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CFPB New Years Resolution to Go After Creditors

On Behalf of | Jan 26, 2016 | Consumer Protection

The CFPB made a New Years Resolution in 2016 to crack down on debt collectors nationwide.  The agency has been using the Fair Debt Collection Practices Act (“FDCPA”) in years past in its mission to target third-party debt collectors for mistreating consumer debtors during the collection process.  But this year, the CFPB plans to also focus its effort on first-party collectors, or creditors, by relying on the Unfair Deceptive or Abusive Acts or Practices (“UDAAP”) to hold creditors responsible for conduct in violation of consumer rights during the collection process.

By leaning on the UDAAP, the CFPB can direct its focus on original creditors and evaluate their conduct in relation to in-person collection tactics, a practice that is receiving a vast number of complaints from consumers.  Previously, the CFPB could not hold first-party collectors, or creditors responsible for collection tactics that were in violation of the FDCPA because the statute is only applicable to third-party collection agencies.  According to the CFPB, creditor collection efforts must be held accountable to the same standard as third-party collectors because the result is the same, taking advantage of a debtor during the collection process.  Creditor’s collection efforts and conduct is equally as abusive.

When a creditor shows up at your door to collect a debt, it results in extreme stress and hardship on a consumer.  This conduct can result in third-party communication when a collector shows up at a consumer’s home, office or recreation area.  There is a heightened risk of communication at these places with family, neighbors, co-workers and friends.  For example, an in-person collection visit to a debtor’s home may result in the collector speaking with a child or a family friend and a visit to a place of employment may put the debtor at risk of losing his or her job if no visitors are permitted during the work day.  Under the FDCPA, outside of discussing location information, third party communication of any kind is not allowed and the CFPB is looking to hold creditors to this same standard under the UDAAP.

The application of the UDAAP to hold creditors responsible for collection efforts should serve as a warning to companies using abusive or harassing collection tactics.  In the last five years, since the inception of the CFPB, consumers have seen a substantial improvement in their rights.  The CFPB aims to continue its protection efforts and clearly will look beyond the plain language of the statutes to accomplish its goals.

If you believe your rights have been violated by a collection agency during the collection process, contact SmithMarco, P.C. for a completely free case review.