CFPB Now Supervising Debt Collection Agencies
There are a few groups of businesses that numerous people have been waiting for the Consumer Financial Protection Bureau to get in order. Probably the leading one would be debt collection agencies, which have been issued a number of tips by the Consumer Financial Protection Bureau.
CFPB tells debt collection companies a brand new sheriff is in town
Few classes of businesses are as reviled as debt collectors. Though most are reasonable enough and upstanding companies, the bad apples, as with any business or group of any sort, give the industry a bad name. Given some of their behavior, they possibly have it coming.
From 2000 to 2011, there was a huge increase in the number of complaints the Federal Trade Commission got from 13,950 to over 180,000 grievances, according to the New York Times. Of those complaints, 21 percent came from the top 100 debt collectors in the country, according to Forbes. That means smaller firms are doing much of the nasty business.
A lot of people have waited for the Consumer Financial Protection Bureau to notice and deal with the issue, and the bureau just announced its plans to do just that.
New year; new rules
Starting January 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau supervision. The agency asserts that it wants debt collection agencies will have to clearly identify themselves and disclose the amount of debt owed, as well as communicates „civilly and honestly“ with people they try to collect a debt from. Granted, people should pay their personal loans and other obligations, but that doesn’t mean they should be subjected to abuse.
The Dodd-Frank Act produced the agency and is what allows the Consumer Financial Protection Bureau to deal with non-bank financial institutions.
The only issue with it all is that small businesses are off the hook since only companies with $10 million or more in annual receipts are being viewed, according to the Washington Post. The New York Times points out that it is still going to be $12.2 billion a year viewed and about 63 percent of business, which is great. However, only 175 of the 4,500 debt collectors are represented in that number.
Not all that negative
According to Forbes, about 5 in every one million people complain even though the top 100 businesses only accounted for 21 percent of grievances. There are not that many complaints in spite of the bad news of debt collection companies.
The largest firms are the largest creditors, and it makes sense that they would be more careful with their practices. It may not be worth making rules just for them since the small businesses are making the mistakes. Still, the CFPB is working on rules to regulate the market better.
Article resource: army payday loans
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