Frustrated with the abusive practices of the ballooning debt collection industry, the Consumer Financial Protection Bureau intended to protect Americans with debt from being scammed by these creditors.
The debt collection industry is largely regulated by the Fair Debt Collection Practices Act. While this piece of legislation certainly had an impact, it was passed nearly 40 years ago, and contained no regulations regarding email, text, and voicemail. Additionally, debt collectors have been caught “robo-signing” court documents—this means debt collectors often have computers sign affidavits claiming that a debt is legitimate without anyone actually checking and making sure that it is true.
Under the new regulations, debt collectors will have to provide evidence that a debt is real before collecting on it. This sounds trivial, but often, debt collectors will sue a debtor for an amount the debtor doesn’t owe; sometimes the debt is barred by the statute of limitations, sometimes there’s a calculation error, sometimes the debt doesn’t exist at all. But if the debtor doesn’t show up to court, the court may automatically rule in favor of the debt collector, even if they haven’t proven that the consumer owes them the money.
There are also new restrictions on how a debt collector can communicate with a debtor. They can’t harass them with emails, voicemail, etc., nonstop. They are limited regarding how often they can contact a debtor every week. Debt collectors will also need to provide notices about the debtor’s rights in debt collection actions in terms that the consumer can understand, not just complicated legalese.
It is important to know that you can demand a written verification of debt that a debt collector says you owe them within 30 days of them contacting you. Debt collectors can’t harass you or bully you to get them to pay your debt; they are limited in the number of attempts to contact you that they can make in order to collect your debt. If you tell a debt collector to cease communication with you, it must, although they are still allowed to sue you for the debt. If you think your rights are being violated, contact M&J for a free consultation.
Written content provided by law clerk, Mackenzie Pentoja