Noting that debt collectors trigger more consumer complaints than any financial product or service, the Consumer Financial Protection Bureau (CFPB) unveiled plans yesterday to rein in the most serious abuses, the Pittsburgh Post-Gazette reported today. “We are considering proposals that would drastically overhaul the debt collection market,” CFPB Director Richard Cordray, said. “This is about bringing better accuracy and accountability to a market that desperately needs it.” Roughly 1 in 3 consumers were contacted by a creditor or collector trying to collect a debt in the past year, the CFPB said. The largest segment of complaints involve continued attempts to collect a debt that a consumer said was not their debt in the first place, or had already been repaid or discharged in bankruptcy, Cordray said. The changes would apply to third-party debt collectors, including many debt buyers. New rules for first-party collectors, such as credit card companies and payday lenders, will be addressed “soon” but separately. The National Consumer Law Center praised the proposed curbs, saying that they would “significantly strengthen” consumer protections. Still, the group said the changes did not go far enough. The group also said it was disappointed that the proposal did nothing to raise penalties for abusive practices.
