Since July 2013, the CFPB has been the main federal agency tasked with accepting, compiling, and resolving consumer complaints about debt collection. But the FTC still collects those complaints through a variety of other sources. According to FTC data on consumer complaints, the share of debt collection complaints originating in a particular smartphone app has risen dramatically.
The CFPB and FTC this week said in a court brief that “actual or threatened litigation is not a necessary predicate for an FDCPA violation in the context of time-barred debt.” The brief argues that under certain circumstances, a settlement offer — and other collection activity — on an out-of-statute account can mislead the consumer and could be a violation of the FDCPA.
A judge in the US District Court for the Eastern District of New York this week sided with a debt collection agency in dismissing a case, with prejudice, that alleged violations of the FDCPA in collection letter language. The judge offered interesting commentary on the “least sophisticated consumer” standard in her opinion.
The Federal Trade Commission last week released the 2013 annual report on its Consumer Sentinel complaints collection system. The highlights: identity theft complaints once again topped the list and debt collection complaints increased very slightly to 204,644. But an analysis of CFPB debt collection complaint data shows only a fraction of the FTC’s number.
Most sellers anticipate being on the receiving end of a due diligence process. While this is accurate, I strongly encourage owners and executives to reverse the diligence process on the buyer and find out as much as possible, as early as possible.
The Consumer Relations Consortium (CRC) last Thursday submitted comments on the CFPB’s Advance Notice of Proposed Rulemaking (ANPR) for debt collection. The CRC provided a response to nearly all of the 162 questions (plus sub-questions) posed by the Bureau. In a few cases, response was left to other industry associations that are closer to those particular topics.
A jurist praised by The New York Times for his administration of credit card debt collection cases was recently the subject of a harsh rebuke from a New York appellate court for the same judicial practices.
In part two of our in-depth look at the new regulatory environment in ARM, we look at how banks have been regulated in the past and explore the key points of focus for the CFPB.
A state appeals court in Illinois earlier this month ruled that a debt collection law firm that filed a collection suit on behalf of a debt buyer not licensed in the state did not violate the Fair Debt Collection Practices Act (FDCPA) as alleged in a consumer action.
Market changes since the FDCPA’s passage in 1977 and the postcrisis shift toward regulation have opened the door to significantly enhanced consumer protections. The CFPB’s rulemaking has the potential to alter dynamics in every corner of the industry, from reducing recovery rates and limiting post-charge-off sale options and pricing to driving further consolidation by firms with sophisticated processes, systems, and controls.