CFPB Releases Annual FDCPA Report

The Consumer Financial Protection Bureau is calling on policymakers to examine whether the Fair Debt Collection Practices Act should be broadened to protect not just consumers but small businesses, according to its annual report on the FDCPA that it submitted to Congress last week. Small businesses can be just as vulnerable as consumers while “facing similar practices by bad actors” without having “the same set of rights,” noted CFPB Director Rohit Chopra in a message announcing the submission of the report.

The report summarizes everything FDCPA-related undertaken by the CFPB during 2021, including enforcement actions, a summary of consumer complaints, education and outreach initiatives, and highlights from examinations it conducted.

Based on the average size of a small business (54% have fewer than five employees), the “level of resources and expertise for most small businesses” is “on par with consumer borrowers rather than what may be the general perception of commercial enterprises with readily available financial resources and expertise,” the CFPB notes in a section about small business debt collection. “The result is the potential for exploitation comparative to what is encountered by consumers, without any of the protections granted to consumers by the FDCPA.”

If you’re looking for a connection between actions taken by the CFPB and the reasons why it did them, look no further than the consumer complaints submitted to the Bureau. Most consumers who complained about the written notifications they received regarding debts said they did not receive enough information to verify the debt. To remedy that, I give you the Model Validation Notice. Another complaint noted in the report is first learning about a debt after viewing a credit report. Does that sound like anything the CFPB has been focusing on recently? In case you were wondering, taking or threatening to take a negative or legal action was the next-most complained about issue from consumers in 2021.

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