The Consumer Financial Protection Bureau is back with another blog post warning consumers about unfair debt collection practices, this time surrounding being contacted while at work. This follows a post from a couple of weeks ago about junk fees that can be assessed by debt collectors.
The big picture: Debt collectors unlawfully contacting consumers at work, or their employers, remains a critical concern for regulators. Despite protections under the Fair Debt Collection Practices Act, recent CFPB findings reveal ongoing violations that exploit legal loopholes and outdated provisions, according to the Bureau.
What’s happening:
- CFPB examiners recently discovered that some companies:
- Unfairly called consumers’ workplaces or references, even after being asked to stop.
- Abusively inserted consent language in loan applications to justify workplace calls — actions deemed illegal.
- Historical enforcement actions:
- In 2014, the CFPB secured millions in relief from a debt collector for contacting military commanding officers.
- In 2018, a $5 million penalty was imposed on another collector for workplace harassment practices.
Driving the news: The CFPB has urged Congress to address outdated FDCPA provisions allowing debt collectors to contact third parties for “location information.” With widespread cell phone use, these calls are often unnecessary and serve primarily to embarrass or pressure consumers into paying.
What they’re saying: “Debt collection practices that exploit workplace vulnerability undermine consumer rights and economic stability,” the CFPB noted. “We continue to urge Congress to close these gaps and protect consumers.”
Be smart: Professionals in the debt collection industry should prioritize compliance and avoid practices that could be deemed unfair or abusive. Key considerations:
- Avoid contacting consumers at their workplaces unless explicitly permitted.
- Ensure loan agreements do not include deceptive consent clauses.
- Proactively review communication strategies to prevent legal and reputational risks.
