WASHINGTON (3/21/14)--Some debt collectors are using aggressive communications tactics and even threats of illegal actions to "hound" consumers--even over debts the targets say they do not owe, according to a Consumer Financial Protection Bureau annual report to Congress.
The report is built from more than 30,000 consumer complaints the bureau has received about the debt collection market since July 2013.
"Consumers should never be hounded about debts they do not owe," said CFPB Director Richard Cordray. "We will not tolerate companies harassing consumers or threatening illegal actions in the debt collection market. We will continue to work hard to ensure that consumers are treated with dignity and fairness."
It is estimated that about 4,500 debt collection firms comprise the multi-billion dollar industry. Original creditors--like financial institutions--may collect their own debts or hire third-party debt collectors. Original creditors and other debt owners also may sell their debts to debt buyers. Debt buyers may sell the debt, collect the debt themselves, or hire third-party debt collectors to do so.
The bureau's larger-participant rule for debt collection became effective on Jan. 2, 2013. Under this rule, the CFPB has supervisory authority over any firm with more than $10 million in annual receipts from consumer debt collection activities, which extends to about 175 debt collection companies.
Use the resource link to access the CFPB report.