CFPB Releases Proposal to Overhaul Debt Collection Market

Last Thursday, July 28th, the Consumer Financial Protection Bureau (CFPB) released an outline proposal that aims to “increase protections pertaining to third-party debt collectors and others covered by the Fair Debt Collection Practices Act, including many debt buyers.” The CFPB has stated that it plans to address consumer protection issues involving first-party debt collectors and creditors on a separate track as part of its overhaul of the debt collection marketplace. Specifically, the new protections within the proposal are aimed at ensuring that debt collectors: collect the correct debt; limit excessive communications; make debt details clear and disputes easy; document debt on demand for disputes; stop collecting or suing without proper documentation; and stop burying the dispute.

As part of their review process, the CFPB has also released a report entitled “Study of Third-Party Debt Collection Operations.”

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