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Communications Tactics: One of the Most Common Issues Consumers Have About Debt Collection

Debt collection - it’s the most commonly complained about category in the CFPB Consumer Complaint Database and is the focus of the Consumer Financial Protection Bureau’s December 2016 monthly complaint report. With almost 300,000 debt collection complaints handled by the CFPB, this category represents over a quarter of total complaints that the CFPB has handled since its inception.

In the report, the CFPB noted that “communications tactics” were the second most common issue consumers had about debt collection; the most common issue was continued attempts to collect debt not owed. As the CFPB previously stated in their 2016 Annual Report on the Fair Debt Collection Practices Act, these communications tactics often involved:

  • Frequent or repeated calls
  • Threats to take legal action
  • Obscene, profane, or abusive language
  • Continuing to call after being sent written cease communication notices

First-party debt collectors (creditors collecting on their own debts) and their third-party partners need to ensure that they are monitoring their call centers for non-compliant tactics. The CFPB has carried out 28 enforcement actions against companies for non-compliant debt collection tactics since 2012. 

The CFPB is also in the process of creating new regulations for the industry. The federal agency published an in-depth study on third-party debt collection operations in 2016 that it will use to inform upcoming regulatory proposals—specifically, the cost of compliance for different types of collectors. 

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Companies offering student loans also should revisit their lending practices for compliance with CFPB guidelines. According to the CFPB’s December Monthly Complaint Report, the number of student loan complaints has skyrocketed since 2015. From 2015 to 2016, student loan complaint volume has increased by 120%.

The CFPB released a report last week about the challenges older borrowers face in paying back their student loans and has called for “market-wide reforms to halt harmful practices and boost assistance for distressed borrowers.”

 

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Tags: Regulatory Compliance

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