Closed Rule

Consumer Debt Collection Practices (ANPRM)

Summary

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 Unlawful collection practices - 193

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Subtopics

1|Harassment or abuse - 113

Agency Proposal

The Fair Debt Collection Practices Act (FDCPA) is supposed to “eliminate abusive debt collection practices by debt collectors.” The FDCPA spells out things that would illegally “harass, oppress or abuse” consumers (FDCPA § 806). Some of these are discussed in other topic posts:

Here are 3 others:

  1. Advertising a debt for sale to coerce the consumer to pay it.
  2. Using or threatening violence (or other criminal means) to harm a person, or their reputation or property.
  3. Using obscene or profane language, or other language that has “the natural consequence” of abusing someone hearing or reading it.

Is there anything about these 3 that a new federal rule should make clearer, or add to?

The FDCPA says that there might be other practices that “harass, oppress or abuse” consumers. Is there any other kind of conduct by collectors that new federal rules should list as harassment or abuse? How often does this conduct happen?

Read what CFPB said in the ANPRM about Abusive Conduct.

Comments113

Commenting is now closed.

Consumer attorneys occasionally advise their clients not to record unlawful communications due to state laws requiring both parties' consent for recording. The CFPB should require that debt collectors subject to the FDCPA impliedly consent to recording by consumers.

I agree both party's should be aware if any recording is going on. It is fair for both sides

The original comment was suggesting that anytime a debt collector calls they are automatically agreeing to be recorded if the consumer chooses to do so. I think that is a FANTASTIC idea.

There is currently dispute among federal district and circuit courts as to whether a post-default assignee of a debt comes within the creditor exception. The CFPB should issue a rule providing that a post-default assignee is a collector for FDCPA purposes.

The FDCPA contains an exception for creditors. The CFPB should include in any rule confirmation that the same practices prohibited for collectors under the FDCPA would be unfair, deceptive, or abusive acts and practices if done by a creditor.

7 phone calls a day from each debtor.
from 9am to 10 pm.

Consumers should be able to request calls be limited to one contact per week if they desire. That is a fair and honorable compromise, no?

Something must be done were criminal charges can be pursued if a collection agency continues to harass through phone calls and emails.

So are you saying the CEO of the company who's dialer keeps calling should face criminal charges ? I don't think that is the solution, I hear there isn't room in the jails to put all the bill collectors.
A lot of the multiple calls problems come from an dialer calling, if it doesn't get an answer it will call back later.

I think charges should be pursued.

Actually a dialer does not call back. Your dialer has been purposely setup that way by YOUR IT dept. Would you like to compare notes? I bet you would lose in the knowledge of dialers.

stopwithspoofcallerID, the purpose of Regulation Room is to provide an environment where people can learn about important agency proposals and discuss them in ways that help the agency make a better decision. Everyone who comments on the site is expected to remain civil and respectful. We welcome you to continue commenting on CFPB’s questions and ideas about debt collection practices.

Explaining why the repeat phone call abuse happens does not justify it. Apparently there are autodialers that call several consumers at the same time, than hang up on all but the first consumer that answers the phone. The result is a person can get several collection calls and hang ups through out the day, that is just not right.

I am saying that collection agencies cannot be trusted and more often than not go beyond their job scope. Some act as loan sharks and not collection agencies. I also think that their behavior is criminal when it comes to making threats against consumers and harassing people with disabilities and seniors. So, yes i think criminal charges should be pursued for their cover ups and harassment. Also other violations of privacy and fairness.

This has to stop. I also think that companies who have their own collection companies should not be allowed to negotiate terms with loan holders.

The same debt will be recycled by changing the date and placing with various agencies. In some instances the debt has been paid, but the various collection agencies are still reporting the debt and trying to collect. This practice is not legal, but occurs frequently.

Thank you for your comment, Jerry. Are you saying that problems with information transfer between debt collectors can lead to issues like trying to collect on paid debts? Do you think this could be prevented by keeping track of the right information?
CFPB is asking questions about what kind of information debt collectors should keep track of, and what documents consumers should be given. You can join others who are talking about CFPB’s questions and ideas about this topic here.

The majority of the time, when a debt has been paid off, it has been paid to the client, not the collection agency. Most of that time when that debt has been paid to the client, the client neglects to report it to the agency. So the collectors continue to call on a paid debt that they have no knowledge of. It's really not the collectors fault, it is generally the client's.

Would it help to have a new federal rule that requires the owner of the debt to promptly tell the collector to stop collection activity if the owner has received payment?

I have a collection story about my 90 year old mother in law. One day she receives a notice from a collection agency. My mother in law is listed in the phone book, and her name is similar to the supposed debtor although they live in different parts of the state.

They send a collection notice. We respond that they have the wrong person and sent it certified.

They receive our response, but do not respond.

She continues to get notices and an occasional phone call.

While you might say, just disregard them, this is incredibly stressful to my 90 year old mother in law.

I would like to propose my own solution to the problem and it is self-funding.

1. The consumer disputes with the collection agency via certified mail.

2. If the collection agency doesn't formally cease collections and write a letter acknowledging this within a period of time, the consumer can pay a filing fee ($50-75) and appeal to the CPFB.

3. If the collection agency is found at fault, they $50-$75 fee is refunded to the consumer and the fee plus a penalty will be assessed the collection agency. Failure to pay the fines will result in the collection agency losing their license.

Bottom line: there's need to be some "teeth" in any rules.

Why should the consumer pay a filing fee at all if the collector is at fault? That could be a hardship on many people. The collection agencies need to follow the rules of doing their validation correctly, and this would not be an issue.

I agree that of course an ideal situation would be for consumers not to pay. But let's not let the perfect be the enemy of the good. I was proposing some viable method that would result in an ability of a consumer to have a hearing. Hearings cost money and ultimately the collector would be assessed.

I have been called by a bill collector and asked for somebody who I had no knowledge of, we'll say "Joe Smith". I say "Joe Smith doesn't live here. In fact, I have never heard of Joe Smith". The caller states: "Well, do you have Joe's current phone number?" I say "I repeat, I don't know a Joe Smith".

The collection agency caller states "I'm sorry I am not allowed to remove this number from our database unless a new number replaces it."

Oh, come on now, seriously?

Debt collectors should not be permitted to harass a debtor's ex-spouse by repeatedly calling the ex-spouse. Debt collectors are known to use the old phone number of the debtor that now belongs to the ex-spouse exclusively. Even though the ex-spouse tells the collector to remove her phone number from the collector's records, the collector does not, and then repeatedly calls her trying to get to the debtor. Collectors must be required to remove her phone number from their records at her first request and not be permitted to call her again. Otherwise, she has no recourse to get the harassment to stop.

My homeless brother in San Diego was taken to the hospital by a local ambulance service. On the way, they ask for a person to contact, with an address or phone number. Now the collection agency is calling MY phone number. They are saying I owe money to this ambulance service. They know it is a lie, but they will still keep trying to collect on this debt, and harassing me in the process.

Thank you for sharing your story Dannyea. Filing complaint’s with no documentary proof is raised below in Substantiating claims (below) and is part of what’s at stake in Documentation (Making sure debt collectors and buyers have info about the debt). We hope you will let CFPB know what new rules would have helped your situation.

If I ever tell a collector that I'm recording the conversation, the call ends rather abruptly or the calls just stop.

Yet, I'm expected to be recorded whenever they initiate the call. They expect me to have an expectation to be recorded when they want to attempt to collect a debt, but the minute I want to record them while I dispute a debt, that's out of bounds...

I did the same thing and the response was immediate to stop the abusive behaviors. Like you most debt collectors just hang up. Those who stayed on immediately changed their tone of voice and behavior. I would advise anyone receiving verbally abusive, harassing, or threatening phone calls from debt collection calls buy a cheap telephone recording device and to use it when they call. When they inform you at the mini-Miranda point interrupt them and tell them that you too are now recording all debt collection calls. It's the most powerful tool any debtor can use.

I don't believe in abusive behavior (i.e. the behavior spelled out in the FDCPA), but what this individual is saying that she owes a debt that she is not paying. Instead, she wants to be the offensive party and paint the collector into a corner using a recording device. Instead of purchasing a recording device, wouldn't she just be better served by using that money to pay the debt collector for the debt she owes?

Why should the consumer pay a filing fee at all if the collector is at fault? That could be a hardship on many people. The collection agencies need to follow the rules of doing their validation correctly, and this would not be an issue.

What a great idea -- record them. Reading these comments, there are so many examples of abuse, it seems like this Consumer Protection agency ought to have gotten the message thus far: the phones are used to harass. The only way to get this to stop is to put some teeth into the laws through civil fines, not put the onus on the consumer to have to sue.

Debt collectors should not be allowed to alter their caller ID information. They call misrepresenting themselves as "Process Servers" inquiring information about another person's debt. This prevents the consumer from reporting the debt collector for violating consumer protection laws because a false identify was used.

They have done so. I've gotten calls from the same collector who will use a toll free, then a number with an area code, then that number will be changed by a digit. Google the number. That is so helpful. It will tell you the company that is calling. It was always the same on. I agree this is wrong, misleading, a fraudulent way to deal with people. But the totality of all I am reading here is that collectors are harassing and do it by phone. The thing to do is put some teeth into the laws that prevent this. Now, the only thing consumers can do is sue. And for $1000 -- and you'd be hard pressed to find a lawyer who will sue for such a small amount.
It has become a situation that slams the consumer, it has evolved into that.

Thank you for your comment, jcolesrn. Your suggestion that debt collectors should not be allowed to alter their caller ID information is one that was shared by other commenters. If you’ve had experience with debt collectors, CFPB would be interested in hearing your story as support for your suggestion. You may also be interested in commenting on the topic, Questions about phones & mobile phones in debt collection.

Yes, that just happened to me today, someone called trying to locate a friend saying they were a "courier service."

The Pro Publica piece on one "installment" loan lender has plenty of examples of harassment that goes over the line that is not covered by this language -- collection at place of work, filing lawsuits to seize a borrowers payroll card effectively leaving the borrower with no income. Truly dreadful conduct.
http://www.propublica.org/article/installment-loans-world-finance

Welcome to RegulationRoom, jhe0200. CFPB is interested in hearing from commenters about harassment tactics by installment loan lenders. Please join the discussion about harassment on the topic page, Unlawful collection practices. It would be helpful in your comment to give specific examples and suggestions for rules CFPB could create.

As someone who regularly reviews credit reports, I am appalled by a practice I see regularly. Debt Collectors frequently resubmit the report of a debt as delinquent every month . This will have a highly adverse impact on the consumer's credit scores.

Please will you make it a point to let this agency know that. That is information they may not be aware of. Thank you much for informing everyone of that. Please state that in several areas. You will help a lot of people if that practice is stopped.

Welcome to RegulationRoom, Daves, and thank you for your comment. The practice you mention has been brought up by other commenters as well. Given your experience with credit reports, do you have suggestions for rules CFPB could propose to help with this problem?

Can there be a national repository to report abusive phone calls from debt collectors that masked (fake and “spoof”) their caller ID? I got a brand new phone number a few years ago and it obviously previously belonged to someone who is delinquent on their bills because I get calls everyday from debt collectors looking for the person who had my phone number before me. No matter how many times I tell them they have the wrong number, they don’t care and they just keep calling and they call from spoofed phone numbers. And this is my cell phone, which is against the law for debt collectors to call. The same debt collectors call with faked caller IDs. Here are just some of the phone numbers these debt collectors use:

808-792-8186
462643
858-568-7632
805-322-4584
706-913-1192
808-348-0083
858-345-4076
858-312-7724
908-505-9008
800-633-2677
252-808-7969
571-522-0386
407-712-3093
213-816-2972
804-721-3193
678-781-4530
427307
858-240-4079

Consumers should be able to record. End of discussion.

As a bankruptcy lawyer, I frequently deal with clients or are harassed by debt collectors calling family or neighbors. the collectors will claim they are acquiring location information, but this is frequently the case where the consumer has been at the same location for years. I hope the rules will narrow the "location information" exception so that it can only be used where there is really doubt about the consumer's location.

I was following the advice of our bankruptcy attorney. I was allowed to tell creditors only a limited amount of information. I could confirm- my identify, that yes I owed the debt, and third that I was not able to start repaying my debt. No I was not allowed to tell the debt collectors that we would be filing bankruptcy. It took almost six months to complete tasks prior to notifying creditors about the bankruptcy. During that time I was subjected to verbal abuse, threats, illegal intimidation tactics, and outright lies. The tape recorder completely stopped the bad behavior. It's amazing what debt collectors will say and do when they call debtors. It's a totally different story what they want recorded. The best money you will ever spend is a cheap $20-25 telephone tape recorder.

Once I tell a debt collector I am a unpaid CareGiver and that is why I had to stop making payments, why do they keep calling me? In essence they were telling me to let my parents die if necessary and go get a job.

I was repeatedly baited with the comment, "So you are a "refuse to pay". I found this type of conduct outside the lines of common decency.

I had a business, I had to give up the business to become an unpaid CareGiver. If I had been shown at the time I apparently agreed to the credit card agreement that there truly were no ifs ands or buts in regards to monthly payments forgiveness on an "unsecured" debt, I would have come up with a different business model that did not require credit card debt.

Credit card companies get to present themselves as pro family in their advertising when the exact opposite is true in times of crisis. Ask people who had a dramatic life changing incident occur how the credit card companies treated them. Ask the Colorado flood victims, or the Hurricane Sandy Victims, or the person who was the victim of a hit and run how the credit card companies treated them. These are the same credit card companies that lobbied the comptroller of the currency in 2002 to keep their monopoly on credit card debt suspension insurance and the outrageous overpriced premiums they were charging their customers. One of the best ways consumers had to be responsible regarding their credit card debts was having AFFORDABLE credit card debt suspension insurance. This option was stolen from consumers in 2002 when the comptroller of the currency allowed credit card companies to over charge by 1000% to 2000% on monthly credit card debt suspension insurance premiums. I created a time line document that shows how the financial elite stole fairness from the people in regards to credit card products.My appearance in front of the CFPB in May of 2013 and the research I shared with them.

I dont understand why bill collectors are so stuck in ancient times. I get so many calls and its annoying. I would much rather get a text or email. The phone ringing can be annoying and a text is more subtle. It also doesnt require me to hear a long dragging voicemail. I would rather get a text saying who they are and what they want. If I dont respond soon then call me.

Texts will not work for consumers. Consumers must pay for texts and this is already against the law will rightly so.

Welcome to Regulation Room kiko30, thank you for sharing your suggestions. Other commenters have raised concerns about paying for texts. Do you think these concerns would be solved by allowing texts only if the consumer expressly gives permission? Are there any privacy concerns with text messages, like other people being able to read it?

Understood. All i meant was that I know a lot of automated dialers. given the nature of my work. and the comment i replied to was to set the record straight so that everyday consumers (and CFPB) would understand all dialer work. They don't magically redial. The are forced to by the company.

Dear Credit Solutions Company, I am pleased to hear that information that is being given to the people of America is something that we can wield and stand up for to protect our rights. A debt is a debt is a debt. But how that debt is collected upon can be a very nasty vicious circle. I would certainly hope that with just this information that I read that it covers one of the biggest Welfare Reform Act that is called Child Support Enforcement that basically feeds the governmental beurocratic pockets of not just the states but hoe states enforce their bullying tactics in pursuing astronomical amounts from bad billing practices, high interest rates above and beyond what other types of creditors, mortgagers even come close too.

We seem to have a very big problem in this country that I have read and researched from the lowest courts to the highest courts where we are in the staggering amounts of billions and everybody wants to blame ‘dead beats’.

Reading and talking with attorneys, they themselves have had to challenge improper arrears at astronomical amounts that are owed in the court system several times, and they will bluntly tell you on factual stories and reports of stories such as – they already seem to know that improper billing will be the case and let the client know that up front…Why???

If the federal government mandates these laws including the FDCPA why is child support excluded? I would hope that what is taking place at this point in time will actually be covering what millions and millions of men and women are being threatened with wage garnishment, property seizure, and banks levies, prison, and destroying credit reports. And yet the state says, “it is the law” and yet the law is not governed by the states, to a point, but it is the federal gov that needs to take action and perform a good clean audit that the federal government is the one that started this, “we are owed “, they are solely all behind these federal laws of consumers rights and fair debt practices. So I hope that this chain.of events will cover what simply boils down to is a -debt is a debt is a debt. I don’t think Americans have a problem paying the debt they have gotten themselves into…it is the way your city, state, county, and federal regulations keep passing the buck to the next agency and never accomplishing anything.

There is no excuse.

Benjamin

[Reply]

Repeated phone calls are torture. There is NO need for this when there is a mail system. One completed phone call should be enough.

Consider these:
* Record all- ID Caller and inform consumer immediately (audio auditing collectors and reps are much easier).
* Limit calls to 2 daily unless contact is made with consumer.
*Consumers are assigned 1 caller per case, not more across multiple shifts.
*Hold company that is owed debt, liable for 3rd party negligence (harsmt,abuse/etc).
*Not require work number on credit application which would prevent calls at work, otherwise, potential exist to cause consumer grief, harassment, discrimination, hostile work environment or other negative action(s) at place of employment.

Welcome to RegulationRoom and thank you for your suggestions, Steevo. The federal law ban on unfair, deceptive and abusive practices covers not only debt collectors, but also “service providers” and others who “knowingly or recklessly provide substantial assistance” to collectors. You can comment about what behavior by third parties you think new federal rules should deal with in subsection 5, below. Since some of your suggestions relate to collection phone calls, you may be interested in the topic on Questions about phones & mobile phones in debt collection.

Bottom line...the new rules that the CFPB comes up with need to be FAIR to BOTH the debt collector and the consumer. While there are collection agencies that abuse consumers and the system, and need to be dealt with, most agencies are simply trying to help collect monies due their clients from consumers who have chosen not to pay. There could be a variety of reasons that they've chosen not to pay; both legit and not legit.

Currently, the playing field favors consumers; more specifically 'consumer attorneys'. Collection agencies can get sued for leaving a message for a consumer WITHOUT disclosing that they owe a debt because uninformed judges have arbitrarily decided that a message that does not disclose any information about a debt is a communication. This completely contradicts current FDCPA law, however, that specifically states that a 'communication' means directly conveying information regarding a debt.

They can also get sued by leaving a 'Foti' message, should that message be overheard by a 3rd party. 'Foti' is NOT law, but rather another judge's uneducated (on FDCPA) opinion / ruling that basically states that 'messages need to give complete information about a consumer debt and that the call is from a collection agency, after allowing unrelated 3rd parties the opportunity to step away from the message retrieval device. This sounds silly, but it's true.

Predatory consumer attorneys use this lack of definition in the law to perform 'Sue and Settle' techniques on collection agencies that make call attempts in one of the above stated procedures; agencies can get sued for trying to contact debtors by both methods.

What's worse, and I personally know consumers that this has happened to, is that these 'supposed' consumer attorneys aren't really acting on behalf of the consumers that they represent. They use these consumers simply as a 'vehicle' to sue an agency where their whole goal is to get thousands of SETTLEMENT dollars in attorney fees as they can while only providing the alleged 'wronged' consumer several hundreds of dollars. They use this 'SUE & SETTLE' business model as a way of extorting money from agencies because they know that an agency would have to spend $30-50K to defend themselves. And, while the agency may be successful in defending themselves, many don't have the monies to spend defending themselves knowing that they cannot recoup these fees & costs from the consumer attorney that filed the frivolous lawsuit in the first place.

Furthermore, somewhere along the way, another uninformed judge made a ruling (NOT LAW) stating that agencies can be sued under TCPA by attempting to contact a consumer about their debt by an auto-dialer calling the consumer's cell phone.

Several things are wrong with this. First, if you read the TCPA in it's entirety, it was meant to stop TELEPHONE SOLICITORS (people trying to sell consumers something), that didn't have any prior relationship with the consumer. Collection agencies are not trying to sell anything. Collection agencies, via BA Agreements, act as an extension of the business office for those creditors that DO HAVE A PRIOR RELATIONSHIP with consumers. As such, the TCPA does not apply. However, judges that are ignorant on the law make their opinion into a ruling which opens the doors for these predator attorneys to use their 'Sue & Settle' techniques.

In conclusion, the CFPB needs to specifically define HOW collection agencies can lawfully contact, and work with, those consumers that owe their clients money. The CFPB needs to 'throw out' ignorant rulings by judges who do not understand the law.

The laws have to be equal on both sides. If not, the CFPB will simply provide consumers a legal avenue to steal from those businesses that they do credit business with by not paying their bills and, subsequently, these businesses not being able to hire debt collectors to help them get the money that they're owed.

very well said mslade, agree 100%.

Mslade, you have some valid points about the confusing Foti rulings, but I think you are wrong about the TCPA. This law has always applied to debt collectors, politicians, and even charities with respect to cellular phones. And it's not just one judge who has ruled in this way. The FCC and the courts have repeatedly affirmed it.

Are you suggesting collectors should be allowed to robocall cell phones of people who don't even owe the debt? What kind of backlash will there be against the collection industry when one of these misdirected robocalls contributes to a car accident or interrupts a senator during a meeting?

The Telephone Consumer Protection Act of 1991 (TCPA) was passed by the United States Congress in 1991 and signed into law by President George H. W. Bush as Public Law 102-243. It amended the Communications Act of 1934. The TCPA is codified as 47 U.S.C. 227. The TCPA restricts telephone solicitations (i.e., telemarketing) and the use of automated telephone equipment. The TCPA limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages, and fax machines. It also specifies several technical requirements for fax machines, autodialers, and voice messaging systems—principally with provisions requiring identification and contact information of the entity using the device to be contained in the message.

mslade, our apologies, we realized our response to you was for another commenter talking about cell phones. We hope you will continue to comment on the proposal. At this stage, CFPB is looking for info on problems consumers and responsible debt collectors are having. CFPB doesn’t have legal authority over absolutely every aspect of debt collection, and rules about collection litigation are a complicated mix of state law and federal law. But as CFPB moves to the next stage (coming up with specific proposals for new rules), it will be carefully considering what you and other commenters say here.

Dear Mslade,
I have not encountered a situation in which the bill collector is hired by a business for many decades now.

Usually the debt collector has bought the debt, usually for pennies on the dollar, from the original creditor.

I also disagree that the law provides a way for consumers to steal from businesses. If anything, I would say we have become in danger of reverting to the tyranny of Dickens' time, where a person and that person's family, including children, would be imprisoned for debt.

Surely we can agree on reasonableness when it comes to how we treat each other, whether debtor or creditor?

Marion - I have not heard of anyone in the US being imprisoned for their debt. I have been in the business for 20 years and rest assured, while there are 'debt buyers', the majority of agencies are contingency based collections.

Creditors should only be allowed to call between the hours of 9am until 7pm local time unless they have written consent (maybe even a web form) that gives them a minimum 3 hour window in which to call. Additionally, they are limited to 3 phone calls a day maximum.

Creditors should only be allowed to call between the hours of 9am until 7pm local time unless they have written consent (maybe even a web form) that gives them a minimum 3 hour window in which to call. Additionally, they are limited to 3 phone calls a day maximum. If they leave a message they should be required to leave the name of the company, the name of the representative, the number to call, and a reference number.

In regards to debt sales, the entity selling the debt should give 90 days notice of the intent to sell giving the consumer notification of the intent to sell and maybe even offer a settlement amount. The entity purchasing the debt must honor any and all terms of the debt they are purchasing (i.e. payment plans, deferment/forbearance, etc.).

I can give you an example of this: My brother has several private student loans. About a year ago we started getting phone calls from Discover in regards to student loans and we all assumed that it was a sales call because no one living at my address had student loans with them. Eventually we managed to be home when they called and we discovered that two of my brother's loans were sold to Discover and he was never notified. So all this time thinking it was a sales call, because Discover only gave a 1-800 number to call about student loans and not even the name of the person they were trying to reach, his loans were actually in default because Discover cancelled the forbearance he had upon purchase. When he attempted to put them back into forbearance, Discover told him they "didn't have a system for that yet".

Welcome to RegulationRoom, cedon. The issue of repeated calls is covered in another topic, Questions about phones & mobile phones in debt collection--Repetitive calls and robo-calls. You can read more about that issue and comment on it, here.

Thank you for sharing your story and your brother's story, cedon. CFPB is considering rules that require a notice be sent to consumers when their debts are sold. Would that have been helpful for you and your brother? You can read more about that issue and comment, here.

I would have to point out that there is many complaints in regards to how abusive or harassing debt collectors are according to consumers. As a third-party debt collector, I receive dozens harassment complaints daily. I would just like to note that 80% of the time, these consumers that my fellow co-workers and I come across, are complaining of harassment and abuse; and 100% of them are truly just unwilling to face the facts. That's what they are complaining about. When we tell them that they owe a debt, they consider it harassment and abuse. They just don't want to hear their problems. Yes, grant it, there are some debt collectors that are harassing and abusive, but the other 98% are just pointing out the truth. When consumers realize that it is them and not us, debt collectors would receive a better reputation. But until then, we are the enemy in the consumer's eyes.

I disagree. The problem with reputation is really two fold: 1) yes, nobody likes debt collectors just like nobody likes dentists -- this is just the nature of the profession; and 2) the problem is that debt collectors think of their profession as "us versus them" or "them versus us" and this is wrong and is the reason why debt collectors operate in illegal and abusive manners.

Tiffany, I think part of the problem is that the 2% of collectors who harass and abuse are responsible for a disproportionate share of the contacts that consumers have with your industry. Everyone (whether they owe a debt or not) has had an encounter with one of these bad apples, and then they want to take out their anger on you. And when you make an honest mistake and get sued for a technical violation, you pay the same penalty as a company that has deliberately harassed someone with 100 phone calls.

Thanks for your comment, Tiffany Spangler. One of the goals of the Fair Debt Collection Practices Act is to make sure that responsible debt collectors aren’t driven out of business by companies that get results by using abusive tactics. Would it help legitimate collection activity if CFPB make a rule that defined how many and what kinds of contacts are not harassment?

It might help to take a look at how debt collectors are compensated. I think, based upon people I know who have held such work, that collectors who receive their pay based on a commission are incentivized to abuse the consumer.

I do not think the CFPB's mission is to provide job security for the debt collection industry.

I would like something that addresses the amount of times a debt collector can contact someone other than the debtor. My husband's exwife has several debts and we are sometimes contacted several times a day and often at night to find out if we are in contact with her (they have been divorced 36 years).

Hi Carol, welcome to RegulationRoom and thanks for commenting.
Your story brings up many of the issues CFPB is trying to address in this proposal. The collector can’t contact any person other than the debtor to talk about the debt, unless the debtor has authorized it; see the Talking to other people about the consumer’s debt post.

My daughter has both private and federal loans through Sallie Mae. They call her cell phone and my cell phone daily, at least 10 times a day. They called me, by the way, they do not have her permission to speak with me, and tell me to stop paying her federal loans because they can be deferred and pay the private loans. My daughter owes 176000.00 in private loans and can't afford to make the payments that they are asking for. They called her employer requesting information on her. She sent a letter and requested that they only contact her through email and US mail. When they called me I asked them if they received this and they said yes but they need to be able to talk to someone. Well, they don't have my number as a contact number. I told them and they still call my cell phone daily. My daughter can barely pay the bills she has now. I help her pay her private loans. I am not on any of her loans. This harassment needs to stop!

Wow, I am sorry to hear about this situation. This kind of abusive behavior is upsetting to hear as a consumer. They don’t need to "speak" with anyone. You/your daughter are perfectly within your legal rights to ask the phone calls to stop and to communicate by other means. And the collectors who are refusing to honor this request is in violation. Moreover, they should not be contacting you nor they should be contacting you/your daughter 10 times a day. This is clearly excessive and abusive.

I would like to also mention, that although they do have a point about the federal loans can usually be placed into deferment, debt collectors are not fiduciaries and are not acting with nor are capable of providing financial advice that is in the best interest of the consumer/debtor. The collectors will say anything and do anything just to get paid. They should not be allowed to offer advice on what bills to pay and how to pay them. This sort of "advice" can be detrimental to consumers/debtors. Perhaps the CFPB should allow collectors to offer referrals on financial advice, but they should not allow collectors to outright give financial advice.

Thank you for sharing your story, lori9759. On CFPB's website they answer consumer questions about debt collection, including many of the issues you raise. You can also file a complaint with CFPB. Your story brings up many of the issues CFPB is trying to address in this proposal. The consumer has the right to tell the collector to stop contacting him/her completely; see the subtopic Limiting collector communications in the Questions about phone & mobile phones in debt collection post. Also, the collector can't contact any person other than the debtor to talk about the debt, unless the debtor has authorized it; see the Talking to other people about the consumer's debt.

My deceased daughter(she passed 2 years ago) had some debt. We continue to receive calls from debt collectors even after we have asked them not to call us anymore. My wife has filed complaints with the Oregon State Justice dept. to complain about the harrassment. Why can't these collectors do their research on the debtor, before they harrass the parents!!

We're sorry to hear of your loss. Thank you for sharing your experience. CFPB is interested in hearing your story and any thoughts you may have about what debt collectors should be able or unable to do after the consumer has passed away. Please share any insights you have for CFPB here, in Talking to other people about the consumer's debt. You may also be interested in submitting a debt collection complaint with the CFPB here, on their complaint page.

Why should the consumer pay a filing fee at all if the collector is at fault? That could be a hardship on many people. The collection agencies need to follow the rules of doing their validation correctly, and this would not be an issue.

The debt collector who harassed me did that number one on the "three others" -- I got calls saying "hey we'll settle for" such and such. It was a medical debt and I was tempted to say why? There is only going to be more medical debt. When times are that difficult for people, making the mortgage and getting medicine takes precedence.
I don't think it should be legal for any of these things to happen, publishing names, calling relatives and certainly not robo-repeat calling but yet as you read these comments they are going on. I hope this has a good outcome and there will be laws and fines for those companies that do this, because what is available now, suing the debt collector, has not put a dent in their egregious behavior.

I have a creditor who begins calling withing a few days of becoming past due. They are relentless calling up to 10+ times a day. I don't call them back because once on the phone with them, they hound you until you agree to make a payment or post-date a payment. If I don't call them within about 15 days of becoming past due, they start calling my relatives and neighbors and say "we're trying to locate xxx - do you know them?". When they answer yes, they ask them to deliver a message to me (phone number and name). I've been told this is not illegal since they are using public information and not revealing who they are or what the call is in relation to, but this tactic is shameful. We are making an honest effort to get current and stay current, but when my neighbor hands me a piece of paper with a note on it, I feel pretty powerless. This is both harassment and abuse in my opinion and it should be addressed.

Hi tiredofthecalls, welcome to RegulationRoom. I am sorry to hear about your difficult experiences. If you want, you can lodge a complaint about this on the CFPB's complaint page: CFPB Complaint Page Link. Additionally, the CFPB is very interested in hearing about individual experiences such as these, and has proposed some questions such as whether the new rule should include a strict limitation on how many times collectors can contact a consumer. You can find information about this and we encourage you to comment more, here is the link: "Questions about phones & mobile phones in debt collection" subtopic page

Periodically (probably when the debt has been sold) I receive harassing phone calls from collection companies regarding a believed debt that my nephew owes. I send him Christmas cards annually, see him at family gatherings every 5 years or so, and stopped contacting him about this harassment after he assured me it had already been taken care of when I received my first call. These calls happen about once a year for a couple weeks at a time.

Thank you for joining the discussion on RegulationRoom, Tina Simmons. Federal law permits debt collectors to contact relatives to try and locate consumers, but they are not allowed to talk about the debt. You mentioned that collectors had contacted you about your nephew's debt. What have the collectors talked about with you? For more information, please see the discussion in the section about Talking to other people about the consumer's debt.

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I was just watching "CBS This Morning" and they mentioned that FICO is going to be partnering with more financial institutions to allow the financial institutions’ customers to get their FICO score for free. FICO is already offered for free with many financial institutions, but now FICO is aggressively expanding this offer through their "Open Access" program. Link: http://www.fico.com/en/Products/Scoring/Pages/FICO_Score_Open_Access.aspx

I have known about this ever since FICO put out a press release earlier this month. What I found out today on "CBS This Morning" is that Discover is going to allow their cardholders to see their FICO score for free on their monthly billing statement. I don’t think this is appropriate for Discover or any other business to put a consumer’s FICO score on a billing statement or any other materials that can be turned over to debt collectors. Right now, debt collectors do not have access to any consumers FICO score. They do, however, have access to something called a "collection score" which is nothing at all related to FICO or a consumers creditworthiness. This action by Discover is a HUGE privacy concern and the CFPB should not allow creditors or anyone else to have access to a consumer’s FICO score.

To Mods: Not sure where to put my comment, so it ended up here in the Unlawful Collection Practices forum, because this practice by Discover should be unlawful for others (debt collectors, mail thieves, joint account holders, any one else who might have access to a billing statement) to have access to a consumer's FICO score.

The current penalty for violating the FDCPA is "not less than $100 and up to $1000." Further, the violations cannot be "stacked" so those violating the law 10 times on one debt, will generally only face the maximum of a $1000 penalty. Punitive damages are hard to prove. A $1000 penalty is not a deterrent to the debt collection industry, and too low to get most attorney's interest is taking these cases. If we want to see the law upheld, raise the penalty to $10,000 per violation - and you'll see most of these characters clean up their act and stop using abusive collection tactics.

Thank you for your suggestions, Determined1, and welcome to RegulationRoom. It seems like you are concerned that the benefits of breaking the law for some debt collectors outweigh the costs. Can you give us any specific areas or violations which need to be deterred by higher fines which aren't being deterred right now?

This particular bill collector has in the past said that I owe $20.00 more as I had a non sufficient funds. [which I would not do]. I disputed it with my bank statements and still they insisted that I have. I refused to pay that. geez.

One issue I am experiencing is that since I allegedly received an overpayment of wages from a former employer, I have NONE of the consumer protections that I should. I fall into the gray space of being a consumer and my alleged (and incorrectly so) debt is considered "commercial" and therefore there are absolutely NO regulations on the activities of the debt collector. The individual assigned to my account has repeatedly revealed to a third party that he is trying to collect a debt from me. The alleged debt has never been substantiated, so why am I not protected as I would be if I had received a loan from a bank?

Hi Zeena, and welcome to RegulationRoom. Thank you for bringing this issue to our attention. It sounds as though you would like at least some consumer protections to apply to individuals who have wound up with "commercial" debt through unorthodox circumstances. Do you, or any other commenters, have any suggestions as to how the agency could expand protections in this way?

States Rights versus Federal Rights are the biggest issues with the rule making process. There is a vast divergence of state law requirements that create areas that confuse consumers, regulators, and those in the industry as to what laws apply in what settings. A universal rule that would apply in all settings would assist all parties to remove the ambiguity and conflict that currently exists with state multiple levels of regulation at the municipal, state, and two regulators at the federal level

Welcome to RegulationRoom brown3 and thank you for your comment. Did you have any particular rules in mind that you think should apply universally? Also, you might be interested in reading the topic on litigation in local courts and state exemptions here.

I was a reference for an ex-boyfriend on a student loan application. One of the FDCPA rules is that the reference can only be contacted once by a creditor. Well, each time the account is sold to a new collection agency, they call me again, even though I tell them I have no idea where he is. I think creditors skirt the FDCPA regulations in a manner that harasses consumers. For any given account, the reference should only be able to be called a set amount of times--such as the first three collection agencies to purchase the debt from the original creditor. Here it is, almost 9 years later, and I am still getting calls for a person who is now a stranger to me. Since it is a student loan, it could go on forever. There is no statute of limitations for government guraranteed debt that I am aware of...

Welcome to RegulationRoom, mbolin, and thank you for sharing your experience. CFPB has questions and ideas about how it should deal with issues like the one you described.

You can read more in the subtopic "Trying to locate the consumer" on the topic page, Talking to other people about the consumer's debt. What do you think of CFPB's suggestions, or the ideas of other commenters, in that subtopic?

When calling about a debt, debt collectors
MUST verify that they are speaking to the
debtor(s) or other adult within the household. I know that is stated within the
FDCPA but from experience I know it doesn't always happen. My situation goes back to the 1970's but it was done then
and it's probably still being done today.
Calling repeatedly, threatening, screaming,
cursing at children gets collectors absolutely nowhere. It is a most disgusting form of abuse that should never be
tolerated.New language in the FDCPA should specifically and clearly state this.
Additionally, there should be some form
of penalty for collectors who engage in this
demeaning and useless practice.

Marian makes an excellent point about how Debt Collectors are paid. They try to get as much money upfront as possible. Ironically, if they get too much money upfront, the credit card company might snatch the account back from the debt collector. If the amount is "too low" that the debt collector receives, they are not interested. This goes against many sales principles that it is easier to interact at a later date with a paying customer versus trying to make a big score all at once.

I have never been deliquent on my State taxes. Due to an error made by the company I worked for in 2008, which didn't take out taxes, I am now faced with dealing with the State Collection agency. I have never heard of the State threating the residents to try to collect taxes. I called and coopertaed, however, the callers are harassing me from morning to night. How is that possible? I have excellent credit and have worked for many years to maintain my credit standing. I have never owed Federal taxes that I have not agreed to pay. And never in my life owed State taxes and I am shocked that they can hound the residents like private collectors do.
What is the recourse for this? I am retired and and on a fixed income. For the State to be able to threaten the residents who are making attempts to pay the taxes, (one year) seems like a violation of rights.

Welcome to Regulation Room, PJ. CFPB can only regulate consumer debt collection, not collection of taxes by individual states. We can’t provide legal advice (for more on who we are see about us. Each state has their own process for collection of delinquent taxes and if you haven’t already, we suggest you contact your state tax agency and ask them for assistance. Some states have special hardship programs for paying late taxes. You may also be able to contact a non-profit assistance program within your state.

In 2010 I was sued by a debt collector for a debt.

At the time I was in my final year of law school and was surprised at the amount of misinformation used by the plaintiff's attorney (e.g. claiming that no proof of assignment was necessary).

I informed the attorney that I would need proof that this was my debt as well as proof that his client had proper assignment of the debt. He responded by threatening (via e-mail) to interfere with my Bar admission process.

I did not believe that an unsubstantiated debt would affect my ability to sit for the bar and so I stood my ground.

He dropped the case (without prejudice) in Magistrate Court and then re-filed in State Court five months later while I was going through my Certification for Fitness process.

As a result of his second lawsuit, the State Bar did not allow me to sit for the Bar due to "a pending lawsuit" about debt.

He eventually also dropped the lawsuit in State Court. He never shared proof of this purported debt nor did he ever produce proof of assignment (presumably because he never had valid proof of either).

Nonetheless he was effective in "punishing" me by interfering with my ability to sit for the Bar after graduating from law school.

Note: this occurred in Georgia. Their rules for Bar Admission are available online at https://www.gabaradmissions.org/home

Thank you for your comments crecente and for sharing your story, it sounds like a terrible situation. At this stage, CFPB is looking for info on problems consumers and responsible debt collectors are having. CFPB doesn’t have legal authority over absolutely every aspect of debt collection and rules about collection litigation are a complicated mix of state law and federal law. But as CFPB moves to the next stage (coming up with specific proposals for new rules), it will be carefully considering what you and other commenters say here.

Based on my personal experiences in dealing with debt collectors , here are my personal opinions about the debt collectors of the debt collection industry as followed:

1. It apprears that the debt collectors of the debt collection industry are conducting a money laundry and racketing operation by explointing and obtaining monetary from comsumers for products that they don't sell to them or services that they don't provide to consumers with no inital purchase contract with consumers.
2. It appears that debt collectors are obtaining monetary from consumers where they don't have licenses to sell products to consumers or provide services to consumers.
3. It appears that debt collectors are costing companies money when companies are trying to recover their loses when they miss payments from their customers for the products that they sell to their customers or the services that they provide to their customers with alegal purchase contracts.
4. It seems that debt collector are relying on companies' money and on consumers' money for an income when they are not initially involved in the a company sale of products to consumers or in the distributing of a company of services to a consumers.

Welcome to RegulationRoom Realman. CFPB is interested in knowing more about what consumers are experiencing. Could you share details about your personal experiences dealing with debt collectors?

Based on research and personal experience with debt collectors, it appears that they can't find jobs in other sectors, so they turn to the debt collection industry for a source of employment to earn an income off of consumers' debts to pay their bills knowing that they have not sold the product or provided a service to consumers initally.

It appears that the federal governement allowing debt collectors to collect money off of consumers' debts where the debt collectors did not have lisences selling products or providing services initally to consumers in my opinion is form on money laudary/ racketeering and apprears that this federal law have debt collectors thinking that they have the power to say or to do what they want by abusing , oppressing, and harrsing to control consumers to collect money from consumers' debt for an income to pay their bills in my opinion is form of financial terrorism.

My problem with those debt collection companies employees I have had to deal with is this...they either call themselves agent,investigators,or they are members of a special department investigating a debt alluding to Law Enforcement or DA's office.Most recently, as last week, they have indicated, they are going to contact me at my place of employment and are going to initiate civil action if I don't contact them before the close of business. This is out of order and should be stop

Hi, lonjsjr, welcome to RegulationRoom and thanks for commenting. The CFPB is very interested in hearing about situations where debt collectors have misrepresented their identity or have threatened to contact individuals at their place of work. If you wish to lodge a formal complaint, you can do so on CFPB's complaint page. We would like to know more about these experiences, however, could you share a few more details about these experiences with us?

One such collection company used the actual phone number of a District Civil Court office in a neighboring county in their phone message for my wife to collect on a debt many years old. This practice is deplorable and should have sever penalties towards any collection company/employee that uses this type of collection action.

I received several Robo calls leaving messages to have me served at my job on a debt I do not owe. They have Threatened me via voice mail. They also use Voip numbers we have reversed them different each time. I have reported them several times but they continue to call.

Hello M.beth687, welcome to RegulationRoom and thanks for your comment. I believe that the issues you have been dealing with are more specifically addressed here. Please check out that section of the site and let us know what you think about what the CFPB is trying to do for people in your situation!

A debt collector phone representative should have over ride capability BEFORE an autodial call is made.

Suggestion...The prospective consumer's info comes on the debt collector's phone rep screen FIRST, the most current info at the top of the screen. If it looks like the info is up to date, the debt collector phone rep should be able to intercept the call BEFORE IT IS EVEN MADE.

Collection agencies are not an all loose for the consumer nor they should be. Some collections agencies have gone beyond their job scope and their role in the process of repayment.

During the past 2 years I have been repeatedly contacted by a variety of collection agencies. It began innocently enough, when one of them called me, asking "when can we expect your payment," when that statement had not yet arrived and was not due until the 20th of the month and the call occurred on the 11th. It was a collection agency hired by Capital One. Coincidentally, I purchased various items at Costco a few days later and received the shock of my little life when my credit card was denied. I called Capital One from a phone at Costco and was told I had not made my payment...this was even stranger because I pay off my balance each month. What I didn't know is that Costco switched from a very nice bank (HSBC) to Capital One, never notified me and Capital One immediately played hardball, albeit unnecessarily. To answer their strong-arm tactics, I wrote a letter to Robert Crawford, the incoming CFO of Capital One, in which I had cut up both credit cards and told him to "shove it," for treating a long-time customer like something you scrape off the shoe! When the collection calls began, I was in a great mood - after all, I had initiated this mess. However, they were unfaird from the beginning. They use I.V.R. numbers. Without technical jargon, it means that the number we see on caller i.d. is never the number from which they're calling, so you can't block their call (my provider allows me to block 12 numbers and I wondered how these collection agencies were constantly squeaking by). They robodial, so you can and do get several calls per day and before 8:00 AM and after 9:00 PM, since they know there is very little you can do about the early or late calls, besides whine (thank you, Darlings who will pursue these jerks!) and sit around frustrated and without good credit. That said, what followed was even worse....the collection agency (Portfolio Recovery) which was able to place a bogus $9,924 "collection" on my Experian credit score, which I saw because Target offered me 1-year free credit monitoring, which, by the way, isn't free if you want to see your complete profile...they have no paperwork to substantiate this charge and it has completely ruined my credit, pulling down my FICO from 795 - 810 to 610! To me, having collection agency CEO's boiled in oil seems like an act of mercy!

The ACA's (debt collectors) positions on the CFPB's proposed rules is disgusting!! It is laughable! See for yourself America, here it is: http://www.acainternational.org/files.aspx?p=/images/31323/aca-anpr-comm...

i agree. their comments are outrageous and is just more of the same. why should we expect a lobby group of debt collectors to really want enforceable new rules?

2|Communicating with a consumer who has an attorney - 6

Agency Proposal

When the collector knows that the consumer is represented by an attorney for the debt, the collector has to deal with the attorney not with the consumer – unless the consumer’s attorney says direct communication is OK, or the attorney doesn’t respond “in a reasonable period of time” (FDCPA § 805(a)(2)).

  • How common is it for consumers to be represented by attorneys on debts?
  • When they have multiple debts, does the attorney usually represent them on all the debts?
  • How long do collectors usually consider a "reasonable" response time? (To discuss the related question of how long a creditor should have to wait for the attorney’s response before contacting a third person for location information about the consumer, see Talking to other people about the consumer’s debt--Trying to locate the consumer).
Read what CFPB said in the ANPRM about Consumers Represented by Attorneys.

Comments6

Commenting is now closed.

FDCPA should define what constitutes reasonable period of time. In my experience most attorneys who represent a debtor do not return communication inquiries about representation. In most cases the delay in response may be caused by the debtor paying installment payments to the attorney to file a bankruptcy proceeding. When the debtor does not keep the repayment terms a creditor is presently not notified that the representation has terminated and there is no attorney representation.

RBell, CFPB is interested in learning if collectors typically calculate a "reasonable period of time" and does the answer vary depending on particular circumstances? Given your experience, do you have any insight to share? Do you have a suggestion for what would be a reasonable period of time in most cases?

Once an attorney is retained all debt collection action should cease as a bankruptcy usually follows.

There is now a class of "consumer representatives" which obtains from debtors a signed "Power of Attorney" and who then claim to be authorized to act as the consumer's attorney for purposes of debt resolution. They routinely seek to avoid the debt, most commonly by not answering their phones. My current practice is to advise the relevant state bar of the unauthorized practice of law by these jokers; perhaps a clarification statement that such persons must be licensed to practice law in the state in which the debt is being collected would cut down on the confusion.

Thank you for mentioning this issue. Could you elaborate on any experiences you have had with such consumer representatives, and perhaps how you have proceeded in the face of an appointed non-attorney?

Since the UCC and to the best of my knowledge, State laws do not define reasonable period of time, this is a problem and has been a problem for most lenders and third party collectors based on me experience of over 40 years. Consumers should be able to seek assistance from an attorney and be required to provide the attorney contact information to a collector, unless the attorney has not already. The attorney should be required to notify all creditors of representation within 20 business days of the consumer's signed agreement of that representation. While most attorneys do notify lenders and/or third party agencies some do not and some do not respond to inquiries concerning representation. After the first lender/third party inquiry the attorney should be required to notify the lender and/or agency within 10 business days in writing of representation.

The attorney should be required to notify a lender and/or third party within 7 business days that representation of the debtor has been terminated. It should not be a violation for a lender or third party to contact the debtor after 30 days to only determine if the debtor has continued representation of an attorney if there has been no communication provided by the attorney after 30 days of the initial notification in writing of representation.

I have experienced no communication after the initial notice by the debtor and/or attorney received over 60-90 days and even six months.

If non profit credit counseling agencies can send notification to lenders and third party collectors for representation of a consumer to reduce payments after an initial meeting I believe attorneys should be able to notify in the time periods specified.

Setting rules of notification time frames would benefit all parties.

3|Payment methods, post-dated checks, and how payments are applied - 12

Agency Proposal

Payment methods. Technology has given consumers a lot more payment options than they used to have.

  • How do consumers usually pay debts now? Especially, how often do they use e-pay systems?
  • Do they understand how fast their payments will be processed with these various methods?
  • Do collectors usually charge fees for using certain payment methods? How much for each method?
  • Are collectors making false or misleading statements about what methods are available and what they cost? Does this happen a lot?

Should there be a federal rule that collectors must disclose the cost, speed and reversability of different payment methods?

Post-dated checks. Also, the FDCPA limits what collectors can do about asking for, taking or depositing post-dated checks (FDCPA § 808 (2),(3),(4)). Are there problems with post-dated checks that new federal rules should deal with? Are there similar problems with other payment methods that CFPB should consider?

Applying payments. If the consumer has several overdue debts and makes a payment, the collector is supposed to apply the payment according to the consumer’s directions. The collector may not apply it to a debt the consumer is disputing (FDCPA § 810). Are new federal rules needed here? For example, the rules could set standards for how payments are applied if the consumer doesn't give specific directions. Or the creditor could be required to tell the consumer how it credits payments. Is a rule needed to require the creditor to apply the payment as of the date it is received?

Consumers have complained that collectors keep trying to collect debts that have already been paid off. Others complain that collectors say they will take a part payment as payment in full but then try to collect the rest of the debt. Do collectors usually give consumers a receipt for amounts paid that show whether or not this is payment in full? Should collectors be required to give consumers this kind of payment documentation? Are there any state or local laws that are good models for this?

Read what CFPB said in the ANPRM about Payment Methods and Fees and Payment Acts and Practices.

Comments12

Commenting is now closed.

The majority of the clients I work with try to settle their accounts. The main issue is that most of the collection companies will not provide the client with a letter of agreement until after the payment is made. They also will often wait weeks for a receipt. I have even had clients tell me that the company required a $10.00 payment for the receipt.

After having a perfect payment history for 15 years, I had to across the board default on six accounts because I became an unpaid caregiver for my parents.
However, before I ever defaulted, I contacted each account and explained what was going on. I would also like to note that five of the six accounts were still being paid down until I ran out of savings.

I discovered the credit card companies HAVE NO INTAKE for potential defaulters. I consider a potential default division a cost of doing business that credit card companies have eschewed because they have co-opted the courts to do all the work for them for a very nominal fee. Why pay people to track involuntary defaulters who want to continue making much smaller payments until they can create more income when the account can be written off and parceled out to others who in turn clutter our courts up. My goal was simple, keep making monthly miniscule autopay payments on all six accounts in exchange for no harrassing phone calls so that I could concentrate on CareGiving AND modifying my self employment so that I could make something every month. Everyone refused, and the harrassing and MORE IMPORTANTLY REPETITIVE phone calls started. I ended up having to convert my land lines to 6 dollar a month cell phones, and then I rarely used them because I could not afford the 20 cents a minute cost.

In essence the credit card companies and debt collectors destroyed the best way I had to regenerate earnings while still being an unpaid CareGiver. And as Marlene so eloquently pointed out, an additional roadblock is the debt collectors ABSOLUTE REFUSAL to put any verbal agreement reached in writing!

I often find that some banks wont allow their agencies to take debit or credit card. Why cant I pay with my debit or credit card?? Why do theh wwnt my routing and account number. All agencies should accept debit and credit payments. Its like they are stuck in 1950.

There should never be a fee for payment. In fact, in about 1/3 of the states have state laws that prohibit any fees/surcharges for payment by credit/debit cards (unless it is a government agency). if a debt collector accepts credit/debit cards for payment, there should not be any fees for payment processing. Nor should there be any fees for payment processing for any other payment method for that matter. debt collection companies should also be able to accept prepaid debit cards for payment as a means of privacy and security for the debtors, rather than access to a bank account.

Thank you for your comment, stopwithspoofedcallerID. Do you have a link to any of the state laws that you’ve mentioned? This would make it easier for other commenters to discuss your ideas. Since CPFB is in the fact-finding stage of the rulemaking process, any specific information that you have about the payment fees is beneficial. Do you have any personal experiences with how much the fees are or how often debt collectors charge them?

Payment processor Visa has general information and the corresponding state statutes about the 10 states that prohibit companies from charging credit/debit card fees located on their website. Here are a couple of links from visa. Texas, which most people would think would be business friendly, is actually really consumer friendly when it comes to these fees, for example. Texas has had a long-standing state law against credit card fees, and just recently this year created a new state law to cover against debit card fees and other stored value cards (like prepaid debit cards).

http://usa.visa.com/personal/using_visa/checkout_fees/
http://usa.visa.com/download/merchants/surcharging-faq-by-merchants.pdf
http://www.statutes.legis.state.tx.us/Docs/FI/htm/FI.339.htm
http://www.capitol.state.tx.us/tlodocs/83R/billtext/html/HB03068F.htm

And, no, I do not have any knowledge of if debt collectors are charging debtors payment processing fees or not, but if they are--especially in the states that forbid this practice--they should not be allowed to do so. And I further believe that in the remaining states that do not have any laws forbidding credit/debit cards surcharges, that a fed reg/law should forbid debt collectors in all states from doing so.

Off the top, I believe NYC has similar laws where business are not allowed to charge extra for the use of credit cards however it seems online payments to the city (taxes, water bill, traffic ticket, etc) using a credit card are still assessed a processing fee. It seems NYC itself is confused about this.

I recently discovered that my mortgage company does not have the note on my mortgage and they can not locate the note. I am current and have no concerns on reducing the payment. But in 23 years when am done paying what then . I have asked the mortgage holder what should we do. For the last 8 months they have sent us notices saying they are researching the issue. So what is a consumer to do

Welcome to RegulationRoom, Razz E. If you would like to report the issues you have been having with your mortgage company, you can submit a complaint on CFPB's website. Right now on RegulationRoom, CFPB wants to hear about problems consumers and responsible debt collectors are having in the debt collection industry. After CFPB reviews the comments they've received in this early stage, they will consider more specific proposals for new rules. CFPB will carefully consider what you, and other commenters, have said.

I always pay my debts on time, and this bill collector posts on my account late - which always has a 'late fee'. Is there a way to stop this?

Hi Jet, welcome to RegulationRoom. You may want to submit a complaint to the Consumer Financial Protection Bureau. CFPB's current proposed regulations, however, will only address debt collection for loans that have gone in to default, not bill collection. Have you had any experiences with this kind of debt collection?

I think part of the issue has to do with balance forward billing systems where the payments are automatically applied to the account balance, not to an actual invoice.

4|False or misleading conduct - 42

Agency Proposal

The FDCPA prohibits using "any false, deceptive, or misleading representation or means” to collect a debt (FDCPA § 807). The statute gives many specific examples. Some are discussed in other topic posts:

Also, the collector can’t say or imply that:

  • he/she is an attorney (FDCPA § 807(3)), works for a consumer reporting agency (FDCPA § 807(16)), or is somehow connected with or vouched for by the federal or state government (FDCPA § 807(1)) – unless it's true
  • the consumer committed a crime or other disgraceful conduct (FDCPA § 807(7)), or that not paying the debt will mean arrest or imprisonment, or something else that can’t legally happen (FDCPA § 807(4),(5))
  • the consumer won’t be able to challenge the debt (or will lose other legal rights) because the debt has been, or will be, sold to someone else (FDCPA § 807(6),(12))
  • he/she is going to file a lawsuit, take possession of property, garnish wages, or report the consumer to a CRA unless that action is legal and the collector actually intend to take that action (FDCPA § 807(4),(5);§ 808(6))
  • documents are either (1) official court or other government documents, when they really aren’t (FDCPA § 807(9),(13)), or (2) not official court or other legal documents, when they really are (FDCPA § 807(15)).

Also, the collector can’t let someone else (for example, the original creditor trying to collect overdue accounts itself) use its letterhead or business mark to create the false impression that a collection agency is involved (FDCPA § 812).

Is there anything about these actions that a new federal rule should make clearer, or add to?

The FDCPA says there might be other things that are “false, deceptive or misleading.” Some kinds of conduct are discussed in the post Talking to other people about the consumer's debt:

  • statements to servicemembers
  • statements to spouses and surviving spouses that they are responsible for the consumer's debts
  • statements to authorized users on credit cards that they are responsible for the consumer's debts

Are there other kinds of conduct by collectors that new federal rules should list as false or misleading? How often does this conduct happen and how does it hurt consumers?

Read what CFPB said in the ANPRM about Deceptive Conduct.

Comments42

Commenting is now closed.

The debt collector should not give false information to Credit bureaus, like intentionally changing your address, especially when the person that owes the debt has already supplied the Credit Bureaus with the correct information.

Most debt collectors and collection agency don't report to credit bureaus. I never heard of a debt collector being able to change your address with the credit bureaus. You say you supplied the credit bureaus with your address and a collector changed it?
What did they change it to? What good would it of for a collection company to change your address ? Then they can't mail your letters either.

Sorry, but you are mistaken about debt collectors not being able to change information in your credit file. Yes, they can, and yes they do.
If my account has been sold (several) times to other people, and my original creditor no longer owns the account, then how would my account be (updated/reported) by that company (debt collector) that purchased it?
And, yes they (the person furnishing) the information to the credit bureau can and do supply credit bureaus with fraudulent information. That's how Debt Collector's get sued in the first place.

Hi Patpc101, welcome to RegulationRoom and thank you for joining the conversation. Under current federal law, collectors are not allowed to intentionally give false information to credit reporting agencies. However, debt collectors and buyers may make mistakes when transferring information about a debt that has been sold, resulting in false information. CFPB has questions and ideas about how debt collectors and buyers should transfer information, which you can read and comment on at the Making sure debt collectors & buyers have info about the debt topic page.

You are absolutely right. But, you'd be surprised at how many times this does happen and how many times the Credit Bureaus Do change correct information to false information supplied by the 'furnisher/debt collector'. Because I had to send in numerous Certified Letter to the Credit Bureaus, (all of them), in order to stay on top of all the false information and tricks that they did supply. And I have written proof, that this does and is still happening to other consumers, right now.

Welcome back, Patpc101, you can submit a complaint to CFPB. Their site allows users to attach documents to their complaints.

I have worked in collections for 13 years with mostly first parties. All of these institutions have complied with the FDCPA and seek to service their lost members to the best of their abilities.

Sallie Mae shouldnt be able to send out notices claiming a debtor qualifies for a repayment plan with lower payments and then when the debtor calls they claim no such plan exist.

Can you add falsifying court documents in regards to false service or a sub service?

As an identity theft victim, I have had dozens of experiences with debt collectors. I will start with what I consider the worst of the worst. A large portion of my theft was through online payday loan companies. The thief would deposit payday loans of around $1000-$1,500 into bank accounts she had opened online in my name. Collection agencies buy the debts after they have gone unpaid, and I have not had a positive experience with a single agency that is collecting the debt from a payday loan. They do not care what the FDCPA says, and in many cases, don't even know what the FDCPA is! They will call and leave a message. You return the call to the person and that person is never available. He is always "in court". This immediately sends a red flag to me. I know the FDCPA by heart. The fact is, they want to give the consumer the impression that they are suing debtors constantly and will tell you that your case has been referred to "the courthouse" for filing. When prodded, for example, if I ask which courthouse, you can actually hear them typing in the background as they try to google your county court information. Unfortunately, they never get it right. I have been told it was filed in the Dallas, Connecticut court. The identity thief in this instance had used an old address of mine in Texas and the address was somehow merged with my actual Connecticut address. When I prod further, it becomes even more disturbing. They will not give me their actual name. I have actually been told that the person I was speaking to was Bill. Bill Collector. I have been called names that truly brought me to tears. Their is no debt validation with these collectors. I can't even get the actual company name is some cases. They are debts previously owned by Speedy Cash and Check n Go (Check N Go being the absolute worst) or they are hired by Speedy Cash or Check N Go to collect debts on their behalf. The original creditor is no help at all. Submitting a police report and identity theft affidavit does nothing. They do not care about what the laws state they must do when notified by a consumer with proper supporting documents that the consumer is a victim of identity theft. They will ignore it. They ignore everything sent via Certified Mail. They receive it, but they do nothing with it. The consumer is left to complain to the state attorney general or file a lawsuit. How has the theft of my identity become my problem to fix? Law enforcement will not involve themselves in civil disputes regarding debt. All they will do is provide you with a police report. But they will also accuse you of being your own "identity theft." When I filed my report in person, I was taken to a detective who sat with my husband and myself in a small room with nothing but a small table and three chairs. He documented our information and then he attempted to scare us into confessing to attempting to use the police department as a way to escape our financial obligations. His reasoning was that if the account is in my name, has my birthday and SSN linked to it, why in the world would he consider me a victim of identity theft? What proof do I have? That's the million dollar question. How do you prove you didn't open an account online with Speedy Cash or Check N Go? They do not require so much as a bank statement, a photo ID, an employment verification or even proof of residency. They will deposit a payday loan into an account that IS NOT EVEN IN YOUR NAME. I learned through speaking with these banks that some loans deposited into the accounts in my name actually were loans with an entirely different person's name on the EFT transfer. The banks do not have any kind of system in place to reject transactions that do not match the account holder's name. So the bottom line is, I have no actual PROOF. It is very easy to prove that I DID actually apply for and receive these loans. And the easiest route is always the best route when it comes to detectives who are over-worked, short-staffed, and are under pressure by the Chief to get the case out of the office and on to the DA. I finally convinced him to take my complaint and file a report. But it is completely useless to me. I have tried submitting my police report directly to the credit reporting agencies, who are then required by law to block all fraudulent information. However, there is a loophole there, as well. They don't have to accept your report if they have reason to believe that you have made a misleading or false statement. And when I originally disputed these debts as "NOT MINE" instead of "FRAUDULENT", that was proof enough for them to reject my request for blocking. At the time they were reported, I had not been contacted by any creditor or collector, I had not received any notifications in the mail. All I knew is the accounts were "Not Mine". The system is so broken. Punishment for violating the FDCPA is not harsh enough, and it is up to the consumer to go it alone, hire a competent attorney, and go through the entire process for "$1,000 per violation." How do I even prove a violation when I cannot record a call on my end? Is it worth my money? The time it takes is equally unjustifiable. Collection agencies like the ones I have described that collect for payday loans don't care about the law. They don't follow the law, and until the states or US Attorney General fines these payday loan companies or legislation is made that makes it so that payday loan companies cannot report outstanding debt to ANY consumer data provider, they will continue to ruin the lives and credit of identity theft victims. Because they make it so very easy for thieves to commit a crime. In doing so, the only viable solution for punishing these companies and not verifying that the loan information is actually real, by requiring hard documentation or shutting down the online loan altogether, is for them to have the right to collect on these loans taken away. I have learned many valuable lessons and have much more to share regarding other types of accounts, but in this case, I am guilty. I must hire a team of private detectives, computer forensics experts and expert polygraph examiners to prove my innocence. Identity theft victims as a whole will continue to be guilty until proven innocent until we find a better way to manage credit files. The social security number as identifier of your entire credit history needs to be seriously researched. I think you will find that as a means of identifying a person for credit applications and credit reporting, it is archaic. Who knows how many people have access to my SSN? It doesn't even represent who I am. It hasn't for many years.

It sounds like you have been through a lot. Thank you for sharing your experience and welcome to RegulationRoom, erinintexas. Your story brings up several issues CFPB wants to know more about. In the section about When consumers dispute a debt, CFPB is asking questions about how collectors should have to investigate when a consumer says the debt is not theirs. You can read what CFPB is saying and comment on whether the agency's suggestions would have helped in your case, or whether something else should be done. You may also want to consider filing a complaint with CFPB if you have not done so already.

Debt collectors should announce themselves and refrain from acting like: investigators, attorneys, or hitmen. There needs to be an enforced code of behavior that represents a professional on the other end of the phone. Most recently, my husband has been receiving threatning phone calls from a collector pretending to be a law enforcement investigator. The most humiliating part is that the calls have escalated to his ex-wife, cousin, and associates. He has a common name and the "investigator" has not properly identified himself or clearly identified if my husband is the right person that the debt belongs too. In addition, the so called debt is 8 yrs old, and they call from unknown numbers or if the number shows up and it's googled there are comments stating that the persons calling are harassing.

Thank you for sharing your story and welcome, sugarieme. Some of the conduct you mention is talked about in the post, Talking to other people about the consumer's debt. You can read more about the issues around collectors talking to family members and associates and comment on them, here.

Many states currently have laws that make it illegal to engage in debt collection without being licensed to do so in the state. However, this does not stop debt collectors from violating these state laws and threatening to sue individuals, even though they legally cannot because they are unlicensed in the state. This is unlawful and menacing behavior. It would be easier to bring claims under the FDCPA if the act were more clear that threats to sue when a debt collector is unlicensed to collect on a debt in a state is a false, deceptive, or misleading representation. This clarity combined with stronger penalties might serve to better dissuade debt collectors from continuing to violate the law in attempts to collect on debts in state where they have no right to.

Welcome to RegulationRoom, LawStudentAdvocate, and thank you for sharing your suggestion. CFPB has raised the possibility of developing a registration system for debt collectors. Do you think a registration system would address some of the issues you mentioned? How could a registration system be structured to minimize the cost of registration for debt collectors, while still providing adequate information for those who use the registration system?

I'm not sure a registration system for debt collectors really addresses the issue. I'm not exactly sure how the registration system would operate. In MA, consumers can check online to see whether a debt collector is licensed to practice in the state, many just don't know about the website or on a more basic level don't know that the debt collector has no right to try to collect from them. Is the registration system meant to displace state laws requiring licensing of debt collectors in the individual states? I hope that's not the case since states have a strong interest in regulating debt collectors for the protection of its consumers.

Hi, LawStudentAdvocate. Thank you for returning to RegulationRoom. Right now, CFPB is still thinking about whether and how to make a national debt collector registration system. If you'd like to learn more about CFPB's ideas on this, please see the Recordkeeping, Monitoring, and Compliance Requirements section of the ANPRM.

What I don't understand is that loan's company that do not go by the state we lived in but their state like I lived in Pa" The loan company is in Texas! They was not fare with us. Then there was a mortgages company who rip a lot of home owner off in witch was Country Wide and Fennymay put a lot of people on Bankruptcy that having hard time rest of their life!!! I had to do Bankruptcy 13 so I can pay my Debt's! They should give what the people had their mortgages back and wipe out the debt's!!! I still get letter's from NEW YORK STATE COURT about settlements because of CountryWide!!!! If the court know they was wrong"Then wipe out the consumers debt's!!!!

Thank you for sharing your story, stone62man. CFPB wants to know more about consumers' experience with debt collection. You mentioned that you had some problems with loan companies. Were there actions you considered misleading? Can you share more details?

I had a debt collector tell me they told me that if I'd make a payment right then they'd make a payment plan. This was an Amercian Express collector. Once I made the payment they said they're supervisor would have to approve it and they weren't there. But that she would call back at 7pm MST to make the arrangement. Needless to say no one called back and American Express would not make arrangements with me because they said I was able to pay that amount so I shouldn't need arrangements. I was so dumbfounded by the collection practices of American Express. It was from their internal collections department.

Hi sandiiz, welcome to RegulationRoom and thank you for sharing your experience. The FDCPA does not cover debt owners who collect on their own behalf (first party collectors). CFPB wants to know if these collectors should be treated the same as third-party collectors in any new regulations. Based on your story, it sounds like you would support increased federal regulation of first-party collectors like the one you dealt with.

The Consumer Finance Protection Bureau needs to have a large core of undercover agents that get jobs at collection agencies, credit agencies and servicers.

These agents need full federal law enforcement powers with guns and badges so they can perp-walk suspects out of their offices and take them to federal holding facilities for trial when they have proof of criminal activity.

Currently it seems many creditors, servicers and debt collectors consider themselves above the law. There's only two ways to discourage that thinking and that's jail time and/or fines.

After conviction, victims should receive a framed and signed (first name or nickname of the agent) photograph of the perp-walk. They usually don't get their money back but that's something they will treasure.

Although I don’t think that it is necessary for the CFPB to have undercover agents, I do think that the CFPB should create a new class of examiners. Currently the CFPB examiners only do examinations of the financial lenders and nonbank lenders. But since the CFPB is now taking on the collection industry, the CFPB should create a new classification of examiners to do onsite examinations of the debt collection companies. This would not create any harm to the CFPB nor would it impact the CFPB’s budget or operations. The CFPB’s budget is not allocated through congressional legislation – it is allocated through monetary transfers from the Federal Reserve. All the CFPB would need to do is ask for additional transfers from the Federal Reserve to create this new classification of examiners.

These new examiners would help the CFPB monitor the debt collection industry and would help stimulate the economy by adding more jobs. This is a win-win solution.

There is no need for these so-called examiners but there is definitely a need for courageous and dedicated attorneys determined to enforce the laws that the CFPB should pass, laws that protect the ordinary folk, the innocent, those who're unable to protect themselves, even those who may have actually failed to pay their bills because our constitution guarantees the right to our innocence unless proven guilty. We cannot allow expediency to deny us such fundamental rights.

I believe there is such a thing as the Gideon Decision by the Supreme Court that provides for any accused to an adequate defence, so if any debt-collector or creditor for that matter denies the alleged debtor the right to have his day in court or to a proper defence, then the CFPB attorneys should come down hard on such violators. The principle behind any rules promulgated by the CFPB must ensure that no alleged debtor get bullied into paying up or blind-sided by the court into doing so. Sometimes, there are reasons why the outstanding bills are not paid and the consumer should be allowed to confront the creditor to resolve any complaints by the consumer before the bills are paid.

It's a very straight-forward and simple situation actually. All the CFB needs to do is to enact basic regulations that protects the consumer and stipulates very clearly that the burden of proof must be borne by the creditor before any debt-collector can be engaged to pursue such debts. The debt-collector must only be allowed to follow specific guidelines when doing so and the matter should be referred to a small claims court to have both sides plead their case before the court issues a ruling, rather than to allow the claim to be reported to a credit reporting agency that will destroy the credit score or rating of the consumer without his knowledge, which is absolutely wrong.

Only lawful and valid debts, i.e. when a judgment order has been made, should be allowed to be reported to any credit reporting agency, to avoid creditors and debt-collectors from using such agencies to damage the interests of alleged debtors with unfounded or unproven debts.

I still stand by what I said; CFPB should have a large core of undercover agents with arresting powers.

When anyone makes a demand for payment from another party, it is incumbent on that person to produce the evidence to support such demand and not up to the second party to produce evidence that he is not liable for such alleged debt. Otherwise, anyone can create trouble and misery for any person out of mischief, ill-intent or out to make some fast money for himself or even to defame the second party, as proper businesses are adverse to bad publicity.

If the first party claims to represent a third party to collect debt for that third party, then the first party (collector) must produce evidence that he is authorized by the third party to collect a debt for the third party alone because anyone can claim to represent any party in an attempt to defraud the innocent second party.

Hi Benitus, welcome to RegulationRoom and thanks for your comment. In protecting consumers from possible fraud, what kind of authorization do you think the first party should be required to show? For example, would a phone call to the debtor saying that the first party has authority to collect on behalf of the third party be enough?

Thank you so much for contacting me. I would be pleased to provide further thoughts on this matter.

Whoever is writing to collect a debt, whether it's the debt-collector or the creditor, must produce evidence that a debt is outstanding, like an outstanding bill or statement, or a judgment order, because the onus is upon the debt-collector to show what is the subject of claim, instead of making the alleged debtor do the work to find out what is the claim for. It should be sent by certified mail, instead of ordinary mail, to ensure that the alleged debtor would receive it. If the alleged debtor has moved, then the creditor would know of it, rather than take for granted that it has been received.

The worst thing to do is the current practice of giving the alleged 30 days to dispute the claim or else, the claim is deemed to be valid, which is absolutely wrong and places an unfair burden on the alleged debtor while making things easy for the debt-collector or creditor to make money out of innocent victims. If the alleged debtor has gone away, then it would be wrong of the creditor to seek judgment if any order or notice to appear cannot be served. Besides, the onus cannot be placed on the alleged debtor to prove his innocence but the law makes it incumbent on the creditor to prove that the debt is valid.

If a debt-collector is acting on behalf of a creditor, then a copy of such authorization must be furnished together the evidence of debt and the letter of demand or claim from the debt collector. Phone-calls prior to the alleged debtor receiving a proper letter of demand together with the supporting documents must never be allowed, as it would enable crooks to harass the alleged debtor for money, even when such debt does not exist. After sending a proper letter of demand, phone-calls may be made to confirm receipt of said letter and to discuss further steps to resolve the debt if acknowledged or otherwise.

Pasting of notices, etc. by debt-collectors must never be allowed, as it would amount to harassment and again allow crooks to cheat innocent victims. Accounting errors and human failings have often resulted in non-existent debt, that have caused significant grief to innocent victims. Not everyone is sufficiently knowledgeable to defend themselves against frivolous or wrongful claims, so the law must protect the innocent, rather than to serve the interests of service-providers or business owners, since every business must know that risks exist from the time they begin to do business. The law must protect the public from potential crooks and unscrupulous business practices.

The principle in common law is that evidence must always be produced in any attempt to collect a debt, instead of simply demanding for payment and to make matters worse, by veiled threats of further action, etc. Once evidence is provided, the alleged debtor would then know how and what to respond, so that proper resolution can begin, without making the alleged debtor jump through hoops to find out what is going on.

Please let me know if you require further elucidation in this regard.

I am responding to the some of the questions posted by the CFPB on this thread, although not all of these responses relate to false and misleading conduct. In general, I think some of these practices could be discouraged by increasing the amount of the statutory penalty, and providing attorney fees and punitive damages under the statute

Q58: Within the past six months, a debt collector revealed my full social security number, full amount of alleged debt, and other personal information to a family member who only gave them my month and day of birth. I did not provide this family member's contact information to the debt collector. The debt collector never identified to whom I owed the debt.

Today (Jan 2014), I was contacted at home by a man with an entity that called itself "Enterprise Litigation." The telephone number was "private caller." The man, who identified himself as "Shawn LeFay," said he was trying to reach a friend of mine. I asked if he was a law firm, and he said no, he was with "a courier service." I then asked if he was a process server, and he hung up on me. He would not give me his address, and I had no number for him. I called my friend about this strange telephone call, and she said she had received a strange voice message to call someone who had something for her. I think this was a debt collector.

I do not know, in either of the above scenarios, how the debt collector obtained the phone number of my family member or why a debt collector called me at home searching for my friend. In neither case was the contact information provided as a credit reference. I suspect the debt collectors are using some type of tracing technology, either by phone or e-mail. I think this because in the case of my friend, for example, who I haven't e-mailed for about two years, I had recently sent and received several e-mails from her.

Q61: Debt collectors must be required to provide the full name of the company they work for, their full name, the full address, and a phone number with a non-800 area code.

Q82: Recorded messages are of no benefit to the collector or the consumer. The recorded message generally leaves an 888 number that is of no use to the consumer in even reaching the collector who initially called. The recorded messages function as a form of harassment, and even though the law requires they not leave information regarding the alleged debt, they do.

Q83: Collection calls are harassing in nature, especially as most people do not know they must put a request to cease communication in writing and collectors are reluctant to give the identifying information required. I would ask that such recorded messages be barred, especially since they are already the subject of extensive abuse by collectors.

Q85: I have caller id and the only information that appears is an 888 number. There is no other identifying information. If I pick up the phone, I am told to wait for an important message. These robocalls make it impossible to know who is calling me, and I have yet been able to stay on the telephone for the lengthy wait until an agent answers the phone. It is an unproductive and harassing process.

Q86: Debt collectors should absolutely be barred from disguising their identities by altering their phone numbers. This practice is deceptive by nature and confusing to the consumer.

Q89: Consumers should be able to determine the type of communication they receive, if any. This should not be a burden on collectors, as communicating in other forms will likely not reach the consumer at all. Further, by not allowing the consumer to limit contact, the collectors can and do engage in a harassing process of eating up a person's cell phone minutes with useless text messages and robocalls.

Q91: The most productive scenario would be, if the collector is truly attempting to reach a consumer (vs. harass them to death) to obligate them to provide full contact information including a means of contacting the collector that will be answered by a natural person within a certain time period.

Q95: Robocalls should be specified in this section as well as contacting family members or friends. Please note that family members and friends have no way of making these calls stop.

Q97: Yes, a bright-line of one contact a month. Given that most debts are uncollected due to financial issues, it would take a consumer at least a month to be in a better financial position. I would not distinguish between place (home v. work). I would encourage you to keep the new rules as clear as possible with as many exception as possible limited.

Q98: Predictive calling needs to be banned outright. I can only tell you from my experience no one is ever on the line. I have tried to call the numbers back from my caller id, and it is a non-working number for incoming calls. The ban will be violated, but it will function to deter some abuse.

Q99: Yes, it needs to be more stringent. Debt collectors are a type of telemarketer, but I know no telemarketer that would not answer the telephone. If someone is on the "do not call" telemarketing list, they should also be in the "do not call" debt collection list.

Q112: I think it should be an unfair practice for a law firm or lawyer to engage in debt collection. Many consumers receive letters containing statements about their credit sent under the name of a law firm/lawyer. They presume the information is correct, even though the law firm/lawyer will have a caveat that they have not determined the validity of the statement they have just said.

A friend of mine receive a letter from a lawyer claiming his house would be immediately sold at auction if he did not pay his past due debt (the rent for living in his house after he was foreclosed upon) immediately. We went down to court to see if his house was up for auction. I told him it could not be true, but he was so scared he relied on the lawyer's statement anyway.

It is an unfair practice because of the disparity in power and knowledge between the average consumer and the lawyer/law firm. I have also seen the greatest abuses of the law coming from lawyers/law firms, apparently because they believe they can get away with it, which they do.

For example, a collection law firm in Ohio sued in the name of a dummy corporation (which was not registered in the state in which the law firm said it was registered). It filed scores of complaints in municipal court and probably received many default judgments against consumers based upon nothing more than computer printouts and the lawyer's signature on the complaint. It is a numbers games for the law firm collectors, and again, the substantiation for the debts were nothing more than computer printouts. Despite the 6th Circuit taking a hard stance on this firm, this law firm is still not vetting the debt complaints it files (in my opinion).

Q117: Yes, presume individual is charged.

Q118: Ban such communications outright. No helpful information is conveyed via text or cell phone. Keep in mind that any ban will be violated, but a ban will help minimize the abuse.

D. Substantiation

Q123-27: Ohio has a good law that the instrument must be attached to complaint. This law is usually enforced by the judges, but only after the complaint has been filed and the defendant-consumer makes the request. For most consumer debts, the law is unhelpful, as the complaint proceeds directly, almost always, to default judgment.

For example, one of my neighbors recently discovered she had a lien on her house for a retail credit card. She is a senior citizen, and she has no way of removing the lien herself -- and was surprised to discover there was such a lien. It disqualified her from several housing programs.

If lawyers/law firms will continue to be able to function as debt collectors (a practice I think should be banned as inherently unfair), I believe the law firm/lawyer should be held to the same standard in debt collection as in any other type of practice of law: they must have the instrument, the original file, and the prior correspondence and phone calls, if any, of the alleged debtor. They must be prepared to engage in meaningful discovery, and they should not be able to hide a multitude of omissions, errors, and sins behind their signature on a complaint.

Thank you for the opportunity to comment.

Welcome to RegulationRoom Marian, and thank you for your detailed comment. As CFPB moves to the next stage (coming up with specific proposals for new rules), it will be carefully considering what you and other commenters say here.

Could you tell us more about why you think the solutions you proposed would be the best option? For example, you mentioned recorded messages could be used to harass consumers. However, some other commenters have said they dislike getting calls from collectors when no voicemail message is left. What do you think of those concerns?

Any court documents filed by a debt collector that are found to be altered, doctored, should automatically dismiss the action with prejudice and a fine and sanctions against the collector and attorney processing the paperwork

Dear CFPB: I hope you will separate the comments about debt buyers from those about debt collection in general. This is another area where you should throw the book at collectors telling deliberate lies or misrepresentations. On the other hand, there are too many federal suits brought by consumers who were not misled but who allege that the least sophisticated consumer might have been misled by a letter written in good faith. The only ones who benefit are attorneys. The CFPB has power under UDAAP in addition to the FDCPA to punish liars. They should use it. Collectors, who are just lay people in most cases should not be held to a strict liability standard. Punish bad actors but restore reasonableness to the act.

I have experience collection companies who buys the debt from the 1st 2nd or 3rd party add on its fees along with the other companies fees,then submit a new account number to the original account as though it was a new account.So, a original account for the sake of argument was $500.00 turns out to be listed on your credit report as a $3,000 delinquent account. Government laws should not allow this practice to exist.What ever the original account is that's what should be reported not interest and additional fees a collection company deems it can add to your credit bureau report.

New agency rules should stop collections companies from the use of form letters and mailer envelope appearing to look like government or state government departments.

I have had debt collectors call and tell me that I am not cooperating to get the debt resolved, yell at me, tell me I must be lazy or not understand I owe the money. They have called me from 7:00 am to 9:00pm at least 10 times during the day using a different company name, different phone number and location including my city and other cities and states all in the same day. When I tell them I am a senior they tell me to borrow the money from a family member or friend. When I tell them I am not going to do that the harrassment starts all over. Many of them call and act like I am an old friend before they tell me who they are. They threaten to ruin my credit raiting, confiscate my home and belonging and car, The most annoying is when they call and I answer they hang up and call again an hr later and hang up again. I know it is them because I have caller id.

Thanks for sharing your story, Su, and welcome to RegulationRoom. I'm sorry to hear about the difficult experiences you've had. You may be interested in filing a complaint with CFPB, if you haven't already. The American Bar Association also has a list of legal aid agencies by state; one of them may be able to help you with the issues you described.

Student Loans,

Many of the problems that students are facing are with student loans from the private sector. Take for example Sallie Mae, this company has it on file that i dod not graduate from college and i did graduate. Their collections agencies are like loan sharks going to the extreme of making threats and cussing out students who cannot make payments. I know for some people it is easy to make payments on student loans but for many it is a struggle to get by. All students are trying to better themselves and sometimes they simply cannot afford to make payments. Companies like Sallie Mae are in the business of making peoples lives miserable. Their collection practices, customer service and lack of options are usually the reason why students default on their loans. Paying for college is a marathon not a sprint and these companies treat the repayment of student loans like a sprint. I think they need to offer more options to students. I also think private institutions ala the schools that lend money to students need to do a better job at giving students options to prevent default. resolutions and remedy not judgement and default.

Thank you for sharing your ideas and experiences, Joaquin Farinas. The CFPB would like to know more about what kinds of conduct should be listed as false or misleading. Do you have any suggestions on what should be listed as false or misleading conduct in the case of student loans? If so, what are they?

False of misleading are rearranging paper work to suit their claims, false allegations against the lender, personal harassment, humiliation on credit reports, preventing students from seeking consolidation form other companies. Other false or misleading is the assumption that students dont want to repay their loans. That is not true. They also mix up the paper work so much it is difficult to get to the bottom of why the loans are in default in the first place. They need to streamline their services and offer students option in the private loan sector. The institutions should do the same because they treat student loans like mortgage loans.

Or lendee or loan holder, excuse my grammar.

Too many collectors call and never report the "mini-Miranda warning". They call all times of the day and night, and multiple times of the day. If they don't get you because your have called ID, they will change their ID and try again. It is simply harrassment. Many will challenge the the consumer, threaten, and even harrass them to the point that I saw someone actually contemplate suicide.

Also, when a debt is sold, the information for the orginal details need to go with it. many times these collectors will call, and they have no details on debts that are 5 and 6 years old, and the consumer doesn't rememer it. How are they supposed to know what it is?

Welcome to RegulationRoom, Cheryl Hart. Thank you for sharing your experiences. It helps CFPB to know more specifics about consumers' interactions with collectors. Would you mind sharing more details about your experiences with us?

5|People who provide services and assistance to debt collectors - 7

Agency Proposal

The federal law ban on unfair, deceptive and abusive practices covers not only debt collectors, but also “service providers” and others who “knowingly or recklessly provide[s] substantial assistance” to collectors. (Dodd Frank Act 12 USC § 5536).

What kind of services and assistance do collectors get? Are service providers and other assistants involved in unfair, deceptive or abusive behavior in debt collection that new federal rules ought to deal with?

Read what CFPB said in the ANPRM about Service Providers and Third-Party Liability for UDAAP Violations

Comments7

Commenting is now closed.

Please go hard after the service industry. They have done a lot to foul up the debt collection process by having their service people FALSE SERVE and FALSE SUBSERVE prospective debt collection alleged defaulters. It's happened to me twice, the first time the process server simply guessed by using the most generic age size, weight and assign a made up name! The second time the servicer simply called the sub server "Jane Doe" and once again made up the most generic cut across as many age, height and race descriptions they could come up with, which meant they could not be more far off. Then when I went to court I just happened to hear another defendant make the claim to the judge that they were never served, that the paper work was left outside the door. Besides the service company lying in court documents about serving someone that was not actually served, which in and of itself should be enough to give the judge some type of latitude to do something to protect the defendants, when a debt collector knows they can get a false service, they have MUCH LESS MOTIVATION to negotiate with the defendant. Judges don't seem to get this aspect of false service. Although the fact that the debt collectors and their hired agents are lying in court documents should be enough, no? I know what I know and I will state unequivocally anywhere that I have twice been false served/subserved.

I would like to see strict regulation of the so-called "skip-trace" vendors. These are the companies that debt collectors and others hire to provide them with contact information. From my own personal experience (common last name, many debt collectors after me), I can say that I believe that I'm at the mercy of these vendors. They gather all sorts of information about people without verifying any of it, as far as I can tell.
One debt collector told my state's Attorney General that they hired one of these vendors who provided my phone number as a valid contact for someone with my last name and first initial. This person was a stranger to me, but the debt collector wanted me to pay the debt.
I think that these vendors should be strictly regulated and use a research tool other then the phone book to gather their information. They should not be able to provide "valid" information unless it really is valid.

I would take a hard look at 'credit reporting' from what is being reported by a creditor and then what is reported by a debt collection or debt buying company. For example, if a creditor obtains a judgment amount greater than the account balance, that amount is likely not reported because creditors seldom have system capabilities to make adjustments to accounts.

There are laws on the books. There is no enforcement by the regulators.

I am not sure where my comments fit. I am all for consumers right protection but when you see CFPB, FDCPA and other law they are all to make it difficult for collection agencies to do their honest job. But there is never a talk about consumers responsibilities. I agree that some collection agencies are aggressive. but I think a good honest collection agencies also need their rights to do honest work.

Welcome to RegulationRoom rashidnasim, and thank you for commenting. CFPB is very concerned about the issue you raised, and wants to make sure that any rules it makes to protect consumers don’t push responsible collectors out of business.

Can you tell us more about your experiences? Knowing more about good collection practices from people like you can give the agency the information it needs to strike the right balance.

Thanks for reading my comments. It would take me many pages to respond, but I will try to keep it very short and you will understand my point.

1. Why a collector require to get consent to call on Cell Phone. In this day and age, cell phone is the way of communication.
2. Why there are so many restrictions to use Predictive Dialing capabilities. It simply makes collectors more efficient.
3. Why do collector required to mail certain letters within certain time frames. It should be collector to decide when a letter is needed.

I can go on and on. I guess you get my point. Law should only be around aggressive collection methods. But when someone owes money they have certain responsibility to make good on their commitments and if you would ask me, all these laws and cottage industry of lawyers created by these laws is simply not helping honest collection service business.

6|Substantiating claims about the debt and the effects of payment on credit - 13

Agency Proposal

Collectors may not use "any false, deceptive, or misleading representation or means" to collect a debt (FDCPA § 807). For a long time, the FTC has said that it's deceptive for a company to make a statement unless it has "substantiation"-- that is, adequate support for the statement when they make it to the consumer.

Should new federal rules set standards for the substantiation of claims that collectors commonly make? If so:

  • what types of claims?
  • what level of support?
  • should the kind of substantiation needed depend on the kind of debt? Is it more expensive or difficult to substantiate claims for some kinds of debt vs. others?

Should the kind of substantiation needed depend on the stage in the collection process? For example, how should collectors support a claim that the consumer owes the stated amount:

  1. prior to sending the validation notice?
  2. after the consumer has disputed the debt?
  3. after the debt has been verified?
  4. before bringing a lawsuit?

Collectors may make claims about the effect of payment on the consumer's credit report. What information should creditors have to support a claim that payment of the debt will:

  1. improve the consumer's credit score?
  2. remove the collection trade line from the consumer's credit report?
  3. improve the consumer's creditworthiness?
See what CFPB said in the ANPRM about Substantiation.

Comments13

Commenting is now closed.

If federal rules can be ignored by local/municipal/state laws then the federal laws are irrelevant. Consumer credit is recognized in all 50 states and internationally. As such these laws should be enforced by each state and lower courts and states and such should not be able to make laws that ignore of superseed federal law.

Current debt substantiation requirements all suffer from the same significant shortcoming in that they fail to address the often symbiotic relationship between first-line creditors, collectors, reporting agencies, consumer data clearinghouses, buyers of bad debt, and others industry players. Each has a vested profit motive in the "validation" of debt. Without appropriate disincentive--i.e., enforcement of rules and stiff penalties for non-compliance--corners are cut and quid pro quo-type behaviors begin to surface. Consumers hold few cards and have to play against a stacked deck. The validation process should involve more than merely inquiring with the creditor about the validity of the debt or the identity of the debtor, and failure to observe all the necessary steps--in the sunshine, no less--should have severe consequences. The best deterrent would be putting the power back in the hands of the (truly-wronged) consumer through the inclusion of "private attorney general" style enforcement mechanism. Awarding attorneys' fees and damages, with the ability to elect either actual or meaningful statutory damages (similar to the scheme introduced by Congress into the copyright statutes), would create serious disincentives for anyone involved in unscrupulous validation practices.

Welcome to RegulationRoom, cmd07, and thank you for your comment and suggestion for an enforcement mechanism. CFPB doesn’t have legal authority over absolutely every aspect of debt collection, and rules about collection litigation are a complicated mix of state law and federal law. But as CFPB moves to the next stage (coming up with specific proposals for new rules), it will be carefully considering what you and other commenters say here.

As someone who has dealt for over two years with a rogue collections company putting a debt I don't owe on my credit report, I think these debt buyers should be disallowed by law. Legitimate third parties can operate, but these fly by night businesses who buy for pennies on the dollar without a care as to whether the books are correct should be fined and put out of business. In other words, the regulations should be so tough that they can't afford to stay open. They only wreak havoc on people. I have dealt with an unscrupulous company for two years; my state Attorney General was involved in getting it removed from my credit report with 1 agency, only to have this company report the same to another agency. No collection should be allowed on the credit report until verified 100%. And if the debt is more than 2 years old, the creditor must notify the supposed debtor in writing and allow 30 days for a response--denial, request for proof, payment, etc.--before putting it on the credit report.

Welcome to RegulationRoom, buckeyeml, and thank you for your suggestions. Because of your experience with disputing a debt, you may want to read and comment on CFPB's questions and ideas about verifying disputed debts on our topic page, when consumers dispute a debt. CFPB wants to make rules that protect consumers from abusive practices but also allow legitimate collectors to work in a cost-effective way. We hope you'll visit the topic page on disputed debts and share more about your experiences and suggestions.

The CFPB should absolutely adopt rules concerning substantiation of purported debts and, where a consumer timely disputes the existence or amount of a purported debt, alleged creditors and debt collectors should be prohibited from reporting any adverse information to CRAs about the debt and CRAs should be prohibited from including any adverse information on a consumer's credit report about the debt until after the debt collector or creditor obtains a final non-appealable judgment substantiating that the debt is in fact owed and the amount of the debt. Currently, debt collectors are attempting to collect upon purported debts and reporting negative information to CRAs based solely on assertions by creditors that a debt is owed. Further, the "verification" of a debt is usually nothing more than a piece of paper from the purported creditor stating the amount of the debt that the purported creditor asserts is owed. Even where the consumer has disputed the existence of the purported debt in light of, for example, legitimate legal defenses and counterclaims, the creditor or debt collector often times reports negative information to the CRAs thereby damaging the credit profile of the consumer. Although the FCRA requires that the CRA notate that the debt is disputed by the consumer, the damage to the consumer's credit standing is already complete as potential lenders and/or employers will see the negative information on the credit report and may take adverse action in connection with their lending or employment decisions based solely on the fact that negative information appears on the consumer's credit report. As a result, the threat of negative reporting by debt collectors to the CRAs can be highly coercive, unfair and deceptive in that a consumer may feel forced to pay a purported debt, even if the debt is legitimately and in good faith disputed, to avoid adverse information appearing on their credit report. I have recently personally encountered this exact situation after I became involved in a dispute with a property management company as to whether a lease termination fee was due under the terms of the lease for an apartment that I had vacated prior to the expiration of the lease. The property management company and I disagree as to whether the express terms of the lease require the payment of a lease termination fee. After I refused to pay the property management company for any lease termination fee, the property management company contacted a debt collector and asserted that I owed a debt notwithstanding that I have repeatedly disputed by notice to both the alleged creditor and the debt collector the existence of the debt under the express terms of the lease. The debt collector has proceeded to report negative information to the CRAs which has negative impacted my credit standing even though there exists a legitimate ongoing dispute as to whether the debt even exists in the first place. Further, the debt collector's "verification" of the debt was nothing more than an invoice from the property management company indicating the amount that the property management company asserts is owed. Under circumstances where a consumer timely disputes the existence of a debt or the amount of the debt, creditors and debt collectors should be prohibited from reporting adverse information to CRAs and CRAs should be prohibited from including adverse information on a consumer's credit report about the purported debt until the creditor or debt collector obtains a final non-appeable judgment so as to avoid the highly coercive, unfair and deceptive consequences to consumers. Further, a "verified" or "substantiated" debt should not be deemed to exist until a final non-appealable judgment is obtained under circumstances where the consumer timely disputes the existence or amount of debt. Such a rule would ensure that creditors and debt collectors only pursue litigation for debts they believe actually exist and avoids adverse impacts to consumers prior to the time the debt is verified and substantiated by a final non-appealable order of a court of competent jurisdiction.

Welcome to RegulationRoom, Anonymous, and thank you for sharing your story. It sounds like you think that a debt should not be "substantiated" until after the collector has obtained a final non-appealable order in court. Could this approach lead to more litigation? What do others think of this level of substantiation?

Given the highly coercive consequences of having negative information reported to or by CRAs on consumer credit reports, I think it is reasonable that a debt not be deemed "verified" or "substantiated" unless and until there's a final non-appealable order, but only in circumstances where the consumer has timely disputed the existence or the amount of the debt. Currently, if you dispute a debt, the debt collector reports you to the CRAs and your credit standing is adversely impacted; i.e., the damage is already done at that point. In other words, the notation on the credit report that the debt is disputed by the consumer is largely ignored by potential lenders, employers, landlords, etc. Thus, disputing the debt does nothing to prevent harm to the consumer. The debt collector and creditor threaten to report you to the CRAs as a coercive tactic to force you to pay a debt even though you might legitimately not owe the debt or the amount claimed to be owed.

As for my proposal, I do not think this will lead to more litigation. Just the opposite. If a consumer doesn't timely dispute the debt, then the debt can be deemed verified or substantiated. If, however, the debt is timely disputed, creditors and debt collectors will have to evaluate whether to initiate litigation and weigh the likelihood of prevailing at trial and this may cause creditors and debt collectors to be more judicious about which debts to take to trial. This proposal would also protect consumers from having their credit standing negatively impacted until after it is conclusively determined that a purported debt that is disputed is in fact owed and the amount of such debt is conclusively determined.

As an alternative to my initial proposal, a rule could be adopted that would impose significant statutory penalties, treble damanages and recovery of attorney's fees against creditors, debt collectors and CRAs in the event the consumer can prove either the disputed debt doesn't exist or the amount of the debt is less than that claimed to be owed. This approach, however, places the burden of proof on the consumer and I feel strongly that the burden of proof should be on the creditors and debt collectors to affirmatively prove the existence and amount of any disputed debt before a consumer's credit report is adversely impacted.

The CFPB should adopt a ruling that, under circumstances where a consumer timely disputes the existence or amount of a debt, reporting adverse information to a CRA about such disputed debt or including information about a disputed debt by a CRA on a consumer's credit report is an unfair and deceptive act or practice until such time that the creditor or debt collector obtains a final non-appealable judgment substantiating the existence and amount of the debt.

There are still too often abuses by debt collectors in regard to time-barred debts. Zombie debt collectors who use partial payments, acknowledgement of the debt in writing, or other tactics are effectively hard-wiring around the laws having to do with the statute of limitations. I have witnessed situations where consumers were effectively tricked into setting up a series of payments on a long time-barred debt. Collectors continue to take advantage of consumers for whom ESL and also those who are unsophisticated and possibly naive.

Hi Juliana James, welcome to RegulationRoom and thank you for commenting. On the Old debts topic page, CFPB asks whether a summary of consumer rights explaining time-barred debts would be appropriate. Do you think that there should be a required summary or notice sent to consumers with time-barred debts? What sort of information should the summary or notice include?

I will transfer this response to the appropriate topic page.

In answer to the question:

1 - Collectors should be barred from stating that payment of a debt will definitively improve a consumers credit score as FICO (the industry standard) uses proprietary algorithm that the collection agent cannot possibly guess at.

2 - Yes, a collection agent, in good faith negotiation for resolution of the alleged debt should be able to remove the collection trade line from the consumers credit reports which should be stipulated in a binding settlement agreement signed by both parties.

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