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Consumer Financial Protection Bureau begins overseeing debt collection practices

The federal government is stepping in and starting to supervise the tactics and procedures of debt collection agencies, as reported by The New York Times in an October 24, 2012 news article.

Starting January 2, 2013 the Consumer Financial Protection Bureau will begin being in charge of overseeing the practices of debt collection agencies. The government stated that they believe the intervention is necessary because millions of consumers are being affected by debt collectors.  By stepping in the government is hoping that these companies will make “better business choices.”

The bureau will create and enforce stronger consumer protection laws. Some of these laws include having the agencies properly identify themselves to consumers immediately and properly informing the consumer of the debt owed. Their failure to uphold these laws will result in the agencies being monetarily penalized. For every violation the amount of the penalty will increase.

For several years the federal government has implemented guidelines for these debt agencies to follow. However, the number of complaints filed against debt collectors has increased in the last few years, most likely because now consumers can file online. Due to the number of complaints rising the government is now stepping in to better enforce these rules.

Starting in January the debt collectors will have to start making and filing reports for the government’s reviews. These reports will help establish whether there are any risks to the consumers by the collector’s practices. The overall focus is to better protect the consumers against aggressive actions.

We at the law offices of Jayson Lutzky, P.C. can provide you with the information you need when considering filing bankruptcy or if you have already filed. If you need to file for bankruptcy and you are in need of legal advice, please feel free to call us at 1-800-660-5299 for a free initial consultation or visit our website www.MyNewYorkCityLawyer.com.

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