Debt collectors may have to cut calls
New rules would limit them to up to six attempts a week
Consumers who complain about non-stop debt-collection calls could get a break as part of possible sweeping rule changes federal watchdogs plan to outline Thursday.
Third-party debt collectors would be limited to up to six tries each week before a consumer is actually reached, according to proposals under consideration by the Consumer Financial Protection Bureau. Once the consumer is reached, the collector could make only three attempts total per week, including phone calls, emails and texts.
The CFPB wants to limit excessive or disruptive calls and make sure that collectors are going after debt that someone actually owes. About 70 million consumers are dealing with debt collectors.
Thursday, the CFPB will hold a field hearing in McClellan Park, Calif., to address the complaints regarding abusive debt-collection practices.
CFPB Director Richard Cordray said in prepared remarks that too often third-party debt collectors are motivated to go to almost any lengths to extract as much money as possible for an overdue car payment, medical bill or utility bill.
“This is because they are typically paid based on the amount they collect,” Cordray said in a statement. “The relationship may be fleeting, and the more distant risk of being called to account later may not outweigh the immediate urgency of getting paid today.”
ACA International, a trade group for the collection industry, said the industry plays an important role in helping small businesses collect debts owed to them and stay in business.
“Often those clients dictate to their vendor (the debt collector) how many calls are acceptable,” said Cindy Sebrell, vice president of public affairs for ACA International in Washington, D.C. In some cases, she said, debt collectors already limit the number of calls made to consumers.
About one in three consumers have been contacted by a creditor or debt collector in the past year, according to the CFPB. And debt collection ranked as the No. 1 complaint by consumers in 2015.