The report provides compliance takeaways for the accounts receivable management industry to consider.
6/30/2021 11:30
In its latest Supervisory Highlights report, the Consumer Financial Protection Bureau shares findings from its supervisory work “highlighting legal violations identified by the Bureau’s examinations in 2020,” according to its press release.
The report includes findings that led to public enforcement actions resulting in more than $124 million in consumer remediation and civil money penalties. It covers auto servicing, mortgages, student loan servicing and debt collection, among other issues. In addition, the report recaps 2020 remedial actions against specific companies and recounts supervisory program developments.
Important takeaways from the Supervisory Highlights report can be drawn from the debt collection issues that were noted:
Make Sure Consumer Data Comes From Reliable Furnishers
CFPB examiners found that “consumer reporting companies are accepting information from companies that furnish consumer data, even though there were ample signs that these furnishers were unreliable,” according to the CFPB’s press release. These actions violate the Fair Credit Reporting Act.
Provide Accurate Information to Consumers About Public Service Loan Forgiveness
CFPB examiners found problems in how student loan servicers informed consumers about the Public Service Loan Forgiveness (PSLF) program. For example, examiners found servicers led consumers to believe they could not access PSLF if they had older loans under the Federal Family Education Loan Program (FFELP), even though they could access PSLF by consolidating FFELP loans into Direct Loans.
Don’t Place Prohibited Calls to Consumers’ Workplaces
Examiners determined that some debt collectors communicated with consumers at their workplaces after they knew or should have known that the consumers’ employers prohibit such communications, in violation of Fair Debt Collection Practices Act Section 805(a)(3).
Examiners also found that debt collectors communicated with consumers at their places of employment during work hours when the debt collectors knew or should have known that calls during work hours were inconvenient to the consumers.
In addition, Section 804(1) of the FDCPA states that, when communicating with third parties for the purpose of acquiring location information for the consumer, a debt collector may only disclose the name of their employer if expressly requested. Examiners observed that some debt collectors identified their employers when communicating with third parties who had not expressly requested it.
Cease Communication Upon Written Request or Refusal to Pay
Examiners reported that one consumer used a model form to mail a written statement to a debt collector stating that the debt was the result of identity theft, requesting that the collector cease further communication, and requesting that the collector provide confirmation along with information concerning the disputed account. After receiving this form, the collector continued attempts to collect the debt from the consumer, which was in violation of FDCPA Section 805(c).
Be Mindful of Language Regarding Consumers’ Inability to Pay
Examiners found when consumers said they were unable to make payment arrangements, some debt collectors emphasized two or more times to each of the consumers that the collector would place a note in the account system stating that the consumer was refusing to make a payment. Examiners determined that the natural consequence of these statements was to harass or oppress the consumers, in violation of FDCPA Section 806.
Communicate Accurate Credit Information
Examiners found that debt collectors knew or should have known that debts were disputed, resulted from identity theft, and were not owed by the relevant consumers. Nonetheless, in these circumstances, the collectors threatened to report to consumer reporting companies (CRCs) that the consumer owed the debt if it was not paid. The collectors then reported the debt to CRCs and failed to report that the consumer disputed the debt.
Examiners found that several debt collectors falsely represented to consumers the impact that paying off their debts would have on their credit profiles, in violation of Section 807(10). For example, one debt collector told a consumer the debt would no longer “impact” her credit profile once paid, which was false.
Send Complete Validation Notices
Examiners found that debt collectors violated Section 809(a) by sending validation notices that lacked some of the required information. This error occurred due to template changes that had not been reviewed by the company’s compliance personnel. In response to these findings, the collectors are improving their board and management oversight of new letter templates.
Read the complete report from the bureau here.