Debt Collection Practices Still a Concern as Congress Moves to Exempt Some from FDCPA

Mar 22, 2018 | News

The Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) released their annual report on the Fair Debt Collection Practices Act (FDCPA) this week. Since 2012, the CFPB and FTC have worked under a memorandum of understanding to coordinate enforcement, share information, and provide consumer education regarding debt collection issues.

 

In 2017, the CFPB received more than 84,500 complaints related to the collection of debts for consumer financial products. This led to a number of enforcement actions, of which 5 are still pending. The FTC initiated cases against 42 defendants in that same time, secured $64 million in judgments, and banned 13 companies from engaging in debt collection.

 

As consumer credit usage rises, so to have concerns over aggresive and abusive debt collection practices. A review of debt collection actions earlier this year found that there were 815 debt collection complaints in January, leading to 194 class action lawsuits.

 

The House Financial Services Committee recently progressed a bill that would exempt law firms from the definition of “debt collector” in the FDCPA. Specifically, law firms would need to be engaged in debt collection litigation to receive the exemption.

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