There is word out there that many debt examination processes have continued for months or years and that some are yet to be concluded. Could the debt collection industry be lost? The Consumer Financial Protection Bureau (CFPB) has come out to defend the agencies claiming that they are still learning, which is a reasonable argument. But the big question on the minds of consumers is where exactly the industry will end up. This article examines a few possibilities;
- Collection Litigation
Recently, the CFPB sued Georgia-based Fredrick J. Hanna & Associates for allegedly running an illegal collection lawsuit mill. CFPB alleged that the collection law firm was intimidating consumers with deceptive court filings. It also alleged that the firm in collaboration with three other associates lied to consumers that their suits were from attorneys. The Hanna & Associates firm has put a strong defense claiming that CFPB has no authority to govern a lawyer’s conduct.
Nevertheless, based on the suit against Hanna & Associates, it appears that CFPB’s examination could be focusing on collection suits, dismissal rates, documentation, and counterclaims.
- Time-barred debt
There is little secret that the CFPB has also been focusing on time-barred debts for quite a while. Not long ago, the CFPB joined forces with the Federal Trade Commission in filing an amicus brief, and soon after, we saw the Sixth Circuit in a suit involving debt collection that breached the statute of limitations. Not long afterwards, we then saw the word “settlement” used in the case Buchanan v. Northland Group Inc.
In short, the CFPB also seems to be concerned about the quality and completeness of information given to consumers which (as CFPB claims) would lead consumers to question whether they were sued on a time-barred account.
- Vendor Oversight
Finally, CFPB also appears to be looking at the responsibility of the vendor and whether the body should hold the debt collector or the vendor liable for sins committed by the vendor. Apparently, the CFPB wants debt collectors to be responsible for vendor oversight although the vendors themselves have been asked to act responsibly. Those who fail to act appropriately would be held liable for their contributions to the misconduct. For collectors, a great way to get off the mark is to open a collection agency merchant account.
If, like most consumers, you’ve been trying to unravel the mystery behind the delays in debt examination processes, these three suggestions should be a good point to start.