WASHINGTON–A consumer group is urging the CFPB to ensure it revisits its rules around debt collection.
As CUToday.info reported, the Bureau announced it will not provide any more extensions and that two final rules issued under the Fair Debt Collection Practices Act (FDCPA) will take effect as planned on Nov. 30.
The National Consumer Law Center said the debt collection regulations contain “many elements that will be harmful for consumers.”
“The CFPB indicated that it can still revisit the rules in the future, and we urge them to do so,” said NCLC staff attorney April Kuehnhoff. “In the meantime, we call on states to enact additional protections to prevent vulnerable families still recovering from the pandemic from harassing and abusive debt collection practices.”
‘Concerning Practices’
The NCOC said the “concerning practices” it wants the Bureau to examine and that might be allowed include:
- Phone Calls. “Collectors might harass consumers by making up to seven attempted calls per week per debt, either to the consumer or to friends and family to ask for the consumer’s contact information. A consumer with five medical accounts in collection could receive 35 attempted calls per week.”
- Electronic Communications without Consumer Consent. “Collectors can use electronic communications to contact consumers unless the consumer opts out,” NCLC said. “Requiring an opt-out rather than requiring collectors to obtain consumer consent is more likely to result in missed messages - including critical required disclosures - if collectors use old contact information or communications are sent to spam. Privacy may also be violated if messages are viewed by others, including employers. Procedures to reduce third-party disclosures are currently optional for debt collectors.”
- Oral Collection Notices. “The CFPB has said that collectors can provide required collection disclosure notices orally despite the increased amount of information required in the notice under the regulations. This will make it difficult for consumers to understand or remember important disclosures about the alleged debts and their debt collection rights.”
- Time-Barred Debt Collection. “Collectors can still pressure consumers to pay debts that are beyond the statute of limitations,” the NCLC stated. “They are prohibited from suing or threatening to sue on time-barred consumer debts, but they can pressure people to make payments using tactics that are likely to confuse people, and collectors may still be able to sue if a consumer inadvertently revives the statute of limitations through a partial payment or acknowledgment made after pressure from collectors.
More Than 60-Millon Affected
According to the NCLC, the CFPB’s debt collection rule will affect at least 68-million people in the United States, and that Urban Institute data indicate 29% of adults in the U.S. with credit reports have debt in collection. That number goes up to 39% for those residing in communities of color, it added.