Know Your Rights

Preparing for Changes from CFPB

With the changes to the rules surrounding the Fair Debt Collection Practices Act ("FDCPA") on the forefront, the Consumer Financial Protection Bureau ("CFPB") warns the debt collection industry to be prepared by making sure they have a plan for compliance in place.  In recent interviews, the CPFB announces it expects collection agencies to have written policies and procedures detailing how it plans to comply with the FDCPA and how it plans to reduce and prevent conduct that may be harmful to consumers.    

While the CFPB has not specifically outlined any procedures for compliance with the FDCPA, it warns collection agencies to be aware of a short list of requirements.  First and foremost, collection agencies should have a plan to protect consumers from any FDCPA violations.  And second, a plan for any other consumer minded statutes or issues presenting consumers, including unfair and abusive practices, collecting on time-barred debts, robo-calling, etc.  The CFPB demands that these plans be specifically outlined in writing so that current and existing employees have a reference and are able to carry out their employment responsibly.      

After outlining a plan for compliance, the CFPB expects the debt collection companies to have procedures in place to ensure compliance by their employees, including training, seminars, monitoring conduct and constant revision to any procedures that seem fit for change.   

The CFPB has set out a list of activities that it suggests the entire collection industry refer to in drafting its FDCPA compliance procedures.  First on the list is litigation.  The CFPB has filed numerous suits against collectors for failing to comply with the FDCPA.  Collection agencies should refer to these suits to make sure their conduct is in line with what the CFPB expects.  Second, collectors should review the CFPB's briefs relating to new issues presenting debtors for an idea of conduct the CFPB deems non-compliant.  Third is credit reporting, the CFPB has addressed issues relating to the effect of debt on consumer credit reports, a specific area of concern for the CFPB.  Compliance with the FDCPA should include a better understanding and compliance with the Fair Credit Reporting Act ("FCRA") as well.  Lastly, collection agencies should pay attention to the collection of medical debt.  Earlier this year, the CFPB issued a report regarding the affect medical debt has on consumers and their credit reports.        

If you believe you are the victim of a violation of the Fair Debt Collection Practices Act and would like the advice or assistance of counsel, contact SmithMarco P.C. for a completely free case review.

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