A consumer has filed a petition with the Consumer Financial Protection Bureau for the regulator to require debt collection and debt buying organizations disclose how much a debt was purchased for or how much they are poised to receive upon collection of a debt as a means of improving the transparency in the collection process.
Background: Back in early 2022, the CFPB announced that anyone would be able to submit a petition for rulemaking. Since then, there have been a number of petitions filed by consumer advocacy organizations, trade groups, and ordinary people. Anyone who wants to comment on the petitions is free to do so. And the CFPB can decide whether to act on the petition or to close it without taking any action on it.
- This petition was filed by Jordan Vint of Holly Ridge, N.C.
Details: Along with disclosing how much it paid for a debt or how much it is going to get paid if the debt is recovered, Vint is also asking the CFPB to require collectors accept any proffered lump-sum settlement amount from a consumer provided it covers the costs associated with purchasing the debt and occurs within 30 days of the initial communication between the consumer and the collector.
The Intention: Noting that “too often” outstanding debts are purchased for “pennies on the dollar,” and that companies buying those debts still try to collect the full amount that is owed, a “lucrative” industry has been created even if it “exists on the periphery of American society.” Running a collection operation will be less attractive if companies have to disclose this information and will improve consumer confidence and reduce consumers’ stress associated with “financial distress across the country,” Vint noted.
