The Consumer Financial Protection Bureau has released its annual report about the Fair Debt Collection Practices Act. The report summarizes all of the enforcement and regulatory actions involving the FDCPA that the CFPB undertook in 2016.
The CFPB took 10 enforcement actions in 2016, down from 15 in 2015. The Federal Trade Commission, meanwhile, participated in 12 enforcement actions in 2016, down from 18 in 2015. Combined, there was a 33% drop in the number of enforcement actions taken last year, compared with 2015. The CFPB did not provide any context to indicate why there were fewer enforcement actions in 2016 than there were a year earlier.
The public actions taken by the CFPB to enforce the FDCPA last year resulted in $39 million in consumer relief and $20 million paid to the CFPB’s civil money penalty fund. By comparison, the enforcement actions taken in 2015 resulted in $360 million in consumer relief and $79 million paid into the civil money penalty fund. The total dollar amount of fines and penalties was 86% lower last year than the year before.
While the number of enforcement actions was lower than a year earlier, the number of debt collection complaints was higher in 2016 than 2015. As well, the sample letters provided by the CFPB for consumers to use when interacting with debt collectors, letters that address situations such as individuals who need more information about a debt, disputing a debt, or individuals who want to stop receiving communications from collectors, have been downloaded nearly 400,000 times, since they were first published in June 2014. At the end of 2015, the letters had been downloaded 198,000 times.
The CFPB disclosed no new information about the status of its proposed debt collection rule in the report.
Among its rulemaking, research, and policy initiatives, the CFPB disclosed some consumer testing it is currently engaged in.
The Bureau is also conducting consumer testing to assess, among other things, the effectiveness of certain disclosures to be provided by debt collectors, including: (1) information about the debt and its owner; (2) that a communication is from a debt collector and that the information the debt collector receives from consumers will be used to collect the debt; (3) a consumer’s legal rights in responding to debt collectors, including a consumer’s ability to dispute a debt; and (4) information about how a debt’s age affects a collector’s ability to sue the consumer. The FDCPA currently requires that collectors provide some of this information to consumers during or within five days of the initial communication as part of a “validation notice”. Consumer testing provides insight into consumers’ understanding of debt collection disclosures. The Bureau can use this knowledge to assess whether consumers’ understanding would be increased by improving the information the disclosure conveys or the way this information is provided.