Approximately 30 million Americans have an average of $1400 debt in collection, according to the Consumer Financial Protection Bureau (CFPB). Their proposal: they should police companies with more than $10 million in annual receipts from debt collection. Their goal: help consumers hoping for debt relief to get a break from abusive and unfair debt collectors.
An article in Forbes indicates that the CFPB currently oversees payday lenders, mortgage companies and private student lenders. This next step is significant because since the recession the Federal Trade Commission (FTC), the group that normally helps consumers dealing with unscrupulous debt collectors, has not been able to keep up with the rising debt levels and consumer complaints.
The in-depth series by the Wall Street Journal, “The Debt Collectors,” reported that the FTC database received nearly 165,000 complaints as of December 8, 2011. That number is 17% higher than all debt-collection complaints recorded by the FTC for 2010. Additionally, in a 2010 report, “Repairing a Broken System,” the FTC noted that the “system for resolving disputes about consumer debt is broken.”
So now it is in the hands of the CFPB to provide supervision over debt collectors and certain reporting agencies the same way the government oversees the banking industry. Estimates are that this will likely include about 175 debt collection firms that account for 63% of the annual receipts collected.