Proposed rules beef up consumer protections in debt collection
The Consumer Financial Protection Bureau on Thursday outlined proposed new rules to rein in third-party debt collectors and debt buyers.
The proposed rules require the debt collectors to substantiate the debt before calling consumers; limit their attempted contacts to six times a week; disclose more information about the debt in initial collection notices; and temporarily stop collections if the consumer disputes the debt.
The proposals would also make it easier to for consumers to dispute debts by using a “pull-off” portion of the debt notice, and to direct the calls to a different phone or different time of day. The proposals are outlined in this press release and outline; publications with coverage include the New York Times DealBook blog, the Los Angeles Times, the Wall Street Journal (sub. req.) and the Washington Post.
According to DealBook and the Wall Street Journal, the proposals are the first time in nearly 40 years that federal regulators have sought to significantly strengthen debt collection rules.
The CFPB intends to separately address debt collection rules affecting banks and other first-party creditors who collect debt from their own customers.
See also:
ABA Journal: “Debt-buying industry and lax court review are burying defendants in defaults”
