Jul 23, 2013 Philip Burgess
Lenders, banks and even department store retailers will be subject to greater debt collection scrutiny in the future. Any enterprise that fails to comply with the Fair Debt Collection Practices Act (FDCPA) and other legislation may face financial penalties if they are found to have violated any laws, as the Consumer Financial Protection Bureau (CFPB) steps up its plans to monitor debt services.
Bloomberg recently reported that banks that attempt to address customer debts will now be penalized for unlawful practices. The source reported that in the past, parties that attempted to close their own accounts were often exempt from CFPB punishment. Generally, only third party collection agencies were pursued by CFPB officials. However, last year the consumer protection organization announced that it would be increasing its monitoring activities.
According to The New York Times, even retail outlets can now be faced with sanctions for failure to follow FDCPA guidelines. It noted that Macy's is currently in the midst of addressing litigation filed by a customer claiming that the store's collection branch contacted him in a harassing manner, allegedly calling him as many as four times a day, a violation of the FDCPA.
FTC steps up monitoring
The Federal Trade Commission (FTC) is another government body that has been cracking down on debt collection practices. USA Today recently stated that FTC officials fined Expert Global Solutions for violating the FDCPA. Similar to the accusations filed against Macy's, the FTC indicated that the collection agency was guilty of contacting consumers several times a day and even made calls to consumers' workplaces.
The source stated that the company must pay $3.2 million in fines as a result of the verdict. Also, they will be required to record 75 percent of debt collection calls for a year, keeping them on file for at least 90 days.
The source reported that officials with Expert Global Solutions have already expressed a willingness to adhere to FDCPA standards and noted that the company has put measures in place to provide better services to consumers.
This case highlights how important it is for industry professionals to have a complete understanding of FDCPA standards. By requiring collectors to regularly take tests on best collection practices, agencies can ensure that their employees are well-trained and ready to close accounts without worrying about violating federal laws.