The Consumer Financial Protection Bureau (CFPB) has more to do with your debt collection claim than you might think. Professionally, your business may deal with consumers directly or indirectly. Personally, CFPB has a lot to do with how companies approach you to collect debt and other financial products. You may be an accountant brought in to do work for several related companies and asked to handle the officer’s personal tax work. The portion of the debt related to the collection of the receivable for the individual tax work would be covered.
Or, perhaps you are a contractor working in a commercial space, and then, while working in the building, the apartment owners ask you to handle some renovations in individual apartments. If the individual owner or tenant owes the receivable and you seek payment from the individual through a debt collector, the CFPB will have a watchful eye.
What is the Consumer Financial Protection Bureau?
The CFPB is a federal agency designed to ensure that financial companies including debt collectors treat all consumers fairly. The CFPB determines how, where, and when you can pursue debt collection efforts against your consumer customer. The bureau also specifies the behavior debt collectors can engage in. Debt collectors cannot:
- Use or threaten violence
- Make repeated phone calls with the intent to abuse or harass you
- Use obscene or profane language
- Call at hours they know are inconvenient
- Contact you at work if the debt collector knows or believes your employer prohibits personal calls
The Bureau educates, establishes and enforces rules, and has a compliance arm addressing debt collection as it relates to consumer collections. Each state has its own set of rules to complement the federal rules enforced by the CFPB. In New York State, it’s the Department of Financial Services.
The CFPB regulates debt collection only as it relates to consumer debt. The collection of commercial debt is not regulated by the CFPB. However, as highlighted above, you, as a consumer and as a business owner, should become familiar with the CFPB. The CFPB also acts as a database that logs complaints against collection agencies and collection attorneys. The public record includes the names of the debt collection agencies, law firms, and lawyers, accused of wrongdoing as well as what the debt collector is accused of.
The CFPB handles enforcing violations of federal consumer laws related to debt collection. The agency files enforcement against those they suspect violated consumer protection laws. Pertinent court documents and more can be found on the CFPB website. How the CFPB prosecutes the claim is up to the agency. It can either file a case in United States Federal Courts to enforce the Federal Fair Debt Collection Act or the Fair Debt Collection Practices Act or by way of an administrative adjudication proceeding headed up by an administrative law judge.
If you have a question regarding a debt collection matter, contact Frank, Frank, Goldstein and Nager for a consultation. We have the experience that pays.
