Regulation

CFPB: Consumers report being “hounded” by debt collection agencies

cfpbA report issued by the CFPB last week showed that many consumers submitted complaints regarding debt collectors that have “hounded” them about debts they do not actually owe.

“We will not tolerate companies harassing consumers or threatening illegal actions in the debt collection market,” CFPB Director Richard Cordray said. “We will continue to work hard to ensure that consumers are treated with dignity and fairness.”

According to the CFPB, it received more than 30,000 complaints related to debt collection agencies between July and December. The agency said 82 percent of firms listed in the complaints have already responded to them.

Other primary complaints include aggressive communication tactics by debt collectors, with more than 50 percent of consumers reporting frequent or repeated calls. Other reported behaviors listed in the complaints include the use of obscene, abusive or profane language.

Additionally, approximately 14 percent of consumers complained that a debt collection agency is threatening to take illegal action—specifically, arrest or jail—if the consumer does not pay, and some consumers also reported threats by a debt collector to sue or seize property.

The CFPB began taking debt collection complaints in July. In January, the CFPB’s larger participant rule for debt collectors took effect, allowing the agency to oversee any firm with more than $10 million in annual receipts from consumer debt collection activities—approximately 175 debt collection firms.

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