A new regulation passed by The Consumer Financial Protection Bureau (“CFPB”) will hold banks accountable for their conduct when collecting debts under the Fair Debt Collection Practices Act (FDCPA”). Previously, only third party collection agencies and not original creditors, were forced to comply with the standard of conduct required under the Act. Under this regulation, banks can be held accountable for conduct and may be subject to fines for collection tactics that violate the law.
Director of the CFPB, Richard Cordray, stated that it is time to hold all parties responsible for collecting debts to the same standard as we hold collection agencies when using deceptive, unfair or abusive collection practices. The FDCPA has been in existence since 1977 and there is no reason an original creditor should be allowed to mistreat consumers solely because it is not a collection agency and not subject to the laws of the FDCPA.
This new regulation is meant to serve as a warning to banks to tread carefully and comply with the FDCPA when collecting theirs debts from consumers. The reason for the additional regulation comes following a steadily increasing number of complaints received by the CFPB and the Federal Trade Commission (“FTC”) from consumers on how they were treated by original creditors collecting debts. Specifically, last year it was reported that several banks engaged in illegal tactics when collecting credit card debts that included refusal to verify debts and falsely representing the amount of debt owed from consumers. The new regulation aims to stop this harassment and force banks to be held accountable for their conduct and give back consumers the right to be treated fairly.
If you are having problems with debt collection contact SmithMarco P.C. for a free case review.