Economic News, Smart Spending

Consumer Finance Protection Bureau to Crack Down on Debt Collectors

The Consumer Financial Protection Bureau is a government agency that helps to protect consumers from fraud.  They mostly deal with issues surrounding mortgages, credit cards, and the like.  This is the agency where you go when you have a complaint about credit card fraud or any other type of consumer complaint.  To date, the CFPB has been instrumental in being an advocate for the consumer and protecting them against unscrupulous lenders.  The Consumer Finance Protection Bureau is now expanding its services one step out, and monitoring debt collectors.

Nobody likes being in debt.  It is stressful and can even have a negative physical effect.  When those debts cannot be paid on time, people are sent to collections.  While the debt collection business is a legitimate business, the collectors will sometimes break the law in order to harass the borrower into repaying the loan.  There are rules the collectors need to follow, and when they do not follow them, consumers have a new place to turn to complain and get assistance.

This new oversight will provide the monitoring of collections agencies that has been needed for years.  They will be expected to follow the law, including providing the right disclosures and documentation, as well as acting civilly when approaching those who owe money.  To date, the collections agencies have been received a bad reputation because their employees pester and degrade those they are collecting on.  Hopefully, with the new oversight, those degrading practices will be eliminated.

With the new program consumers can feel safer.  There are many stories of people who have been badgered relentlessly until they are forced to move and change their phone numbers from debt collectors.  Now, when this happens, there is a complaint department ready to investigate at the CFPB.  The consumer has a voice, and it will now be heard.  While there still will be a few bad apples that slip into the bushel, many of the unscrupulous collectors will be driven out of business.

There are an estimated 30 million Americans who are in the debt collection process.  While many of them are being treated like humans, there are many others that are being treated poorly.  Beginning January 2nd, 2013 they will have a new place to turn.  They will be able to get advice, and have an advocate.  The Consumer Financial Protection Bureau will make lives easier for those who have had a tough time already with their finances.