The one industry numerous people have been waiting for the Consumer Financial Protection Bureau to start watching is debt collection agencies. The CFPB does have the mandate to do so, as they are non-bank financial companies. The agency has also informed numerous corporations in the debt collection business that they will be under Consumer Financial Protection Bureau supervision starting in Jan.
Laws not to be broken
Debt collectors are not all that bad much of the time, but there are a few bad ones that given the rest a bad name. The industry and the people working in it are hated by most.
In 2011, over 180,000 complaints were made about debt collectors to the Federal Trade Commission, according to the New York Times. That is a ton of growth from 2000 when it was only 13,950 complaints. Most of the bad activity is clearly with smaller firms since only 21 percent of grievances to the Federal Trade Commission were from the top 100 debt collectors.
The CFPB has finally publicized that it is prepared to bring in the industry's behavior, which many people have been waiting for.
Additional guidelines soon
People should always repay their personal loans and other debts that they take out willingly, but abuse is never the answer to anything. That is why debt collectors are expected to be honest and civil with those they collect from. Starting Jan 2, 2013, the CFPB will actually be checking to make sure debt collectors are in line.
All non-bank financial institutions are under control of the CFPB as the Dodd-Frank Act requires.
The Consumer Financial Protection Bureau only supervises corporations that have over $10 million or more in recipients, which only accounts for 175 of the 4,500 debt collection companies in the country. About 63 percent of the business is done in the big businesses, which means at least $12.2 billion a year is being viewed closely, according to the New York Times. The small businesses may be able to get away with their bad practices still.
Get the industry taken care of
It is unknown if this will actually help the customers. Though the top 100 accounted for 21 percent of complaints, that is also a lower rate of complaint; roughly 5 per 1 million people, than for other industries, according to Forbes.
The largest firms are the largest creditors, and it makes sense that they would be more careful with their practices. It may not be worth creating guidelines just for them since the small businesses are making the mistakes. Still, the CFPB is working on guidelines to regulate the market better.
Laws not to be broken
Debt collectors are not all that bad much of the time, but there are a few bad ones that given the rest a bad name. The industry and the people working in it are hated by most.
In 2011, over 180,000 complaints were made about debt collectors to the Federal Trade Commission, according to the New York Times. That is a ton of growth from 2000 when it was only 13,950 complaints. Most of the bad activity is clearly with smaller firms since only 21 percent of grievances to the Federal Trade Commission were from the top 100 debt collectors.
The CFPB has finally publicized that it is prepared to bring in the industry's behavior, which many people have been waiting for.
Additional guidelines soon
People should always repay their personal loans and other debts that they take out willingly, but abuse is never the answer to anything. That is why debt collectors are expected to be honest and civil with those they collect from. Starting Jan 2, 2013, the CFPB will actually be checking to make sure debt collectors are in line.
All non-bank financial institutions are under control of the CFPB as the Dodd-Frank Act requires.
The Consumer Financial Protection Bureau only supervises corporations that have over $10 million or more in recipients, which only accounts for 175 of the 4,500 debt collection companies in the country. About 63 percent of the business is done in the big businesses, which means at least $12.2 billion a year is being viewed closely, according to the New York Times. The small businesses may be able to get away with their bad practices still.
Get the industry taken care of
It is unknown if this will actually help the customers. Though the top 100 accounted for 21 percent of complaints, that is also a lower rate of complaint; roughly 5 per 1 million people, than for other industries, according to Forbes.
The largest firms are the largest creditors, and it makes sense that they would be more careful with their practices. It may not be worth creating guidelines just for them since the small businesses are making the mistakes. Still, the CFPB is working on guidelines to regulate the market better.