You can say a lot of things about the Consumer Financial Protection Bureau, but one thing you can’t say is that they keep you in the dark about what they are thinking and the issues that matter to them. One of the ways they keep the credit and collection industry updated is by publishing summaries of what they find during examinations of companies in this space. These Supervisory Highlights reports offer glimpses into the types of issues that are being uncovered and can serve as a crystal ball that shows what types of issues are likely to be the focus of future enforcement actions. In its latest issue, which the CFPB released yesterday, the Bureau highlighted issues with debt collectors misleading and harassing consumers.
The report highlights several debt collection practices that violated Regulation F and the Fair Debt Collection Practices Act (FDCPA):
- Failure to Provide Debt Validation Notices: Some debt collectors failed to provide the required validation information either orally or in writing within five days of the initial communication with consumers. This occurred both in telephone communications and written correspondence.
- False, Deceptive, or Misleading Representations: Examiners found instances where debt collectors used false company names in communications and failed to provide key initial disclosures as required by Regulation F.
- Inconvenient Communications: Debt collectors were found to have communicated with consumers at inconvenient times or places, including before 8 a.m. in the consumer’s time zone and continuing conversations after consumers explicitly stated it was an inconvenient time.
- Harassing, Oppressive, or Abusive Conduct: The report highlighted cases where debt collectors engaged in verbally abusive behavior towards consumers explaining financial difficulties. In some instances, collectors placed over 100 calls to consumers after being asked to stop.
- Failure to Cease Communication Through Specified Mediums: Some collectors continued to communicate through mediums (such as text messages) or specific phone numbers that consumers had requested not be used.
- Lack of Proper Disclosures in Subsequent Communications: Examiners found that some debt collectors and their service providers failed to disclose in subsequent communications that the communication was from a debt collector.
- Incorrect Documentation of Statute of Limitations: Credit card issuers were found to have incorrectly calculated and documented the debt collection statute of limitations, potentially leading to improper collection attempts on time-barred debts.
