Closed Rule

Consumer Debt Collection Practices (ANPRM)


The Consumer Financial Protection Bureau (CFPB) might propose new federal rules on how creditors and debt collectors can act to get consumers to pay overdue credit card, medical, student loan, auto or other loans. This decision matters to you if you

  • had an experience with debt collection (good or bad)
  • counsel consumers with overdue debts
  • have a business where you do your own account collection or
  • work in the debt collection industry

Here, you can learn what CFPB is thinking and what it needs to know. You can share information and experiences and discuss ideas with others. At the end of the discussion, CFPB will get a detailed summary and your input will help it decide what to do next. (This phase is for gathering information and brainstorming. The next phase would be where CFPB comes up with specific proposals and asks people to comment again before it decides whether to adopt those proposals as new regulations.)

Consumers and business both have a stake in effective, responsible debt collection practices. Don't be a bystander. Help CFPB make the right decisions about new consumer debt collection regulations. Share what you know and encourage family, friends and coworkers to do the same.

Discussion Making sure debt collectors & buyers have info about the debt - 41

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1|What's happening now? - 15

Agency Proposal

At a joint FTC-CFPB Roundtable, many participants supported uniform national standards for the kinds of information about a debt that must be transferred to a debt buyer or collector. (See 2013 FTC-CFPB Roundtable.) Not having accurate and complete information can harm consumers, debt owners, and collectors if it leads to collection efforts against the wrong person or for the wrong amount. (See 2009 FTC Modernization Report, p. 21-24.) But people had different ideas about what specific information should be included.

As a first step in thinking about uniform standards CFPB is looking for information about what's happening now:

When debts are sold: What kinds of information are typically transferred now to debt buyers? Does it depend on the type of debt (for example: credit card, student loan, auto loan)? Does the sale price of a debt vary depending on how much information the seller provides? How about when buyers resell debts?

To and from collectors: What types of information do creditors typically make available to the collector when they put a debt into collection? What kinds of things do collectors learn while trying to collect the debt? Do they pass this information back to the debt owner?

Monitoring: Do debt sellers monitor what buyers do after the debt has been sold? Do owners monitor what happens to their debts in collection?

See what CFPB said in the ANPRM about Information Transferred between Debt Owners and Debt Buyers or Third-Party Creditors.


Commenting is now closed.

To avoid consumers getting sued repeatedly on the same debt, the CFPB should require or encourage states to adopt rules requiring that judgments be preclusive of future consumer-collector litigation on the same debt; instead, if there is a dispute between assignees as to who has title to the debt, they should work it out between themselves instead of risking subjecting the consumer to multiple liability.

Absolutely and it should be the kind of information this is admissible in a court of law.

More information does not help when lawyers refuse to perform even the most basic due diligence as required before they affix their signature to, and, submit court paper (whichh are legal affidavits) to Clerks. As it stands now, most judges will not hear motions for sanctions under rule 137, and most lawyers will not file motions for sanctions against their colleagues. However, some mechanism has to created to give power back to those wrongly accused of owing debt, such that there are serious consequences for lawyers who recklessly abuse the court process and harm the personal and professional reputations of innocent citizens.

CFPB can't regulate general rules of practice for attorneys. Under the FDCPA, they can issue rules prohibiting debt collectors from using “false, deceptive, or misleading representation or means in connection with the collection of any debt” or “unfair or unconscionable means to collect or attempt to collect any debt.” One of the principal purposes for the validation notice, under the FDCPA, was to “eliminate the recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid" (See the ANPRM Validation Notices, Disputes, and Verifications (Section 809 of the FDCPA)). See also the post on the "validation notice" sent to consumers.

I would suggest a review of the language already published in the Federal Rules of Bankruptcy BR 3001( effective date 12/1/2012) relating to documentation. Based upon my participation with the Rule and numerous comments/hearings, I believe some time can be eliminated without re-inventing a different set of standards. Bankruptcy involves collection and involves consumers including attorneys on both sides as well. I recommend another examination of the "validation" notice language and the litany of interpretations of the language. If the notice is sent and certainly should be, what happens if there is no response from the debtor? Can the debtor say the notice was not received and if the collector does not get a response after 30 days is this an admission the debt is valid?

Agreed the debt companies usually reply with improper validation and verification which is already in their computer.

The price of paper (bad debt) varies depending on the collectability of the debt based on info known about the debtor and also varies based on the amount of documentation purchased from the original creditor. Most debt buyers only pay for a couple of recent credit card statements. They may provide a "bill of sale" but these never identify a specific account being sold and reference a master purchase contract which is never provided.

I work in healthcare and believe there should be standardization. I had to be readmitted for a medical problem, the result of a procedure gone bad and ended up with a hospital acquired condition. The result, a $110,000 hospital bill. After insurance, the physician agreed to write-off the balance. The hospital added insult to injury and pursued collections. Government payers do not reimburse for negligence nor is the beneficiary responsible.
Another issue. . . this has happened to me on a couple of occasions. In this instance, I had a MRI, received the insurance EOB and paid the balance. That should have been the end of it. Two plus years later I receive a notice for the balance, which should have been the contractual allowance. When I called the collection agency all they knew was that the MRI business had closed and turned my balance over to them as bad debt. They were able to see both the insurance and my payment. However, since they didn't have the insurance EOB, they suggested that I contact the insurance company and obtain a copy. Why is it the consumers responsibility to chase down information, it feels like I am doing their job. There should be standards for turning over collections to a agency. If the provider is going to send a bill to bad debt, they should have to supply a file the with all the information. In this case, the claim and itemization (1500 and/or UB) the insurance EOB and/or COB and all notes pertaining to the claim. Maybe having to provide all the required documentation would allow the provider review the claim to determine whether the balance is the patient's responsibility.

Welcome to RegulationRoom, Deb 27804, and thank you for suggestion on what specific documents should be transferred to a new owner when a debt is sold. We hope you’ll visit our topic page on the validation notice send to consumers and comment on what information you believe consumers should receive from collectors.

I strongly believe when a lender sells a debt to a JDB, that payoffs or settlements made to the JDB will reflect payoff /settlement in the original lenders internal records.

Thank you for commenting and welcome to RegulationRoom, DVD. It sounds like in your experience, it is common for a debt buyer to inform the original lender of payment or settlement. What do others think? Is this a common practice?

A recent case filed by the Colorado Attorney General in the District Court 11/25/2013 against four entities encompasses what is wrong from selling debt by two financial banks, to a debt buyer, and then collection by an agency and law firm on why oversight/rules/actions must take place and should have been in the past. Two important points. First the complaint is an allegation as of now. The second is the complaint isn't representative of the number of debt buyers and collection agencies/law firms in my opinion. It does reflect why rules must be established and enforced against those who do not conform to the laws and regulations. It also shows the need of better controls and due diligence by banks who sell accounts and be held accountable even though the accounts change ownership. It is long overdue to place accountability and responsibility to bad players, and include individuals who manage the enterprises from start to finish.

I am currently going through a miserable experience with a creditor and debt collector. In 2004 I completed my college education and consolidated all of my student loans through Nelnet. In 2005 (or so) I started to get calls from debt collectors stating that I was delinquent on my loan repayment. I explained the situation, that I had made all of my timely payments through Nelnet and, before I would pay anything else, I would need to see some proof of the debt. I never received any proof of the debt and this conversation reoccurred several times for the next five years.

In 2011 I wanted to buy my (wife’s) dream home. It was a significant purchase and the bankers I talked with indicated I needed to clear up the student loan issue to be approved. I reached out to the original creditor and the debt collector and begged for some proof of the loan. They then provided me with a loan application (nothing to indicate that the application was approved or that any funds were ever dispersed to me). While I was not comfortable with the proof, I knew that fighting it out in court would take longer than I was willing to take. So, I was very purposeful in my conversations with the original creditor and the debt collector to make sure that the issue would be cleared on my credit report if I paid the full value of the (alleged) loan. I also recorded the conversations I had with the original creditor and the debt collector.

I paid the original loan amount and (if you didn’t see this coming) the original creditor refused to update my credit report. And, even after providing the credit reporting agencies with proof that the debt was paid, they also refused to update my credit report.

To make matters worse, after the debt was paid, I received a notice from the debt collector that several thousands of dollars had been excused. I immediately contacted the debt collector and requested documentation that would support their amount due, including documentation where I agreed to a specific interest rate. No response from the debt collector.

So, I am now arguing it out with the IRS regarding any additional taxes that may be due. And, even though I paid the debt two years ago, my credit report has not yet been updated.

It is simply ridiculous than any business would have this much power to have such a negative impact on an individual without any documentation to back it up. Any creditor should be required to provide certain documentation prior to making a negative credit reporting and there should be significant consequences for any creditor/debt collector that pursues a debt without having the required documentation.

Debt collectors call and cannot verify that the creditor has merged with another company. The debt may have written off the books of the acquired company. I propose that the CFPB implement a rule pertaining to debts written off by an acquired company and any additional stipulations on a timeframe to which an old debt can be collected only if the consumer has been validly notified that the debt has been sold to a debt collection agency; excluding the initial call from the DCA

Merging all types of debt collectors into the same introductory phrase is actually more confusing to the consumer than knowing the actual standing of the debt collector by how they introduce themselves.

Maybe it is time to better delineate who it is that is calling. Instead of the most commonly used phrase of "This is a Debt Collector calling"...

How about, "This is a Debt Collector calling on behalf of (name of credit card)...", OR, "This is a (name of credit card company) debt collector calling"...

Example, "This is a debt collector calling on behalf of a Bank of America debt...", or, if the debt collector is actually employed by Bank of America, "This is a Bank of America Debt Collector calling...".

And then there is the nuance of a debt that has or has not been sold to the first debt collector, perhaps whether the debt has been sold should be stated upfront as well.

Perhaps "This is a third party debt collector..." should be used for debt that has been sold twice, and so on.

2|Info about disputes and verification - 6

Agency Proposal

If the consumer disputes the debt within 30 days of getting a validation notice, the collector must "verify" the debt. (See When consumers dispute a debt). Also, if the debt has been disputed, the collector can't report the debt to a consumer reporting agency without saying that it is disputed (FDCPA § 807(8)).

  • Owners to buyers and collectors. Do debt owners typically tell debt buyers or collectors that a debt has been disputed? If so, do they provide information about what the dispute was about, whether it was investigated, whether consumers provided information or documentation in the dispute, and whether the debt was verified?
  • Collectors back to owners. What kinds of things do collectors learn while trying to collect the debt? Do they pass this information back to the debt owner?
  • Costs. What expenses and problems would be involved with requiring debt owners to give debt buyers and collectors access to information about disputes? What about a rule requiring debt collectors to provide dispute information to the debt owner?
  • Benefits. How would such rules benefit consumers? debt owners, buyers or collectors?
See what CFPB said in the ANPRM about Information Related to FDCPA Provisions.


Commenting is now closed.

I believe the most significant problem is due to financial institutions having two systems that are not fully integrated. One is the system of record that contains account level information and the second is a charge off system that is used to track events that occur after the account is charged off. Events that occur on the charge off system are normally not reported to the system of record. Also, charged off system does not or is not used for credit reporting. The second problem is a result of mergers and/or acquisitions where the financial institution only converts the system of record and not the acquired charge off system. This leaves a void as to the particular status after the account was charged off. As accounts are outsourced or purchased the reliance of information resides on the system of record and NOT the charge off system. The third problem involves a consumer who has more than one account with the original lender so the risk of one account going to a different agency or debt buyer is highly likely. Even if access by the debt buyer and collector is available, the events that took place on the account are normally not recorded in the system of record and the charge off system may have been decommissioned. As to the issue of credit reporting of disputes depends upon whether an agency or debt buyer furnish data to a credit reporting agency. The amount of consumer data currently and in the past reported to credit reporting agencies may not be accurate specific to charged off accounts and to require a chain of title would be expensive and the likely hood of accuracy would still not be achieved. Going forward I think the first focus must be on credit reporting accuracy.

My client needs to see a particular doctor. When she called his office she was informed that she needed to pay on her account of $278. She was not even aware that she had a balance there - she had never received a bill from this office and when she asked when this bill was from, the gal told her 1986. They claim they never turned it over to a collection agency but the client filed bankruptcy in 2005. It is listed in her bankruptcy but the doctors office won't forgive the bill. What is the client supposed to do? If a debt owners want to collect on debts they need to send out bills so families know they have bills due, that only makes sense. My client is disputing the bill, but with no luck so far.

Welcome to RegulationRoom Christine Grosse, and thank you for your comment. CFPB values information about consumer experiences like your client's. Would you share more details with us? You may be interested in reading and commenting on what CFPB has to say about old debts.

I had an issue where an attorney,acting on my behalf,requested verification of the loan debt and never heard back from the collector.Therefore can not move ahead with settlement until they respond. Any thoughts?

Welcome to RegulationRoom, Jay. We can't provide legal advice (see more about the RegulationRoom project), but you can submit a complaint to CFPB. They will forward your complaint to the company and work to get a response from them. You may also want to comment on CFPB's questions about what should happen when consumers dispute a debt.

As there can be a substantial monetary impact from incorrect entries on a credit report in the form of higher interest rates or being unable to secure a loan, - bonafide disputes should NOT be allowed on a credit report.

3|Info about consumer preferences and status - 6

Agency Proposal

Consumers have the right to tell collectors

How often do collectors who get these kinds of requests keep track of this information and pass it back to the debt owner? How often do debt owners who learn about consumer preferences transfer this information to debt buyers or later debt collectors?

Other kinds of information about the consumer could be important in the collection process:

How often are these kinds of information transferred among debt owners, buyers and collectors?

What would be the costs and benefits to debt owners, buyers and collectors of a new federal rule that would require some, or all, of these kinds of information to be kept track of and transferred? Which of these kinds of information would matter most to consumers not to have to repeat to debt owners and collectors over time?

Read what CFPB said in the ANPRM about Information Related to FDCPA Provisions and Additional Information.


Commenting is now closed.

Wow, I didn't even know we had those rights--except for the one about the workplace, they're all news to me. So I've no experience, but my guess would be that the debt collectors would rather not receive this information.

Bonita, out of the information listed, is there any type of information that you feel particularly strongly about requiring debt owners and collectors to have on file at all times?

The most important would be not to call at work. That's really the most important to the collectors, too, because a person out of work isn't likely to pay.

I used to have a lot of debt and told every single company that called to send me something in the mail. I paid every single debt that I received mail for. Years later someone went after me and me, not knowing the rules, got stuck with it. I still have not seen anything in writing to even verify what the debt is for - and the court wasn't any better - I didn't even have a chance to talk to the judge. How is this right?

Welcome and thank you for sharing your story, JClark53. That sounds very frustrating. Collectors are currently required to send consumers a “validation notice” within 5 days of first contacting them. You can read more about that process and comment on issues about the validation notice at the topic titled, The "validation notice" sent to consumers.

The credit reporting agencies buy and sell consumer data and should be obligated to list preferred communication methods times (if applicable) and language (if applicable) which the collection agency must abide by.

4|Documentation - 4

Agency Proposal

Documentation could include original signed contract/agreement (or e-copies), account statements, terms and conditions, account applications, payment history documents including periodic or billing statements and payment receipts, the charge-off statement, statement of all charges and credits after the last payment or charge-off.

In thinking about uniform rules about access to documentation, CFPB wants to know:

  • Current practice. What documentation do collectors generally have access to now? How is their ability to access documentation restricted -- and do these restrictions prevent collectors from checking documentation when it would be in consumers' interest for them to do so?
  • Last statement. One possible new rule is that, along with the validation notice, consumers must get the last periodic or billing statement from the original creditor. (To discuss this idea, go to The "validation notice" sent to consumers--Info that might help consumers recognize the debt). The question here is whether the benefits of giving debt collectors and buyers access to these documents would be worth the costs even if the documents don't have to be included with the validation notice.
  • Other documents. What types of documents would it be useful for debt buyers and collectors to have when they interact with consumers? How do the costs of getting access to those documents compare with the benefits to consumers and/or to debt buyers and collectors?
See what CFPB said in the ANPRM about Documentation (Media).


Commenting is now closed.

I would suggest a visit to the Federal Bankruptcy Rule 3001(effective 12/1/2012) and comments made during the proposed period, plus the hearing presentation statements published and are available. The Rule already addresses documentation issues.

I again see that attaching all of the proposed documentation to the validation notice is not productive for the consumer or the sender. I do believe additional documentation as to chain of title be available if a consumer is being sued in Court.

Some useful documents would be the last three collection notices ACTUALLY sent to the consumer. Too many collection agencies have claimed they sent me regular notices regarding the debt when I have not have any contact with them for 2 - 3 years. But they claim they have "records" that claim otherwise. Yet, there is no supporting documentation of such efforts. like say, copies of the notices.

I think probably the benefits of giving debt collectors and buyers access to these documents would NOT worth the costs unless the documents have to be included with the validation notice. If the debt collectors were anxious to be sure they had the right debtor, sure, great. But I don't think they are. The actual guy on the phone is only anxious to get the money; he doesn't really care where it comes from or whether the debt is legal. Giving him the information, without giving it to the debtor, probably wouldn't be much good.

And maybe I'm being unfair. Maybe these companies are strict about making sure the debt is collected from the right person.


The collection agency should be able to furnish all of the documentation listed in the proposal upon request.

5|Technology - 5

Agency Proposal

Technology can make it easier and cheaper for creditors, debt buyers and collectors to share information and documentation. (See 2009 FTC Modernization Report p. 17-18; Transcript of 2013 FTC-CFPB Roundtable).

Would sharing information and documentation through a central data repository be useful and cost effective for the debt collection industry? What would be the costs, and benefits, of

  • creating a unique identifier for each debt to assist in tracking information related to that debt?
  • allowing consumers access to information about their debts?

Should CFPB issue new rules or in other ways facilitate the creation and use of repositories?

What rights should consumers have to see, dispute and obtain correction of information in repositories?

Read what CFPB said in the ANPRM about Technological Advances.


Commenting is now closed.

The idea is sound in principle, but as any technology geared towards convienance, there are risks against privacy encouraging identity theft.

Having creditors, collectors, and consumers come together "on the same page" regarding debt would be fantastic for everyone involved.

But any technology which accomplishes this needs to be very secure with very strict authentication requirements to ensure *only* the relevant parties can view information concerning the debt.

Otherwise, not only thieves would have access to this information - but also non-criminal third parties, who may never have learned of such information due to the protection of consumer privacy laws.

Knowledge of the debt and money owed would need to have the same level of security afforded to consumer reports and information within a consumer report (as defined in the FCRA).

I see a some potential risks. First, disclosure requirement to the consumer the account information is in a central depository. Secondly, what if the notice is not sent and/or the information in the central data base is not accurate, who has the liability. Third, the central depository could be used as a means to support class action lawsuits or be a basis of a lawsuit. An alternative is already available but needs to be corrected and a national uniformity of information provided: Credit Reports. Credit reporting agencies, furnishers, and consumers need to have better accuracy across the board. Stop the finger pointing and excuses, in my opinion.

A central system has privacy concerns and it would be useful only if it included verification of who picked up the document and when.

Instead creditors and debt buyers should be mandated to allow secure document uploading to their own website with official notification that the document has been reviewed.

I have a pending case of a company misapplying my payments, I had to send many registered letters and faxes with proof of payment which cost some money and time. With this company anything you send them "doesn't exist" unless you have verifiable proof they have been forced to accept it.

It would be a lot easier for the consumers to just upload the documentation and get verification the company reviewed it which can be used for a complaint.

There should be penalties of fines for not marking an uploaded document as "reviewed" after a period of time.

Hello, Waywiser. Welcome to RegulationRoom. If consumers were able to upload their documents on the creditor's or collector's website, how could that information be shared with others in the debt collection industry (for example, if the individual collector sells the debt)? Additionally, how long should a collector have to view the uploaded document before it is fined?

It could be treated just like any document you fax or snail mail, uploading is just an easier way to get it there. As to fine time, I would say 48 hours.

6|Privacy and data security - 5

Agency Proposal

What are the privacy concerns when debt owners, buyers and collectors transfer the kinds of information and documentation described in this post?

Centralizing information and documentation in data repositories also raises additional privacy and security issues. What exactly are the dangers here? Could they be lessened by setting minimum federal privacy and security standards? Or by requiring that repositories register with CFPB?

Read what CFPB said in the ANPRM about Documentation (Media) and Technological Advances.


Commenting is now closed.

As I had commented in subsection 5 in this topic, security would be paramound.

Since the weaknesses in current authentication practices financial institutions/others covered by FACTA and the FCRA are not within the scope of this legislation, it shouldn't be difficult to impose those same security standards on any centralized debt collection database.

What are the laws and rules on who can create/own debt collecting companies? It seems that just about anyone can create a debt collection company and if the owners and/or employees have unscrupulous desires, then it seems that privacy is a big concern. Plus, if anyone can create/own debt collection companies, then it doesn't seem to surprise me why so many debt collecting companies break the laws. There should be tighter laws on the formation of debt collection companies and the employees that they can hire.

Check your state law, such as Illinois has its own Collection Agency Act. It's a licensed profession and Atty general for the state would be a start for a complaint.

The main problem with privacy is that we use the SS# for everything, so everything can be connected. That's been a bad idea since they started using it as a taxpayer i.d. It probably prevents a little fraud, but it's not worth it. We have, in effect, made it illegal to be untraceable--not a good thing for victims of domestic abuse, among others.

Collection agencies should abide by the rules and regulations surrounding HIPPA (medical), Customer Proprietary Network Information (FCC) and other statutes already in place. While the CRPB cannot change those statutes, agencies must still abide by it.

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