Debt Collectors Beware
The Consumer Financial Protection Bureau is a powerhouse agency, created 14 months ago to regulate and oversee financial companies that often abuse consumers. Consumers are defined as people like you and me, who might seek honest financial advice and management.
Last week, I discussed some of the bureau's aggressive investigations of credit card issuers and banks because of their questionable charges and business methods. As of January 2, the bureau will have another function. It is to microscopically examine the tactics of debt collectors whose tactics are sometimes too belligerent, coercive, and intrusive. On that date, the Consumer Financial Protection Bureau will begin oversight of companies that collect money for student loans, household debt, and personal loans because of massive complaints about the tactics debt collectors employ.
The Dodd-Frank law, passed after the near financial collapse of the country in 2008, created the bureau. Under the law, the bureau has the task of ensuring that debt collectors properly identify themselves to consumers, communicate decently about the debt owed, and clearly and accurately state the amount owed. The law also requires the debt collectors to establish a process to resolve disputes with consumers in a civil way, such as by setting up installment payments on a schedule that takes into account other outstanding bills, current employment status, and other factors that determine how much a person should reasonably be able to pay.
Considering that there are over 4,500 debt collection companies in the U.S., the job for the agency is large, but it is an important one if relief from unfair debt collection practices is to be had. Businesses should be able to collect money legitimately due to them, but calls in the middle of the night and harassing messages left at employer's offices need not be tolerated, and won't be, under the new agency's rules.