The Consumer Financial Protection Bureau wants debt collectors to “adequately document” claims before obtaining judgments against consumers, Acting CFPB Deputy Director Steve Antonakes told a June 6 joint CFPB-Federal Trade Commission Roundtable.
Reform efforts, Antonakes disclosed, are underway in some courts.
“As litigation has become an increasingly used collections activity, we have been following these court reforms and their impact on evidentiary requirements. We are also aware that states are looking into these issues and what records should be maintained and provided to consumers when creditors pursue debt collections through the courts,” Antonakes noted in prepared remarks.
The roundtable event examined data integrity throughout the debt collection process--from the original lenders to collection agencies to evidence used in court cases over disputed debts. The FTC, which hosted the forum, shares rule-writing and enforcement authority with the CFPB for nonbank debt collectors.
“Multiple market participants create, communicate, update, and use common sets of information or even shared information systems in their roles in the debt collection process. So each of us has a role to play in formulating solutions whether they are technologies, recordkeeping practices, data standards, or designing new systems, disclosures, or rules,” Antonakes posited.
The CFPB began its supervision of debt collection practices at large bank lenders and payday lenders to ensure compliance with federal consumer financial protections laws. Then, in January 2013, the CFPB initiated the first federal-level supervision regime for nonbank debt collection firms--a move that allowed the bureau to conduct exams and routine monitoring of those companies in a manner similar to bank supervision.
Even though the CFPB has plans to focus attention on the practices of debt collectors and debt buyers, Antonakes stated that banks and other lenders will continued to face close scrutiny because they are the ones furnishing consumer information to the debt collection companies.
“Original creditors should ensure that a sufficient amount of information about the debt is being made available. So we pay close attention to whether debt collectors have accurate information when they are collecting debts,” he added.
For their part, debt collectors must take their own steps to ensure the accuracy of the consumer information--including fundamental facts such as the consumer's identity and the amount of the debt--especially as the information “ages or gets passed down the line to secondary or tertiary buyers,” Antonakes continued.
The CFPB will be closely examining whether consumers are able to dispute debts that they believe to be incorrect, he stated.
“If the debt collector has furnished information about the debt to a credit reporting company, the collector has additional obligations under the Fair Credit Reporting Act to investigate disputes and inform the company of any inaccuracies it finds,” Antonakes pointed out.
Text of the prepared remarks by Antonakes is available at http://www.consumerfinance.gov/speeches/steve-antonakes-remarks-at-life-of-a-debt-data-integrity-in-debt-collection/.
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