The Consumer Financial Protection Bureau (CFPB) announced on July 28, 2016, that it is considering proposals to overhaul the debt collection industry that would include the following measures:
Substantiation of the debt prior to contact. Debt collectors would be required to substantiate a debt prior to making any contact with a consumer to ensure they have sufficient information, including the debtor’s full name, address, phone number, account number, default date, amount owed and any payments made following the default date.
Limitation on communication with consumers. Debt collectors would be limited to six communication attempts per week. The proposals would also make it easier for consumers to limit how debt collectors can contact them — for example, not allowing calls or communication at work or during specific hours.
Provide specific information on debt and make it easy to dispute. Debt collectors would be required to provide specific information about the debt in their initial collection notices, and also include details about the consumer’s legal rights. Collectors would also have to disclose if the debt is time-barred for legal action and also include a perforated portion to the notice that allows consumers to either pay the debt or send in a dispute quickly and easily.
30-day response to disputes. If a debt collector receives a dispute notice back within 30 days of sending the initial notice, the collector would be required to provide the consumer with a debt report and cannot pursue the debt until that report is sent.
Cease collection efforts without proper documentation. If a consumer disputes the debt, the collector would be required to halt all collection efforts until the necessary documentation is verified. A collector cannot collect on any debt that lacks sufficient evidence. If the collector has knowledge that the debt information could be inaccurate or incomplete, the collector cannot collect until there is sufficient verified information.
Disputes cannot be passed on without response. If a disputed debt is transferred to another debt collector, the new collector cannot try to collect until the dispute is resolved. Information on the dispute must be passed on to the new collector when a disputed debt is transferred.
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