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CFPB Announcement that will Ease the Minds of Consumers

Founded in 1951, the National Foundation for Credit Counseling is the largest serving nonprofit financial counseling organization. Find various topics in this blog, including personal finance, credit counseling, housing, budgeting and student loan help. Click here to speak with an NFCC-certified Consumer Credit Counselor.

FullSizeRenderBy Tara Carter

We’re all familiar with the headache that can come along with the consistent nagging of debt collectors, however the Consumer Financial Protection Bureau (CFPB) has just proposed new regulations that will give us a break from persistent debt collectors.

Here are highlights of the proposed changes:

  1. To protect consumers from being contacted for debts that may be incorrect, debt collectors now have to confirm that they have substantial information on the consumer before they can begin making contact. According to the NFCC Vice President of Communications Bruce McClary, “This is a win for consumers who have been plagued by misdirected collection efforts that are not based on the right information.”
  2. Debt collectors are also now limited to the number of times per week they attempt to contact a consumer. Before, some consumers were left vulnerable to non-stop communication from debt collectors, compared to now where they will be limited to 6 times maximum per week. The CFPB has also increased the power of consumers by giving them the option to choose the form of communication a debt collector can contact them by. For example, if someone wished to not be contacted through e-mail, collectors would not be allowed to contact them through this channel.
  3. To protect consumers against harassment and debt collection scams, collectors are now required to include specific information regarding the debt, which would include the consumer’s federal rights. Consumers also reserve the right to verbally question the validity of a debt at any time.
  4. Don’t sue me! According to the CFPB, “If a consumer disputes – in any way – the validity of the debt, collectors would have to stop collections until the necessary documentation is checked.” McClary also comments on this new regulation by stating, “Adding this rule helps provide a reasonable assurance that the rush to collect or sue will be tempered review of all documentation before action can be taken.”
  5. Lastly, to help with the confusion of disputes getting lost in account transfers, the new collector who receives the account must ensure all disputes and other critical issues are resolved before they can attempt to collect the debt. This makes things easier for the consumer, so they won’t have to worry about re-submitting information if their account is transferred to a new collector.

To learn more about these new regulations proposed by the CFPB, check out the official announcement on their website at http://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-considers-proposal-overhaul-debt-collection-market/.

 

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