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Hope for New Debt Collection Rules

On Behalf of | Jul 8, 2014 | Consumer Protection

Last year, the Consumer Financial Protection Bureau (“CFPB”)
publicized it was rewriting the rules governing the debt collection
industry.  In light of its announcement the Bureau requested
input from the people who matter most, the consumers, and compiled
a list of the responses that it planned to use in drafting the new

At the forefront of its concerns, consumers and the National Consumer Law
(“NCLC”) stated that the CFPB should address limiting
the number of weekly calls from collectors.  The consumers
discussed that an excess of 3 calls a week should be considered
harassment and should be considered a violation of the law.
Furthermore, addressing issues that consumers face with modern
technology that were not issues of the past, the NCLC suggested
treating text messages and emails like telephone calls and limiting
the number placed by collectors.  Next, the CFPB
should consider a hard line approach to collecting time-barred debt
or debt that is beyond the statute
of limitations
.  The NCLC suggested that it completely ban the
collection of time-barred debt or at the very least ban re-aging of
the debt if a consumer makes a payment.

Also, in its requests of the CFPB, both consumers and NCLC complained
that collection agencies do not have enough information readily
available to them regarding the debt.  In other words,
collection agencies need to have in depth information regarding the
debt including information about the original creditor and the
original account.  From what it seems, the CFPB has listened
to consumers and to the consumer minded agencies and will make
significant changes on disclosure requirements for validation
requests received from debtors.

The CFPB also admits significant changes will be
made to legal proceedings against debtors.  Gone will be the
boiler plate pleadings and collection agencies and their attorneys
will be required to produce much more in depth information when
suing a debtor.  Information that may be required to be
presented at the time of filing could include the original account
number and creditor, the charge-off balance, the amount of the
original debt, an itemization of the charges and fees that are
owed, an explanation of the amount owed, including fees, interest
and any additional charges and the date of last payment or activity
on the account.  While it is anticipated that these changes
will take several months, consumers can certainly expect stricter
guidelines that must be followed by collection agencies and more
laws to protect them.

If you are in need of additional information and feel your
rights may have been violated under the Fair
Debt Collection Practices Act, contact SmithMarco P.C. for a
completely free case review.