FICO Bankinganalyticsblog advises debt collection industry to come clean on debt collection practices. Now is the time to share your insights with the Consumer Financial Protection Bureau (CFPB). On November 12, the CFPB published an advance notice of proposed rulemaking (ANPR) in the Federal Register requesting information from the public on a wide range of debt collection practices and related issues. This information will guide the CFPB in what is expected to be new rulemaking in this area.
Since its inception, the CFPB has placed reforming collections and recovery practices high on its priority list. In October 2012, the CFPB brought its first enforcement action involving misleading debt collection practices, mandating a substantial $85 million refund to consumers. During the same month, the CFPB issued its Larger Participant Rule, establishing supervisory authority over 175 debt collectors with more than $10 million in annual receipts resulting from consumer debt collection. In doing so, the CFPB became the first federal agency to routinely supervise debt collectors, including: firms that may buy defaulted debt and collect the proceeds for themselves; firms that may collect defaulted debt owned by another company in return for a fee; and attorneys who collect debts through litigation.
More recently, in July 2013, the CFPB published two bulletins addressing debt management practices and also began accepting complaints from consumers. The first bulletin makes clear that any entity, whether a third-party collector or a creditor collecting its own debts, can be held accountable for any unfair, deceptive, or abusive practices in collecting a consumer’s debts. The second warns companies to avoid deceptive statements concerning the impact of paying a debt on a consumer’s credit score, credit report, or creditworthiness.
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Source: FICO Bankinganalyticsblog.fico.com