Starting in Jan, debt collection agencies will be under the supervision of the CFPB. Many have been waiting for the Consumer Financial Protection Bureau to bring that market in, but time will tell if it makes a difference.
New Sherriff finally here
Few classes of businesses are as reviled as debt collectors. Though many are reasonable enough and upstanding companies, the bad apples, as with any business or group of any sort, give the market a bad name. Given some of their behavior, they possibly have it coming.
In 2011, over 180,000 grievances were made about debt collectors to the Federal Trade Commission, according to the New York Times. That is a lot of growth from 2000 when it was only 13,950 grievances. Much of the bad activity is definitely with smaller firms since only 21 percent of complaints to the FTC 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 individuals have been waiting for.
New guidelines starting in Jan
Starting January 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau supervision. The agency asserts that it wants debt collection companies will have to clearly identify themselves and disclose the amount of debt owed, also as communicates "civilly and honestly" with people they try to collect a debt from. Granted, people should pay their personal loans and other obligations, but that doesn't mean they should be subjected to abuse.
All non-bank financial institutions are under control of the Consumer Financial Protection Bureau as the Dodd-Frank Act requires.
However, the direction doesn't bring even the majority of debt collectors under its purview. CFPB supervision, according to the Washington Post, will cover those with $10 million or more in yearly receipts, or about 175 of the 4,500 debt collection companies operating nationwide. However, they also represent 63 percent of the business done by the industry, which according to the New York Times makes up roughly $12.2 billion per year as a whole.
Not all that negative
According to Forbes, about 5 in every one million people complain even though the top 100 businesses only accounted for 21 percent of complaints. There are not that many complaints regardless of the bad news of debt collection agencies.
It is not worth regulating top players considering they do not account for the majority of the issues, though the Consumer Financial Protection Bureau is still working on additional guidelines for the market. There is more scrutiny with practices because they are the largest creditors and largest firms.
New Sherriff finally here
Few classes of businesses are as reviled as debt collectors. Though many are reasonable enough and upstanding companies, the bad apples, as with any business or group of any sort, give the market a bad name. Given some of their behavior, they possibly have it coming.
In 2011, over 180,000 grievances were made about debt collectors to the Federal Trade Commission, according to the New York Times. That is a lot of growth from 2000 when it was only 13,950 grievances. Much of the bad activity is definitely with smaller firms since only 21 percent of complaints to the FTC 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 individuals have been waiting for.
New guidelines starting in Jan
Starting January 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau supervision. The agency asserts that it wants debt collection companies will have to clearly identify themselves and disclose the amount of debt owed, also as communicates "civilly and honestly" with people they try to collect a debt from. Granted, people should pay their personal loans and other obligations, but that doesn't mean they should be subjected to abuse.
All non-bank financial institutions are under control of the Consumer Financial Protection Bureau as the Dodd-Frank Act requires.
However, the direction doesn't bring even the majority of debt collectors under its purview. CFPB supervision, according to the Washington Post, will cover those with $10 million or more in yearly receipts, or about 175 of the 4,500 debt collection companies operating nationwide. However, they also represent 63 percent of the business done by the industry, which according to the New York Times makes up roughly $12.2 billion per year as a whole.
Not all that negative
According to Forbes, about 5 in every one million people complain even though the top 100 businesses only accounted for 21 percent of complaints. There are not that many complaints regardless of the bad news of debt collection agencies.
It is not worth regulating top players considering they do not account for the majority of the issues, though the Consumer Financial Protection Bureau is still working on additional guidelines for the market. There is more scrutiny with practices because they are the largest creditors and largest firms.
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