CFPB announces nationwide crackdown on abusive debt collectors
The Consumer Financial Protection Bureau announced a nationwide crackdown on abusive debt collection practices in coordination with the Federal Trade Commission and more than 50 federal and state law enforcement agencies.
The initiative announced Tuesday, called Operation Corrupt Collector, details steps by agencies to punish firms for wrongdoing, inform consumers of their debt collection rights and help them to deal with collection attempts for "phantom" debt, often referring to purchases that the consumer does not recall making.
Under the initiative so far, the FTC has filed five cases against debt collectors, the CFPB has filed two cases and the Department of Justice has brought three criminal cases along with the U.S. Postal Inspection Service, the CFPB said.
The announcement of the crackdown comes a month before the CFPB plans to release a rule to update the Fair Debt Collection Practices Act of 1977.
“The CFPB is actively working to protect consumers from illegal actions of debt collectors,” CFPB Director Kathy Kraninger said in a press release. “We will continue to monitor the financial marketplace, as well as consumer complaints received, in order to ensure that we identify and take action against debt collectors who are violating the law. Lastly, consumers should know that the Bureau’s consumer complaint system is a resource for them to submit any complaints they may have on their experiences with financial services providers.”