adding consumer complaints about debt collections to its public Consumer Complaint Database.
"For decades, many consumers have reported various unacceptable practices in the debt collection industry. Today's action will allow us to hear from the public as we consider what rules are needed," said CFPB Director Richard Cordray. "We want to ensure that all players in the industry are working with correct information, that consumers are fully informed, and that consumers are treated fairly and with dignity."
There are many businesses in the multi-billion dollar debt collection market. Banks and other original creditors may collect their own debts or hire third-party debt collectors. Original creditors and other owners of debts also may sell their debts to debt buyers, who may collect on the purchased debts or hire third-party debt collectors to recover them. It is estimated that there are more than 4,500 debt collection firms in the U.S.
The main law that governs the industry and protects consumers is the 1977 Fair Debt Collection Practices Act (FDCPA). In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act revised the FDCPA, making the Bureau the first agency with the power to issue substantive rules under the statute.