Feds eye rules for debt collectors
The Consumer Financial Protection Bureau wants to hear about your dealings with debt collectors.
The CFPB is considering rules to govern debt collectors, “a loosely regulated industry under increasing scrutiny over complaints of abusive tactics,” reports Danielle Douglas for The Washington Post.
The consumer watchdog agency is soliciting comments from the public and businesses before proposing the rules, which are expected to be finalized next year. The CFPB says it’s interested in “consumer experiences with the debt collection system, and about how rules for debt collectors might protect consumers without imposing unnecessary burdens on industry.”
“While debt collection can benefit consumers by reducing the price and increasing the availability of credit, in the absence of legislation and regulation many consumers may be subject to debt collection efforts that raise consumer protection concerns,” CFPB said in its notice about the proposed rulemaking.
I’ve written quite a bit about the debt collection industry. Last summer, I wrote about one company that settled allegations by the Federal Trade Commission for calling consumers at home or on their jobs multiple times per day, even after being asked to stop or told that the person’s employer prohibited such calls.
Here are some other columns I’ve written on the issue:
Time-barred debts. Debt collectors have a limited number of years in which they can sue someone to collect. After the time runs out, unpaid debts are considered “time-barred.” Debt collectors are allowed to contact you about time-barred debts. However, under the federal Fair Debt Collection Practices Act, they cannot sue you for a debt that’s time-barred.Debt settlement. When I’m asked, “What do you think of debt settlement?” I cringe. I gird myself for a frustrating discussion with desperate debtors looking for a quick fix to a problem they’ve spent years creating. But trying to nuke your debt away in short order is just a pipe dream for most people. Only about one in 10 consumers participating in debt-settlement programs actually ends up debt-free in the promised period of time, according to a consumer alert issued recently by the nonprofit National Association of Consumer Bankruptcy Attorneys.
Providing proof. In 2011, Maryland joined a growing number of states in which judges are demanding greater proof from debt buyers before allowing them to sue consumers to recover alleged obligations.
I want to hear about your debt collection experiences. What dealings — good or bad — have you had with debt collectors? Send your comments to firstname.lastname@example.org. Put “Debt Collection” in the subject line and include your full name, city and state.
You might also send comments about your experiences to the Consumer Financial Protection Bureau at www.regulations.govto help with its rulemaking.
Michelle Singletary is a financial columnist for The Washington Post.