CFPB Highlights FDCPA in Report to Congress

CFPB logoCommercial collections, consumer complaint trends and coordinating with partner agencies discussed in FDCPA report.

04/19/2022 11:15 A.M.

3.5 minute read

The Consumer Financial Protection Bureau has released its annual report on the Fair Debt Collection Practices Act to Congress highlighting the role of the debt collection industry in the economy, supervision and complaint trends, among other topics.

“As the debt collection industry’s primary regulator, the CFPB recognizes the important role that responsible debt collection plays in the consumer finance ecosystem,” the report states. “The CFPB, in coordination with its partner agencies, is committed to protecting both consumers and honest businesses from those that violate the law.”

Of note in the report, the CFPB is exploring language in the FDCPA pertaining to collection issues for small businesses as well as servicing practices.

Here are the report highlights you need to know:

Consumer Complaints

  • The CFPB received about 121,700 debt collection complaints in 2021 and sent approximately 73,600 (60%) to companies for their review and response.
  • As has been the case over the past several years, companies responded to approximately 97% of debt collection complaints they received.
  • Since the CFPB started accepting debt collection complaints in 2013, attempts to collect a debt that a consumer claims is not owed is a top issue.
  • Consumers with debt resulting from identity theft said they learned about the debt after reviewing their credit report, which was also the case with medical debt—although the consumers with medical debt on their credit report said the limited information provided made it difficult to understand the debt’s origin.

ACA International continues to advocate with the CFPB to ensure accurate data about the industry is documented in the complaint database used for these reports by providing context to the complaints and sound verification processes as well as accurate reporting that reflects the difference between consumer inquiries and actual allegations of harm.

Small Business Debt Collection

“Although the FDCPA generally does not cover the collection of small business debt, the CFPB is concerned about abuses pertaining to collections and servicing practices associated with financing for small business. It is in the public interest, especially in light of the increased vulnerabilities of small business owners during the pandemic, that they receive adequate protections,” the report states.

The CFPB stated that there are complaints regarding abusive practices toward small businesses. They will monitor the associated legal action of the Federal Trade Commission and state agencies.

“It is critical that policymakers pay close attention to wrongdoers targeting small businesses and determine whether there should be additional debt collections rights and protections for small businesses and entrepreneurs to protect them,” CFPB Director Rohit Chopra said in a news release on the report.

Overall, the CFPB notes that policymakers and Congress should explore collections issues for small businesses as part of their focus on the debt collection market, according to the report.

CFPB examinations from Jan. 1, 2020, to June 30, 2021, are highlighted in the report as well as enforcement actions, which you can find on pages 18-23 and 26-29.

“Throughout 2021, the CFPB took action to eliminate illegal debt collection practices, ensure that ethical debt collectors were not competitively disadvantaged, and protect consumers against debt collection abuses,” the report states.

What’s Next at the Bureau?

Chopra, who will present the bureau’s semiannual report to Congress before the House Financial Services Committee April 27, said, “In the coming year, the CFPB will continue its work to uphold the Fair Debt Collection Practices Act through all the tools at its disposal. These include supervision and enforcement actions, regulatory and legal action, research and market monitoring activities, and consumer education.”

Chopra quotes the FDCPA in his remarks, stating, “It isn’t just consumers who are harmed by illegal debt collection practices. Congress also intended for the FDCPA to protect law-abiding debt collection businesses, so ‘debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged.’”

Read the CFPB’s full report here.

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