Debt collection regulations continue to shift

Debt collectors, especially those in certain states where regulators have been particularly active, have experienced a swift and extensive changing of the guard in recent years. The federal government has been looking to make adjustments to the Fair Debt Collection Practices Act (FDCPA) and enhance its enforcement efforts to ensure consumer protection and minimize the risk of fraudulent activity in the sector.

InsideARM recently listed several changes to the FDCPA that are expected to have massive implications in the industry, and noted that many elected officials on Capitol Hill have been getting louder about their concerns. In the past three years, the Federal Trade Commission (FTC) has received an increasing volume of complaints against debt collectors, and this has been a cause for concern among advocacy groups.

Additionally, the Consumer Financial Protection Bureau (CFPB) has stepped to the plate to work with the FTC against the immoral, illegal and non-compliant actions of certain collection agencies. According to the news provider, the FDCPA, which was written and put into action back in the late 1970s, has been in need of some revisions because of modern communication capabilities and the Internet.

For example, many collectors, as well as debtors, have been confused about the best practices of using text messages, social media and other methods to communicate about collections. The source explained that the CFPB is hoping to modernize the law in the coming years, while many of the changes will adjust the best practices of collection agency management.

Debt collectors should always keep abreast of all federal discussions related to the industry, as well as state efforts to amend laws and modernize enforcement protocols, to remain compliant in this turbulent period. As a rule of thumb, agencies should avoid using any methods to contact debtors that they do not fully understand from a legal standpoint.