Why Does the Government Want to Catch Debt Collectors?

In recent months, the American government has ramped-up its efforts to encourage consumers to report abusive debt collectors. In a bid to collectively tackle the problem, there are now a couple of federal agencies that have complaint and reporting procedures in place in order to deal with unfair debt collection practices. In order for these efforts to work, however, consumers need to be proactive in reporting any illegal goings on.

Why is Uncle Sam keen to catch illegal debt collectors?

Uncle Sam is keen to catch debt collectors that do not abide by federal rules in order to help protect vulnerable Americans that may be the victims of harsh collection practices, coercion or abuse or other forms of financial bullying, all of which are illegal under many laws. As a part of the enforcement of these laws, debt collection companies that break the laws need to be caught in order to be brought to justice. Oftentimes, the best placed witnesses to their crimes are indeed the very consumers that they target.

Here are details of two such federal agencies:

1) The Federal Trade Commission

The FTC is perhaps the best known federal agency that oversees many aspects of consumer rights. It is America’s traditional consumer watchdog agency and has enforced the Fair Debt Collection Practices Act for many years.  Over the past few years, it has brought a number of high-profile cases against troublesome debt collection agents – in fact, the FTC receives more complaints about debt collection agencies than any other group within the financial sector.

2) Consumer Financial Protection Bureau

This is a new federal agency that has been formed in order to help spread consumer awareness over the rules that debt collection agencies are legally required to follow, in order for consumers to equip themselves with knowledge and protect themselves accordingly.

What is the aim of the Consumer Financial Protection Bureau?

The Consumer Finance Protection Bureau (CFPB) was set up as the first federal agency dedicated to ensuring that consumers are not taken advantage of by financial companies. While the FTC handles more standard companies, like banks and mortgage lenders, the CFPB’s remit covers non-traditional financial providers and firms such as debt collectors.

How can the CFPB help?

One of the most significant moves made by the CFPB was to produce some form letters that consumers will be able to use when dealing with debt collectors. These 5 form letters include the correct legal language to invoke consumer rights, request certain information and convey to debt collectors that certain behaviors and practices will not be tolerated.

The topics of the letters are as follows:

1)  Letter to use when a consumer needs more information on the debt:

This letter is for consumers whom want to request more information about the debt being claimed. It contains language that the consumer disputes the debt until the debt collection agency provides the specific information requested.
Download the “more information on the debt” letter

2)  Letter to use when a consumer wants to dispute the debt and for the debt collector to prove responsibility or stop communication:

This letter will inform the debt collector that the consumer wholly disputes the debt and instructs the collector to cease contacting the consumer unless they can provide evidence that the debt is legitimately the consumer’s.
Download the “dispute and proof” letter

3) Letter to use when a consumer wants to restrict how and when a debt collector can contact them:

According to The Fair Debt Collection Practices Act, debt collectors are prohibited from contacting a consumer about a debt in ways that interfere with or intrude into their lives, such as at anti-social times, via the phone, at work on even in person. This letter states to the debt collector how the consumer wants to be contacted to discuss the debt.
Download the “contact restriction” letter

4) Letter to use when a consumer has hired a lawyer:

This is the letter a consumer should send a debt collector if they have retained the services of a lawyer. It simply provides the lawyer’s information and instructs the debt collector to contact the lawyer only henceforth.
Download the “hired a lawyer” letter

5) Letter to use when the consumer wants the debt collector to cease and desist with any and all contact

Consumers have the right to tell a debt collector to stop all communication if they are being harassed, but this does not cancel the debt or prevent the collector from filing a lawsuit against the consumer.
Download the “stop contact” letter

Let us know if you have had success with using any of these letters to enforce your rights against debt collectors. Write to us in the comments section, below!