Starting in Jan, debt collection agencies will be under the direction of the CFPB. Many have been waiting for the CFPB to bring that industry in, but time will tell if it makes a difference.
CFPB tells debt collection companies a new sheriff is in town
There is a ton of hatred in the debt collectors business, which they most likely deserve considering some of the things collectors do. Though there are good debt collectors out there, there are a lot of bad apples that give the industry a bad name.
The Federal Trade Commission, according to the New York Times, received more than 180,000 grievances about debt collectors in 2011. In 2000, the Federal Trade Commission received 13,950. According to Forbes, the top 100 debt collectors by receipts accounted for 21 percent of complaints to the FTC about debt collection agencies, meaning the majority of the bad activity is concentrated among the smaller firms.
The CFPB has finally announced that it is prepared to bring in the industry's behavior, which many people have been waiting for.
Getting rules in Jan
Starting Jan. 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau supervision. The bureau asserts that it wants debt collection companies will have to clearly identify themselves and disclose the amount of debt owed, as well as communicates "civilly and honestly" with people they try to collect a debt from. Granted, people should pay their personal loans and other obligations, but that does not mean they should be subjected to abuse.
The CFPB is authorized under the Dodd-Frank Act, which created the bureau and its mandate, to regulate "non-bank financial institutions" which deal with customers.
The only problem with it all is that smaller businesses are off the hook since only businesses with $10 million or more in annual receipts are being viewed, according to the Washington Post. The New York Times points out that it is still going to be $12.2 billion a year watched and about 63 percent of business, which is good. However, only 175 of the 4,500 debt collectors are represented in that number.
Not all that negative
Debt collection companies are not that bad, specifically when you consider about every 5 in 1 million people complains, according to Forbes.
The Consumer Financial Protection Agency is working on further rules to regulate the industry, but as Forbes points out, regulating the top players is not as pressing as it might seem. By virtue of being the largest firms, they work with the largest creditors, which mean much tighter scrutiny over practices.
CFPB tells debt collection companies a new sheriff is in town
There is a ton of hatred in the debt collectors business, which they most likely deserve considering some of the things collectors do. Though there are good debt collectors out there, there are a lot of bad apples that give the industry a bad name.
The Federal Trade Commission, according to the New York Times, received more than 180,000 grievances about debt collectors in 2011. In 2000, the Federal Trade Commission received 13,950. According to Forbes, the top 100 debt collectors by receipts accounted for 21 percent of complaints to the FTC about debt collection agencies, meaning the majority of the bad activity is concentrated among the smaller firms.
The CFPB has finally announced that it is prepared to bring in the industry's behavior, which many people have been waiting for.
Getting rules in Jan
Starting Jan. 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau supervision. The bureau asserts that it wants debt collection companies will have to clearly identify themselves and disclose the amount of debt owed, as well as communicates "civilly and honestly" with people they try to collect a debt from. Granted, people should pay their personal loans and other obligations, but that does not mean they should be subjected to abuse.
The CFPB is authorized under the Dodd-Frank Act, which created the bureau and its mandate, to regulate "non-bank financial institutions" which deal with customers.
The only problem with it all is that smaller businesses are off the hook since only businesses with $10 million or more in annual receipts are being viewed, according to the Washington Post. The New York Times points out that it is still going to be $12.2 billion a year watched and about 63 percent of business, which is good. However, only 175 of the 4,500 debt collectors are represented in that number.
Not all that negative
Debt collection companies are not that bad, specifically when you consider about every 5 in 1 million people complains, according to Forbes.
The Consumer Financial Protection Agency is working on further rules to regulate the industry, but as Forbes points out, regulating the top players is not as pressing as it might seem. By virtue of being the largest firms, they work with the largest creditors, which mean much tighter scrutiny over practices.