Tuesday, October 5, 2010

Regulators to the rescue?

BISMARCK, N.D. -- Only some of the buzz here at the annual meeting of the North American Collection Agency Regulatory Association is about Sen. Al Franken's proposed "End Debt Collector Abuse Act," S. 3888.
The optimistically titled bill would, if passed, make it illegal for collectors to seek arrest warrants for debtors, a practice that the Minneapolis Star Tribune exposed in a series in June. (However, material describing the bill says it will not increase the burden on the Federal Trade Commission or add to enforcement costs. Meaning, it won't increase resources for enforcement of the FDCPA's many existing protections, which are going widely ignored already.)
The state-level regulators also heard from an FTC official about other initiatives to address the continuing increase in complaints about collectors. As he was speaking, the agency released a policy statement about what collectors can and can't do when trying to collect debts of the deceased. The proposed rule would draw new boundaries for who collectors could speak to, and what they could and couldn't say, about the dead's finances.http://www.ftc.gov/opa/2010/10/debtcollect.shtm

This is just the initial step of a potential rule, and it looks like protections for the living will take a while longer still. The practice of debt buying, where people's overdue accounts are passed around  on an open market, is getting a look. The agency sought data from nine large debt buyers in 2008, and plans to issue a report on its findings soon, the agency representative to the NACARA conference said. One of the problems that have been cited with debt sales is a lack of supporting account information that would show, or not, whether the supposed debtor really owes the money. The FTC said that the new Consumer Financial Protection Bureau being set up in Washington will have the authority to require credit issuers to provide documentation when they sell accounts. However, the agency, created by the Dodd-Frank financial reform act, has a full plate of issues and could take years before it gets around to dealing with collection.

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