New Consumer Finance Protection Bureau to Regulate Debt Collectors and Credit Reporting Agencies

Consumers who have fallen behind in their payments of unsecured credit card debt worry about debt collector phone calls and collection attorney lawsuits.   The truth is debt collectors have trouble documenting credit card debt well enough for a court to grant a judgment against an alleged credit card debtor.  To make up for that fact, debt collectors tell lies and make threats over the telephone.  And, collection attorneys file numerous lawsuits hoping most who owe will not respond and suffer a default judgment.

According to the Los Angeles Times,

“the new Consumer Finance Protection Bureau is ready to crack down on the nation’s large credit reporting and debt collection companies, proposing tough new oversight on two arcane financial groups that affect nearly all consumers.“

“Debt collectors and credit reporting agencies have gone unsupervised by the federal government for too long,” Richard Cordray, the bureau’s director, said Thursday in announcing the effort.

Debt collection has been second only to identity theft in consumer complaints to the Federal Trade Commission in recent years. The bureau estimated that 30 million Americans have debts in the collection process.

The three large credit reporting companies, Experian Information Solutions Inc., Equifax Inc. and TransUnion, have records on 200 million Americans and hold the key to getting a credit card or mortgage — and increasingly even a job.

Jean Ann Fox, director of financial services at the Consumer Federation of America, said “You can prevent problems, make sure everybody is complying with the law and make sure consumers aren’t being abused or harmed, rather than trying to get a refund after the fact or a penalty after the fact or an injunction after the fact”.

If you owe and cannot pay, there is hope. Seven Dangers of Not Knowing How to Deal with a Debt Collector.

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