The Consumer Financial Protection Bureau (CFPB) has issued a report on the more than 30,000 consumer complaints it has received about the debt collection market.
The report finds that many consumers complain that they are being hounded by debt collectors about debts they do not owe. Top complaints also include debt collectors' use of aggressive communication tactics and threats of illegal actions.
"Consumers should never be hounded about debts they do not owe," said CFPB Director Richard Cordray. "We will not tolerate companies harassing consumers or threatening illegal actions in the debt collection market. We will continue to work hard to ensure that consumers are treated with dignity and fairness."
Debt collection is a multi-billion dollar industry. It is estimated that there are more than 4,500 debt collection firms nationwide. Banks and other original creditors may collect their own debts or hire third-party debt collectors. Original creditors and other debt owners also may sell their debts to debt buyers. Debt buyers may sell the debt, collect the debt themselves, or hire third-party debt collectors to do so.
Approximately 30 million Americans had, on average, $1,400 of debt subject to collection in 2013. 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 (Dodd-Frank) revised the FDCPA, making the Bureau the first agency with the power to issue substantive rules under the statute.