CFPB Releases 2019 FDCPA Report; Announces Extension Of Comment Period

The CFPB's annual report on its activities with debt collection was released on March 20. You can find the full report here.

There are several items that deserve calling out:

1) False Representation of the Amount and Legal Status of the Debt (Section 807(2)(A) of the FDCPA)

In its examinations conducted in 2019, the Bureau found that "one or more" agencies falsey represented the amount due and incorrectly assessed/collected "interest not authorized by the underlying contracts between the debt collectors and the creditors."

Adding interest to accounts is not without risk -- whether its assessing it or properly noting it on the collection letters -- and most RESEARCH ASSISTANT members would rather not add interest charges at all, due to the liability issues that come along with this practice.

2) Failure to Disclose in Subsequent Communications That Communication is from a Debt Collector (Section 807(11) of the FDCPA)

In its examinations, the CFPB also noted that some agencies weren't explicit in every communication with a consumer that the call or letter was from a debt collector.

"In response to these findings, the collectors revised their Section 807(11) policies and procedures, monitoring and/or audit programs, and training."

3) Failure to Send Notice of Debt (809(a) of the FDCPA)

"Examiners found that one or more debt collectors failed to send the prescribed validation notice within five days of the initial communication with the consumer regarding collection of the debt, where required."

4) Debt Collection Amicus Briefs

• Wiley v. Notte & Kreyling, P.C.
• Preston v. Midland Credit Management, Inc.
• Rotkiske v. Klemm
• Bender v. Elmore & Throop, P.C.
• Obduskey v. McCarthy & Holthus, LLP
• Lavallee v. Med-1 Solutions, LLC

5) Bureau Law Enforcement Actions

• Consumer Financial Protection Bureau v. Universal Debt & Payment Solutions, LLC, et al
• Consumer Financial Protection Bureau v. Forster & Garbus, LLP
• Consumer Financial Protection Bureau & State of New York v. Douglas MacKinnon, Mark Gray, Northern Resolution Group, LLC, Enhanced Acquisitions, LLC and Delray Capital, LLC
• Financial Credit Service, Inc., d/b/a Asset Recovery Associates

6) Supplemental Notice of Proposed Rulemaking: Extension on Comments for Time-Barred Debt Collection

"Additionally, the Bureau announced today that it is extending the comment period on its Supplemental Notice of Proposed Rulemaking (SNPRM) implementing the Fair Debt Collection Practices Act (FDCPA). The SNPRM, which proposed to require debt collectors to make certain disclosures when collecting time-barred debts, provided a 60-day public comment period that was set to close on May 4, 2020. Given the challenges posed by the COVID-19 pandemic, the comment period will be extended to June 5, 2020."

insideARM previously published an article regarding the extension of the comment period. It can be found here.