The Consumer Financial Protection Bureau is about to make it a lot tougher for debt collectors to conduct abusive practices against consumers. Among the agency’s new proposal are capping collection calls, making it easier for consumers to dispute debts and forcing companies to clarify their data on consumers.
Under the CFPB’s proposal, debt collectors would have to collect some minimum information on consumers before initiating a collection. That includes properly and fully determining a debtor’s full name, last known address and phone number, account number, date of default, the amount owed at default, and the date and amount of any payments or credits applied after they defaulted.
According to a recent CFPB study, about one-in-three consumers had been contacted by a creditor or collector trying to collect a debt within the past year.
“We are considering proposals that would drastically overhaul the debt collection market,” said CFPB Director Richard Cordray in a statement. “This is about bringing better accuracy and accountability to a market that desperately needs it.”
Debt collection generates more complaints to the CFPB than any other financial product or service. The most common complaints are about collectors seeking to collect debt from the wrong consumer, for the wrong amount, or debt that could not legally be enforced. When consumers are contacted by collectors for debt they do not recognize, they often do not know what to do next.
Under the new rules, debt collectors would also have to limit to six communication attempts per week through any point of contact before they have reached the consumer.
“In addition, if a consumer wants to stop specific ways collectors are contacting them, for example on a particular phone line, while they are at work, or during certain hours, it would be easier for a consumer to do that,” the CFPB said.
The CFPB is also considering proposing a 30-day waiting period after a consumer has passed away during which collectors would be prohibited from communicating with certain parties, like surviving spouses.
Here is an outline of the proposals under consideration.