CFPB's growing database

Debt collectors have faced a variety of new challenges in recent years, especially those related to the use of advanced technology and communication channels. However, many of the most prevalent issues related to complaints and poor turnarounds on collection efforts can be quickly mitigated through simple adherence to the Fair Debt Collection Practices Act.

As a result of increased activity in the debt collection industry, largely because of the record volume of outstanding loans currently held by businesses, consumers and recent college graduates, the federal government has strengthened oversight and regulatory compliance efforts.

For example, the Consumer Financial Protection Bureau was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Now, the CFPB continues to roll out new rules and intensify regulatory efforts.

Larger database
Alan Kaplinsky and Jeremy Rosenblum of Ballard Spahr LLP recently explained that the CFPB has made the decision to expand its consumer complaint database, which is open to the public. This is the latest move in a long line of moves to broaden the oversight powers of the bureau, including the CFPB's management of the nation's largest debt collectors.

According to the authors, the CFPB's decision was effective March 28, and more than quadruples the number of complaints currently posted for public research. This represents an increase from 19,000 complaints before the expansion, to 90,000 following, while the newer filings are related to student and consumer loans, as well as mortgages and bank deposit products.

The CFPB, along with the Federal Trade Commission, fields hundreds of thousands of complaints every year, many of which are related to debt collection. However, the CFPB decided to begin including complaints related to inaccurate or fraudulent credit reporting tactics as well, which has started to see an increase amid notions that common practices might not be the best for consumers or businesses.

Finally, Kaplinsky and Rosenblum added that the CFPB's Snapshot and Annual Report revealed that 70 percent of all debt collection-related complaints received in 2012 were in regard to credit cards and mortgage loans. Still, many experts continue to assert that the number of complaints fielded by the CFPB and FTC are not a strong indication of the state of the debt collection industry, as less than half have been verified by either agency.

Lack of commission
The Daily Sundial recently reported that the federal government has passed a decision to not allow debt collectors to obtain commission for student loan-oriented jobs. According to the news provider, debt collectors often received 16 percent commissions on such accounts, and officials believe that this will improve the transparency and efficacy of the sector.

However, some experts believe that this law will not make much of a difference, and the government should instead be teaching students methods to not fall into debt. Debt collectors will need to remain in compliance with the FDCPA, and should consider refining internal policies and training protocols to ensure all employees are following the best practices as dictated by the modern era.