CFPG proposes new debt collection rules to better protect consumers

A phone ring. It shouldn’t strike fear into anyone. But for some 70 million consumers whose debt is in collections, it is not just a ring. It is an attack on their well being and their sanity. The tactics used by collectors are often unconscionable, generating more complaints than any other financial service. Of course, you understand that they serve a function. You may owe the debt, but this does not give them the right to mistreat you.

The Consumer Financial Protection Bureau (CFPB) has released a proposal for new rules to better protect the consumer. Their goal is to curb the harassment and stop the attacks on consumers who, most often, are trying to do the right thing or may not even owe the debt in the first place.

While these are currently in the proposal stage, meaning that they have not yet gone into effect, these are new rules that you need to know about. Among them debt collectors must:

  • Do their due diligence:

They would have to take reasonable steps to assure that the person who they are contacting actually owes the debt by verifying both the contact information and the existence of the debt.

  • Stop harassing consumers:

They would be cut off at 6 communication attempts per week, and consumers could request that they not be contacted at certain numbers like a work phone.

  • Be more transparent:

They would be required to disclose details about the debt and if it is too old to collect.

  • Respond to disputes:

If a consumer requests verification that the debt is owed, then the collector would have to provide it or stop contacting them.

  • Stop moving debt to avoid handing disputes:

The proposed rules would close the loophole that allows collectors to transfer the debt to another agency to avoid responding to disputes. If transferred, the new agency would not be able to collect until the dispute was resolved.

It is important to remember that the approval process is lengthy and these rules may change, but this proposal demonstrates recognition that certain behaviors are not okay. By getting informed, you can be confident that you know your rights and can protect yourself against unlawful behavior.