The agency needs to be careful of new rules that will, though unintended, be harmful to the free market. However, it is important that litigation is monitored to ensure that the system does not allow reward with no risk. A plaintiff in a lawsuit cannot be placed in a situation where it is rewarding to sue with insufficient cause and minimal risk.
Creditors and those following in the process of recovery do not need additional regulation in this area since their efforts are monitored by the CFPB. The CFPB does not need to set standards for the industry, but make it clear that only those documents provided to the court in the original filing will be considered in a CFPB review. If in the course of a CFPB review, it is found that litigation was filed without a successful verification of the facts, the CFPB could award the amount sought by the filing to the defendant of the case and a fine to the CFPB of no less than $2,000 but no more than the amount sought.
This position would motivate the litigant to ensure their facts were correct before any filing took place. This position would allow CFPB to review cases filed no matter how they were adjudicated by the involved court. This review could be conducted at CFPB offices since it only requires the original filings. This review could be initiated simply based on a complaint to the agency's offices. The penalty could be adjustable based on a variety of agency standards.
I would have to take more time to consider when the plaintiff was not the original creditor or a member of the recovery industry, but, again, there must be a risk associated with the reward to stop nuisance suits.
It is important that a consumer receives notification that an account has arrived with a third party vendor. But a blanket notice covering every situation that may happen between now and the end of time should not be included in that notice.
The initial notification should include the following facts:
1. The original creditor
2. The amount of the claim
3. The last date of charge to the account
It should also include the following information:
1. If you do not recognize this obligation, please call our customer service line for additional information. Please understand that you will be expected to identify yourself before customer service would be able to provide that information. Utilize this toll-free number to reach customer service. You will not be able to speak with a debt collector on this line.
2. If you do not believe that you owe this money, contact customer service for information regarding your right to dispute a bill. This request can also be made by mail or you can find this list at CFPB.com
Finally, of course, the recovery industry can include a request for full payment of the obligation or a call to discuss resolving the matter. The bottom of the notice should include "This notice has been generated by a debt collector."
The CFPB should determine what standard information needs to be made available for verification of a debt and the collection industry should be required to provide that information when requested. The list should be standard and available on websites of the CFPB and sent by every member of the industry upon request. i believe the list should be:
1. Original Creditor account number
2. Itemized statement of obligation including amount and date of last charge and payment
3. Type of debt
4. Signed contract if debt was the result of a contract
5. Location where services or sale was initiated
6. Any other brand name/business consumer might recognize associated with the obligation (if applies)
Splitting these obligations of the recovery industry serves a positive consumer purpose as well as better serving the industry. Additionally, you will notice that I ignored the legal notification portion completely. Upon introduction is definitely the incorrect time to speak of legal action, the industry should be required to provide this notification only in cases that reach a minimum of a 50% chance that suit would be involved. This notification would have to be documented as sent no less than 45 days prior to taking any legal action.
More information to the consumer with the initial notification would be more confusing and intimidating than it already is for them. Simplifying the initial notification while including information about how to contact someone if you do not recognized this obligation is the way to go. Then the CFPB can design and require everyone to send a separate Summary of Consumer Rights to a consumer. It could also be available in the exact same form on the CFPB website and on informed professionals websites within the industry.
I would maintain the consumer's right to ask for a cease communication, but I would suggest that the CFPB would serve everyone better by including that the CFPB would suggest that the consumer may be better served by keeping this communication available except as a last resort.
This solution also bears the added advantage of making sure the public is aware of the assistance available through the CFPB.
Legally, I don't believe that CFPB authority should stretch into this area since the federal laws do not include such a limitation.
Notification to a consumer that a debt is beyond statute is problematic since that date is not permanent. Partial payment on an account restarts the statute of limitations. How do you then inform the consumer that your prior letter is no longer correct? How does the CFPB protect the rights of the collector in court from their required notification?
I don't believe that a rule issued by the CFPB can help here. Education of consumers is the only pro-active method that I see as available here. However, this education should include notification to the legal profession that the CFPB will bring violations in this area to the attention of the Attorney General in their state.
The burden of proof cannot be placed anywhere else, JClark53. But, a disputed account is rare. Most people are aware of their obligations, but just cannot pay them now. Starting the process should be simple and clear to each party, not talk about judgments or disputes where it is unlikely that either apply.
LarryS
1
The agency needs to be careful of new rules that will, though unintended, be harmful to the free market. However, it is important that litigation is monitored to ensure that the system does not allow reward with no risk. A plaintiff in a lawsuit cannot be placed in a situation where it is rewarding to sue with insufficient cause and minimal risk. Creditors and those following in the process of recovery do not need additional regulation in this area since their efforts are monitored by the CFPB. The CFPB does not need to set standards for the industry, but make it clear that only those documents provided to the court in the original filing will be considered in a CFPB review. If in the course of a CFPB review, it is found that litigation was filed without a successful verification of the facts, the CFPB could award the amount sought by the filing to the defendant of the case and a fine to the CFPB of no less than $2,000 but no more than the amount sought. This position would motivate the litigant to ensure their facts were correct before any filing took place. This position would allow CFPB to review cases filed no matter how they were adjudicated by the involved court. This review could be conducted at CFPB offices since it only requires the original filings. This review could be initiated simply based on a complaint to the agency's offices. The penalty could be adjustable based on a variety of agency standards. I would have to take more time to consider when the plaintiff was not the original creditor or a member of the recovery industry, but, again, there must be a risk associated with the reward to stop nuisance suits.
View this comment in the discussion thread
LarryS
2It is important that a consumer receives notification that an account has arrived with a third party vendor. But a blanket notice covering every situation that may happen between now and the end of time should not be included in that notice. The initial notification should include the following facts: 1. The original creditor 2. The amount of the claim 3. The last date of charge to the account It should also include the following information: 1. If you do not recognize this obligation, please call our customer service line for additional information. Please understand that you will be expected to identify yourself before customer service would be able to provide that information. Utilize this toll-free number to reach customer service. You will not be able to speak with a debt collector on this line. 2. If you do not believe that you owe this money, contact customer service for information regarding your right to dispute a bill. This request can also be made by mail or you can find this list at CFPB.com Finally, of course, the recovery industry can include a request for full payment of the obligation or a call to discuss resolving the matter. The bottom of the notice should include "This notice has been generated by a debt collector." The CFPB should determine what standard information needs to be made available for verification of a debt and the collection industry should be required to provide that information when requested. The list should be standard and available on websites of the CFPB and sent by every member of the industry upon request. i believe the list should be: 1. Original Creditor account number 2. Itemized statement of obligation including amount and date of last charge and payment 3. Type of debt 4. Signed contract if debt was the result of a contract 5. Location where services or sale was initiated 6. Any other brand name/business consumer might recognize associated with the obligation (if applies) Splitting these obligations of the recovery industry serves a positive consumer purpose as well as better serving the industry. Additionally, you will notice that I ignored the legal notification portion completely. Upon introduction is definitely the incorrect time to speak of legal action, the industry should be required to provide this notification only in cases that reach a minimum of a 50% chance that suit would be involved. This notification would have to be documented as sent no less than 45 days prior to taking any legal action.
View this comment in the discussion thread
LarryS
3
More information to the consumer with the initial notification would be more confusing and intimidating than it already is for them. Simplifying the initial notification while including information about how to contact someone if you do not recognized this obligation is the way to go. Then the CFPB can design and require everyone to send a separate Summary of Consumer Rights to a consumer. It could also be available in the exact same form on the CFPB website and on informed professionals websites within the industry. I would maintain the consumer's right to ask for a cease communication, but I would suggest that the CFPB would serve everyone better by including that the CFPB would suggest that the consumer may be better served by keeping this communication available except as a last resort. This solution also bears the added advantage of making sure the public is aware of the assistance available through the CFPB.
View this comment in the discussion thread
LarryS
4
Legally, I don't believe that CFPB authority should stretch into this area since the federal laws do not include such a limitation. Notification to a consumer that a debt is beyond statute is problematic since that date is not permanent. Partial payment on an account restarts the statute of limitations. How do you then inform the consumer that your prior letter is no longer correct? How does the CFPB protect the rights of the collector in court from their required notification? I don't believe that a rule issued by the CFPB can help here. Education of consumers is the only pro-active method that I see as available here. However, this education should include notification to the legal profession that the CFPB will bring violations in this area to the attention of the Attorney General in their state.
View this comment in the discussion thread
LarryS
5
The burden of proof cannot be placed anywhere else, JClark53. But, a disputed account is rare. Most people are aware of their obligations, but just cannot pay them now. Starting the process should be simple and clear to each party, not talk about judgments or disputes where it is unlikely that either apply.
View this comment in the discussion thread