Home Consumer Financial Protection Bureau CFBP Proposes New Legislation On Debt Collection

CFBP Proposes New Legislation On Debt Collection

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The United States Consumer Financial Protection Bureau wants to revise rules regarding the collection of consumer debt that have held strong at the federal level for longer than 40 years.

The set of rules was released by the Consumer Financial Protection Bureau just yesterday, on Tuesday, May 7, 2019, in a report that also indicated that government agency would make criminals out of debt collectors that buzzed their debtors by phone upward of seven times per week.

In the event that the debtor answers the phone, the debt collector would legally be required to put off their attempts at contacting debtors for a full week.

Creditors, or entities that have claims against debtors for money, are almost entirely for the bill thanks to a number of benefits that the rules would provide to them. One of the most significant of these benefits is the legal ability to email or text debtors to solicit payment of the accounts owed.

Unlike phone calls, the CFPB’s new set of rules would grant debt collectors the protection of being able to solicit their debtors as many times as they want via text messages and emails. The most recently signed legislation on the issue of debt collection from the Consumer Financial Protection Bureau came in 1977 in the form of the Debt Collection Practices Act.

Fortunately, consumers would be able to opt out of receiving the solicitations via email or text message.

Statistics from the CFP indicate that some 80,000 Americans filed formal complaints on debt collection practices in 2018 alone.

Currently, the United States is home to nearly 75 million residents who have debts that have officially reached the stage of collections. This number is almost certain to increase in the future as the gap between the wealthy and the lower class continues to grow apart, resulting in a shrinking middle class that otherwise wouldn’t need to take out consumer debt.

In the past, debt collectors have been able to threaten to file lawsuits against debtors whose accounts have long been in collections. The current book of laws would not allow debt collectors to communicate, directly or indirectly, to American consumers that they would sue them in a valid court of law.

Consumer advocates are against the proposed legislation for several reasons, though one of the most important is about requiring debt collectors to put forth certain kinds of documents to legally be allowed to pursue overdue accounts.