Jun 10, 2013 Philip Burgess
Lawmakers have passed aggressive measures to combat missteps by debt collection companies in the last few years and now efforts appear to be ramping up even further. Edwards Wildman Palmer LLP recently reported that the first criminal proceedings relating to a Consumer Financial Protection Bureau (CFPB) investigation have been announced.
According to the source, the CFPB has the jurisdiction to audit financial institutions and debt agencies that it regulates. The current case focuses on a debt-relief firm that allegedly collected $1.3 million in an unlawful manner, as well as other unspecified infractions.
InsideARM also reported that the New York City Department of Consumer Affairs is attempting to establish fines that could reach six figures for debt collectors who violate city law. Passed in 2009, the source noted that a series of regulations have enabled the city department to increase their regulatory efforts.
Debt collectors need to be cautious when conducting business, as many unknowingly violate the Fair Debt Collection Practices Act (FDCPA). Statistics from FDCPA Case Listing Service showed that lawsuits relating to FDCPA transgressions are predicted to top the 12,000 mark in 2013. Also, the source noted that the 10,115 lawsuits filled against collectors in 2012 was a 295 percent increase from similar cases filed in 2007.