Archives for August 2013

Congress Turns up the Heat on Debt Collectors

Medical and student loans now surpass other consumer debts.  Collectors are violating the Fair Debt Collection Practices Act (FDCPA) by threatening physical harm, threatening to dig up their dead children, calling repeatedly and attempting to collect on debts the collectors know are not collectable.  The Consumer Financial Protection Bureau(CFPB) and the Federal Trade Commission (FTC) are cracking down on companies who engage in overly aggressive debt collection practices and are reaching out to consumers to educate them about the law.  This crackdown lead to the largest civil penalty ever obtained by the FTC.  Expert Global Solutions, the nation’s largest debt collector paid $3.2 MILLION for violating the FDCPA.  However, federal officials are calling for new stricter laws on how debts are bought and sold between companies. Debt collectors often buy old debts in bulk.  They do not have the ability to obtain the data needed to accurately verify information about the debtor or underlying loan. Congress wants increased regulation that would:

require debt collectors to have possession of the documentation before issuing the first debt collection notice.

require information about previous debt collection attempts.

Prohibit the collection of unverifiable debts.