A new regulation passed by The Consumer Financial Protection Bureau
(“CFPB”) will hold banks accountable for their conduct when
collecting debts under the Fair Debt Collection Practices Act
(FDCPA”). Previously, only third
party collection agencies and not original creditors, were
forced to comply with the standard of conduct required under the
Act. Under this regulation, banks can be held accountable for
conduct and may be subject to fines for
collection tactics that violate the law.
Director of the CFPB, Richard Cordray, stated that it is time to
hold all parties responsible for collecting debts to the same
standard as we hold collection agencies when using
deceptive, unfair or abusive collection practices. The
FDCPA has been in existence since 1977 and there is no reason an
original creditor should be allowed to mistreat consumers solely
because it is not a collection agency and not subject to the laws
of the FDCPA.
This new regulation is meant to serve as a warning to banks to
tread carefully and comply with the FDCPA when collecting theirs
debts from consumers. The reason for the additional
regulation comes following a steadily increasing number of
complaints received by the CFPB and the Federal Trade Commission
(“FTC”) from consumers on how they were treated by original
creditors collecting debts. Specifically, last year it was
reported that several banks engaged in illegal tactics when
credit card debts that included refusal to verify debts and
falsely representing the amount of debt owed from consumers.
The new regulation aims to stop this harassment and force banks to
be held accountable for their conduct and give back consumers the
right to be treated fairly.
If you are having problems with debt collection contact SmithMarco
P.C. for a free case review.