Starting in January, debt collection agencies will be under the direction of the CFPB. Many have been waiting for the Consumer Financial Protection Bureau to bring that market in, but time will tell if it makes a difference.
Consumer Financial Protection Bureau tells debt collection agencies a new sheriff is in town
There is a lot of hatred in the debt collectors business, which they most likely deserve considering some of the things collectors do. Though there are good debt collectors out there, there are a lot of bad apples that give the market a bad name.
From 2000 to 2011, there was a massive increase in the number of complaints the Federal Trade Commission got from 13,950 to over 180,000 complaints, according to the New York Times. Of those complaints, 21 percent came from the top 100 debt collectors in the country, according to Forbes. That means smaller firms are doing much of the nasty business.
A lot of people have waited for the CFPB to notice and deal with the issue, and the agency just announced its plans to do just that.
New year; new guidelines
Starting January 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau direction. The agency asserts that it wants debt collection agencies will have to clearly identify themselves and disclose the amount of debt owed, as well as communicates "civilly and honestly" with people they are attempting to collect a debt from. Granted, people should pay their personal loans and other obligations, but that doesn't mean they should be subjected to abuse.
The CFPB is authorized under the Dodd-Frank Act, which produced the agency and its mandate, to regulate "non-bank financial institutions" which deal with customers.
The only problem with it all is that smaller businesses are off the hook since only corporations with $10 million or more in annual receipts are being viewed, according to the Washington Post. The New York Times points out that it is still going to be $12.2 billion a year watched and about 63 percent of business, which is great. However, only 175 of the 4,500 debt collectors are represented in that number.
Not as toxic as it seems
Debt collection companies are not that bad, especially when you consider about every 5 in 1 million people complains, according to Forbes.
The Consumer Financial Protection Bureau is working on further rules to regulate the market, but as Forbes points out, regulating the top players is not as pressing as it might seem. By virtue of being the largest firms, they work with the largest creditors, which mean much tighter scrutiny over practices.
Consumer Financial Protection Bureau tells debt collection agencies a new sheriff is in town
There is a lot of hatred in the debt collectors business, which they most likely deserve considering some of the things collectors do. Though there are good debt collectors out there, there are a lot of bad apples that give the market a bad name.
From 2000 to 2011, there was a massive increase in the number of complaints the Federal Trade Commission got from 13,950 to over 180,000 complaints, according to the New York Times. Of those complaints, 21 percent came from the top 100 debt collectors in the country, according to Forbes. That means smaller firms are doing much of the nasty business.
A lot of people have waited for the CFPB to notice and deal with the issue, and the agency just announced its plans to do just that.
New year; new guidelines
Starting January 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau direction. The agency asserts that it wants debt collection agencies will have to clearly identify themselves and disclose the amount of debt owed, as well as communicates "civilly and honestly" with people they are attempting to collect a debt from. Granted, people should pay their personal loans and other obligations, but that doesn't mean they should be subjected to abuse.
The CFPB is authorized under the Dodd-Frank Act, which produced the agency and its mandate, to regulate "non-bank financial institutions" which deal with customers.
The only problem with it all is that smaller businesses are off the hook since only corporations with $10 million or more in annual receipts are being viewed, according to the Washington Post. The New York Times points out that it is still going to be $12.2 billion a year watched and about 63 percent of business, which is great. However, only 175 of the 4,500 debt collectors are represented in that number.
Not as toxic as it seems
Debt collection companies are not that bad, especially when you consider about every 5 in 1 million people complains, according to Forbes.
The Consumer Financial Protection Bureau is working on further rules to regulate the market, but as Forbes points out, regulating the top players is not as pressing as it might seem. By virtue of being the largest firms, they work with the largest creditors, which mean much tighter scrutiny over practices.
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