WASHINGTON–A coalition of 232 nonprofit organizations from all 50 states and the District of Columbia have sent a letter to the Consumer Financial Protection Bureau (CFPB) in response to its proposal that the group said “protects abusive debt collectors more than consumers.”
“Instead of giving the debt collection industry more weapons to harass and abuse consumers, the coalition urges the consumer bureau to limit the number of phone calls per week, require consent of the person before sending emails or text messages, allow people to opt-out of electronic messages, hold debt collection attorneys responsible for misrepresentations, and prohibit the collection of ‘zombie debt,’ the groups said in a statement released in conjunction with the letter.
Among the groups signing the letter are the National Consumer Law Center, Americans for Financial Reform, Consumer Federation of America, National Association of Consumer Advocates, U.S. PIRG, and Woodstock Institute. The groups also sent 227 pages of submitted technical comments.
Points Made
The groups said the CFPB proposal weakens major consumer protections established by the Fair Debt Collection Practices Act by:
- Allowing collectors to ring people seven times per week per debt. For example, someone with eight medical debts could hear the phone ringing 56 times a week, the groups said.
- Authorizing collectors to send emails, texts, and private social media messages without consumer permission and with no set limits, and to send important information through hyperlinks
- Allowing debt collectors to collect on “zombie debt” that is so old that the deadline for a lawsuit has passed and records of who owes the debt and for how much may be lost
- Protecting attorneys who file baseless lawsuits against the wrong consumer or for the wrong amount without verifying account documents.
Proposal a ‘Gift’ to Abusive Collectors
“The CFPB’s proposal greenlights collection of old debts past the legal deadline to sue, misrepresentations by collection attorneys, harassment and privacy violations by phone, email and text, and even security risks by requiring people to click on hyperlinks to get required information about a debt and their rights. The current consumer bureau proposal is a gift to abusive debt collectors and the final rule must include much stronger protections for consumers,” said Lauren Saunders, associate director at the National Consumer Law Center.
“This proposal does not come anywhere near protecting consumers from predatory debt collectors. In fact, it allows the debt collection industry to abuse and harass consumers more than is currently allowed,” added Linda Jun, senior policy counsel for Americans for Financial Reform Education Fund. “This proposal follows a consistent trend, set by the CFPB and its director Kathy Kraninger, of turning its back to consumers every step of the way.”
“The CFPB’s debt collection spam plan is incredibly unpopular, likely illegal, and payback for the over $340,000 the debt industry funneled into Republican campaigns including Donald Trump’s,” said Jeremy Funk, spokesperson for Allied Progress. “When Director Kraninger decided to grant the industry’s wish for more options to harass consumers, did she ever wonder, ‘Would I mind getting never-ending texts from strangers asking for money?’”