New Federal Agency CFPB to Oversee Debt Collectors — Including Lawyers and Law Firms

cfpb

cfpb (Photo credit: afagen)

The Washington Post reported on October 23, 2012 that the Consumer Financial Protection Bureau (CFPB), a new federal “watchdog agency,” will be overseeing debt collection firms with receipts of more than $10 million, and that the collection firms overseen will include lawyers and law firms:

The CFPB’s authority extends to three types of debt collectors: companies that buy defaulted debt and collect the proceeds for themselves; firms that recover defaulted debt owned by another company in return for a fee; and lawyers who collect through litigation.

The current federal consumer financial law requires debt collection firms to provide accurate information and disclosures to consumers, and they cannot harass or deceive consumers in an effort to collect debt. These firms often report collection status to the various credit bureaus, which if inaccurate, can have long term effects on consumer credit and the ability to obtain loans, including mortgages, car loans and credit cards.

So legal consumers who are being pursued by debt collectors can rest a little easier that treatment by the debt collectors will be fair . . . even if a law firm is in pursuit.

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