Advocacy Report Calls on CFPB to Make Changes to Debt Collection Rule

The Consumer Financial Protection Bureau should “halt” the implementation of its debt collection rule and “fix” it by reducing the number of call attempts, requiring consumers to opt in to receive electronic communications, and prohibit the collection of time-barred debt, as a means of improving consumer protection and stemming the influx of consumer complaints, which rose by 50% last year, according to a report released today by an advocacy group.

The report — Consumers in Peril — was released by the U.S. PIRG Education Fund in conjunction with the start of National Consumer Protection Week.

Credit reporting agencies, payday lenders, and debt collectors are the three groups of companies profiled in the report, which noted that the number of complaints filed in each month last year were the highest totals ever recorded for that month since the CFPB began accepting complaints nine years ago.

The three major credit reporting agencies were the most oft-complained about companies in 2020, according to the report, and credit reporting accounted for more than 50% of all complaints filed with the CFPB last year.

Along with payday lenders, the CFPB under President Trump “unleashed” debt collectors on consumers, according to the report. The report calls for the CFPB to review the provisions of the rule and adjust the number of call attempts per week to three, from seven call attempts per debt. As well, not requiring consumers to opt in to receiving electronic communications like email and text messages makes it more likely that a collector will send a message to an old account or have the message marked as “spam,” according to the report. The rule also “allows debt collectors to pressure consumers into paying their legally dead debt instead of outright prohibiting it,” according to the report.

“The surge in complaints is a signal of the strain the pandemic put on consumers, and of the minefield of tricks and traps they face in the financial marketplace,” said Gideon Weissman, Frontier Group analyst and report co-author, in a statement. “Americans who share their stories are telling us exactly what kinds of help they need, and the CFPB would do well to start listening and responding.”

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