Last week, the Consumer Financial Protection Bureau (CFPB) presented its annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA) in 2012. It is the second FDCPA report the Bureau has submitted after taking over primary enforcement duties from the FTC.
Congress passed the FDCPA in 1977 to eliminate abusive collection practices by debt collectors and to ensure that those debt collectors who refrain from using abusive practices are not competitively disadvantaged. The FDCPA applies only to third-party collectors; in general these are collection agencies, debt purchasers, and attorneys regularly engaging in debt collection.
According to the report, the FTC continues to receive more complaints about the debt collection industry than any other specific industry. Complaints about third-party debt collectors and in-house collectors in 2012 together totaled 125,136 complaints and accounted for 24.1% of all complaints the FTC received.
The continuous problem of complaints relating to the debt collection industry paved the way for the most significant development in 2012 which was the finalizing of the supervision rule for large debt collection market participants.
The final rule establishes the first federal supervision program for the debt collection industry, bringing debt collectors with more than $10 million in annual receipts resulting from consumer debt collection within the scope of the CFPB’s supervisory authority.
The full report, “Fair Debt Collection Practices Act-CFPB Annual Report 2013” is over 50 pages long and details the efforts taken in the past year by the CFPB and the FTC to enforce the FDCPA. I’ll be reviewing individual sections in coming posts.
Do Good and Make Money!