Abusive debt collectors, they're one of the top consumer complaints. But starting Wednesday, consumers have a new ally should they be hounded by a debt collector.
The Consumer Financial Protection Bureau is now taking complaints about all types of consumer debt collection, including those for credit cards, mortgages, auto loans, medical bills and student loans.
The CFPB will forward your complaint to the collection agency involved, which then has 15 days to respond with what they have done or plan to do.
Using this system, the CFPB expects all but the most complicated complaints to be closed in 60 days.
The bureau also developed five action letters that can be used when corresponding with debt collectors.
These templates are designed to help you get more information about the collector's claim, dispute the debt, or have the collector limit or stop contact with you.
The Association of Credit and Collection Professionals, supports the government's new role in the complaint resolution process.
"The ability for people to have their complaints resolved by working with a debt collector will have a significant benefit for both the collectors and the consumers," Mark Schiffman, the group's Vice President for Public Affairs said.
The Consumer Financial Protection Bureau also warned the industry today that it will hold companies accountable for unfair, deceptive or abusive practices.
It also cautioned debt collectors to avoid making statements that could be deceptive or illegal.
- Falsely representing the amount or legal status of the debt.
- Threatening action that the debt collector does not have the authority to pursue, such as false threats of lawsuits, arrest, prosecution or imprisonment for non-payment of debt.
- Failing to properly post payments or credit to a consumer's account and then charging late fees.