When Should You File A Complaint
First, search the CFPBs database of answers to frequently asked financial questions at AskCFPB. This tool may help you determine whether your complaint is a potential CFPB complaint about an unfair company practice or issue, or if it may require you to take a different action.
For example, if you search disputing a charge on your credit card bill, youll discover that you should first send a written billing error notice to your credit card company. But if youve already disputed the charge and feel that the company isnt following CFPBs guidelines on pending disputes , you might consider filing a complaint with the CFPB.
If youve already tried to remedy the issue or are confused about what to do next, you might consider filing a CFPB complaint.
Name The Company And Add Your Personal Information
Youll add the name of the company youre complaining about. Next, youll note who was involved in the complaintyou, someone else, or you and someone elseand submit contact information like phone numbers and email addresses. You can also specify certain affiliations, such as if youre a servicemember or small business owner.
The Cfpbs Debt Collection Rule
In Dec. 2020, the Consumer Financial Protection Bureau disappointed advocates with the second of its two-part final debt collection rule, impacting 68 million American consumers. The rules made some improvements for consumers but they do not go far enough to provide needed consumer protections on key issues.
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What Is The Debt Collection Rule
A new concept in the Rule is Limited Content Messages, defined in Section 1006.2. The Debt Collection Rule intends for debt collectors to be able to leave non-substantive messages without disclosing the debt to third parties. Limited-content messages must be left by voicemail and only contain the business name of the debt collector. The business name cannot indicate that they are a debt collector, this may be an issue moving forward for debt collectors whose names indicate they are in the collection business.
Section 1006.14 of the Rule contains concrete limitations on the number of telephone calls a debt collector may place. There are a few exceptions but generally a debt collector cannot place more than seven calls within seven days to a person or place a call within seven days after having a conversation regarding a debt via telephone.
Cfpb Confirms Effective Date For Debt Collection Final Rules
WASHINGTON, D.C. The Consumer Financial Protection Bureau today announced that two final rules issued under the Fair Debt Collection Practices Act will take effect as planned, on November 30, 2021. The CFPB issued a proposal in April 2021 that, if finalized, would have extended the effective dates to January 29, 2022. The CFPB has now determined that such an extension is unnecessary. Following this announcement, the CFPB will publish a formal notice in the Federal Register withdrawing the April 2021 proposal.
The CFPB proposed extending the final rules effective date by 60 days to allow stakeholders affected by the COVID-19 pandemic additional time to review and implement the rules. The public comments generally did not support an extension. Most industry commenters stated that they would be prepared to comply with the final rules by November 30, 2021. Although consumer advocate commenters generally supported extending the effective date, they did not focus on whether additional time is needed to implement the rules. The alternative basis for an extension that many commenters urged, a reconsideration of the rules, was beyond the scope of the NPRM and could raise concerns under the Administrative Procedure Act. Nothing in this decision precludes the CFPB from reconsidering the debt collection rules at a later date.
Cfpb Warns Debt Collectors About Fees
The Consumer Financial Protection Bureau on Wednesday issued an advisory opinion warning debt collectors that most pay-to-pay fees that they often charge violate federal law.
These charges, commonly described by debt collectors as convenience fees, are imposed on consumers who want to make a payment in a particular way, such as online or by phone.
Federal law generally forbids debt collectors from imposing extra fees not authorized by the original loan, said CFPB Director Rohit Chopra. Todays advisory opinion shows that these fees are often illegal, and provides a roadmap on the fees that a debt collector can lawfully collect.
The CFPB makes a distinction between debt collectors that allow consumers to make payments by phone or online without charging additional fees, and some debt collectors that impose additional fees for those types of payments. The CFPB confirmed that these types of fees are often illegal and the opinion seeks to stop this practice.
The advisory opinion interprets the language in Section 808 of the Fair Debt Collection Practices Act , which prohibits debt collectors from collecting any amount that is not expressly authorized by the underlying agreement or permitted by law. The opinion covers three debt collection practices:
1. Scope of illegal fees: The CFPB considers that the collection of any fee is prohibited unless the fee is in the consumers contract or permitted by law
Reg F: Finally Bright Line Rules Come To Debt Collection
The Consumer Financial Protection Bureau headquarters in Washington, D.C., U.S. REUTERS/Andrew Kelly
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It’s a timely set of rules given inflation and rising interest rates which are creating the potential for a severe economic downturn and a significant rise in consumer delinquencies across all markets, especially subprime sectors.
As Regulation F is one of the most comprehensive changes in debt collection regulation, below is a summary of the rules that must be followed and their significance.
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Background and entities covered
The Consumer Financial Protection Bureau implemented Regulation F on Oct. 30, 2020, and Dec. 18, 2020, interpreting the Fair Debt Collection Practices Act . The FDCPA is designed to protect consumers from abuse and harassment during debt collection and make sure they receive transparent, accurate information relating to their debts. Dodd-Frank amended the FDCPA, giving authority to the CFPB to create rules with respect to debt collection.
Effective as of Nov. 30, 2021, the CFPB’s new rules set out a clear framework that debt collectors must work within.
Consumer communications covered
Regulation F places certain limits upon debt collectors in their contacts with consumers in an effort to be sure the consumer is not abused or harassed in this process.
A consumer reporting agency, if otherwise permitted by law.
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Understand How The Cfpbs Debt Collection Rule Impacts You
If you have a debt in collection, its often a challenging time. You may be having a difficult time financially and that can be frightening. And if a debt collector contacts you about your debts, you may have concerns about whether the debt collector is legitimate, whether the debt is yours, or if the amount the collector is seeking to collect is accurate.
The Fair Debt Collection Practices Act makes it illegal for debt collectors to harass or threaten you when trying to collect on a debt. In addition, on November 30, 2021, the CFPBs new Debt Collection Rule became effective. This rule clarifies how debt collectors can communicate with you, including what information theyre required to provide at the outset of collection about the debt, your rights in debt collection, and how you can exercise those rights.
Here are five key things to know about the new debt collection rule.
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Debt Collection And Cfpb Enforcement Trends To Watch
Debt collection practices can expect closer federal and state scrutiny due to recent developments, Manatt attorneys Brett Natarelli and Madelaine Newcomb say. The impact of a recent Eleventh Circuit decision, new leadership at the Consumer Financial Protection Bureau, and increased scrutiny of pandemic-related debts are some trends they examine.
Federal and state regulators have long focused on debt collection practices, but recent news and trends including new Consumer Financial Protection Bureau leadership, increased state regulatory powers, and Covid-19 pandemic enforcement developmentswill make it harder for third-party debt collectors.
A supervisory and enforcement spotlight also will shine on companies collecting on their own consumer debts.
Below we share our top takeaways from recent developments and what to expect in the coming months.
Servicers Have All The Information They Need To Identify Military Borrowers
Servicers have a simple solution for reaching servicemembers: they are already required to check which borrowers are in the military and are covered by the Servicemembers Civil Relief Act . Servicers can review the information they already have to find military borrowers with Federal Family Education Loans or Federal Perkins Loans who would stand to benefit by consolidating into Direct Consolidation Loans to qualify for PSLF. Then, servicers can provide information to these military borrowers to ensure that they are informed about the PSLF Waiver and its benefits, and follow through to provide any assistance military borrowers need to benefit under the program.
, it is clear that servicers can use the information they already have on their books to contact military borrowers about PSLF.
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What To Know About Debt Collection
What types of debts are covered under the law?
Your credit card debt, auto loans, medical bills, student loans, mortgage, and other household debts are covered under the FDCPA. Business debts are not.
Can debt collectors contact me at any time or place?
No. Debt collectors cant contact you before 8 a.m. or after 9 p.m., unless you agree to it. They also cant contact you at work if you tell them youre not allowed to get calls there.
How can a debt collector contact me?
Debt collectors can call you, or send letters, emails, or text messages to collect a debt.
How can I stop a debt collector from contacting me?
Mail a letter to the collection company and ask it to stop contacting you. Keep a copy for yourself. Consider sending the letter by certified mail and paying for a return receipt. That way, youll have a record the collector got it. Once the collection company gets your letter, it can only contact you to confirm it will stop contacting you in the future or to tell you it plans to take a specific action, like filing a lawsuit. If youre represented by an attorney, tell the collector. The collector must communicate with your attorney, not you, unless the attorney fails to respond to the collectors communications within a reasonable time.
Can a debt collector contact anyone else about my debt?
What does the debt collector have to tell me about the debt?
What if I dont think I owe the debt?
What are debt collectors not allowed to do?
Retirement And Insurance Investments
The CFPB is weighing whether it should take on a role in helping Americans manage retirement savings and regulate savings plans, particularly focusing on investment scams that target the retired and elderly. “That’s one of the things we’ve been exploring and are interested in terms of whether and what authority we have”, bureau director Richard Cordray said in a January 2013 interview. Some conservatives have been critical of this potential role, with William Tucker of the American Media Institute asserting that the agency intends to “control” retirement savings and force people to buy federal debt. The AARP has encouraged the agency to take an active role, arguing that the bureau will help protect elderly Americans from affinity fraud that often targets senior citizens, ensuring that their investments are less likely to be stolen through securities fraud or malpractice.
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Fair Lending 101 For Debt Collectors
Please join Consumer Financial Services Partner Chris Willis and his guests and colleagues Stefanie Jackman and Sarah Reise as they discuss the intersection of fair lending with collections. They cover which types of third-party debt collection processes could be subject to a fair lending review, the difference between disparate treatment and disparate impact, how the CFPB may review collection-related decisions, what a basic fair lending analysis may look like for collectors, the processes likely to be targeted for a fair lending review, and what collectors can do now to update their compliance management system and assess their operations to identify and mitigate potential fair lending issues.
Consumer Financial Services Partner Stefanie Jackman focuses a significant portion of her practice on providing compliance-related advice to her clients. She regularly counsels clients on conducting compliance assessments relating to their debt collection, credit reporting and dispute resolution processes, fair lending and underwriting, and vendor oversight, as well as the functionality of their overall compliance management system.
Links To Additional Resources:
- Consumer Financial Protection Bureau Debt Collections information and guidance, as well as information on consumer protections.
- Federal Trade Commission Information about your rights, and a helpful debt collection FAQ.
- Federal Deposit Insurance Corporation Tips and assistance for dealing with debt collectors.
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New Requirements For California Debt Collectors
The California Debt Collection Licensing Act takes effect on Jan. 1, 2022, imposing new licensing requirements on both first-party and third-party consumer debt collectors in California.
Subject to certain exemptions, the CDCLA requires licensure of all debt collectors that engage in the business of collecting debts in California, even if the debt collector is not physically present in California. While the CDCLA contains many licensing exemptions, it grants the California Department of Financial Protection and Innovation broad authority to take action under the Rosenthal Fair Debt Collection Practices Act and California Fair Debt Buying Act, including against entities exempt from licensure.
Debt collectors that engage in collection activity with California residents should closely review the CDCLA and the recently proposed regulations issued by the DFPI to determine whether they will need to obtain a license in advance of the Jan. 1, 2022, effective date.
And, as always, both third-party and first-party debt collectors should continue to be mindful of the California Rosenthal Acts far more expansive reach and scope .
What Situations Are Covered By Cfpb Complaints
A variety of financial products and services could be the subject of a complaint, including:
- Debt collection
- Money transfer, virtual currency, or money services
- Payday loans, title loans, or personal loans
- Student loans
Many of these product groups include subgroups. For example, debt collection is further divided based on the type of debt, such as auto debt, credit card debt, private student loan debt, or payday loan debt.
What A Debt Collector Can’t Do
A debt collector can’t do the following:
- suggest to your friends, employer, relatives or neighbours that they should pay your debts, unless one of these individuals has co-signed your loan
- use threatening, intimidating or abusive language
- apply excessive or unreasonable pressure on you to repay the debt
- misrepresent the situation or give false or misleading information
A debt collection agency can’t add any collection-related costs to the amount you owe other than:
- legal fees
- fees for non-sufficient funds on payments that you submitted
Medical Debt A Major Source Of Consumer Complaints New Watchdog Report Shows
Pile of envelopes with overdue utility bills isolated on white
Medical debt weighs on millions of Americansas many as half by some estimates. But medical debt isnt just a common problem its a thorny one.
According to a new report released earlier this month from the Consumer Financial Protection Bureau , medical debt was a key source of consumer-reported complaints about debt.
In 2021, the CFPB sent more than 750,000 consumer-reported complaints to approximately 3,400 companies for review and response. Complaints focused on issues such as debt collection and credit or consumer reporting.
In the context of medical debt collection, the biggest source of complaints included written notices and disputed debts.
Nearly one-third of complaints about medical debt collection were about the related written notices. No other type of debt has as large a percentage of complaints specifically about written notices.
Other complaints about written notices related to the opposite problem: too much information was included. Collection notices detailing medical procedures, tests, and prescriptions made some consumers feel that their protected health information had not been protected, according to the report.
These complaints arose in spite of guidance the CFPB issued in 2020 about the information that debt collectors are required to include in consumer notices.
As one complaint quoted in the report read:
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Dispute Over Acting Director
On November 24, 2017, Director Cordray appointed Leandra English to the position of deputy director, and announced that he would leave office at the close of business that day. Cordray indicated that would make English the acting director after his resignation, citing provisions of the DoddFrank Wall Street Reform and Consumer Protection Act providing that the deputy director of the CFPB becomes acting director in the “absence or unavailability” of the director. Later the same day, however, President Donald Trump appointed the incumbent director of the Office of Management and Budget, Mick Mulvaney, as acting director, citing the authority of the Federal Vacancies Reform Act of 1998.
On November 25, the Office of Legal Counsel released an opinion, written by Assistant Attorney General Steven Engel, asserting that the President has the authority under the FVRA to designate an acting CFPB Director. The OLC memo maintained that “both the Vacancies Reform Act and are available for filling on an acting basis a vacancy that results from the resignation of the CFPB’s Director” but that “when the President designates an individual…outside the ordinary order of succession, the President’s designation necessarily controls.” This position was also supported by the General Counsel of the CFPB, Mary E. McLeod.