Consumer advocates are urging local governments and courts to consider a person’s ability to pay before assessing fines and fees for such infractions as unpaid traffic tickets. Such changes could help low-income households avoid bankruptcy — and perhaps even make them more bankable.
In the joint report with the Federal Trade Commission on debt collection practices, the CFPB said it had initiated four enforcement actions last year, had resolved one case and has five others pending.
Banks say that an appeals court’s decision to ease restrictions will allow them to warn customers more easily when loans are past due or accounts have been compromised. But consumer groups argue that the decision gives financial firms license to market their products more aggressively and could lead to more harassing phone calls over unpaid debts.
The tech giant won praise from consumer groups for its decision to ban ads for high-cost consumer loans. But the policy contains a big loophole, and advertisers have found multiple ways to exploit it.
Lustig, Glaser & Wilson often harassed the wrong consumers, demanded amounts that were not owed, bullied consumers into paying from exempt income, and failed to obtain legitimate documentation of those debts, state officials said.
As the CFPB prods banks to improve their debt collection processes, tech firms are applying artificial intelligence, chatbots and self-service portals to create a more enlightened approach.
