The Daily Caller

The Daily Caller
U.S. President Barack Obama announces consumer advocate Elizabeth Warren (R) as special adviser leading the creation of the Consumer Financial Protection Bureau in the Rose Garden of the White House in Washington September 17, 2010. REUTERS/Kevin Lamarque (UNITED STATES - Tags: POLITICS BUSINESS) - RTR2IGQO U.S. President Barack Obama announces consumer advocate Elizabeth Warren (R) as special adviser leading the creation of the Consumer Financial Protection Bureau in the Rose Garden of the White House in Washington September 17, 2010. REUTERS/Kevin Lamarque (UNITED STATES - Tags: POLITICS BUSINESS) - RTR2IGQO  

Obama’s Consumer Financial Protection Bureau records ‘bad behavior’ by debt collectors without investigating complaints

The Obama administration’s Consumer Financial Protection Bureau (CFPB) uses subjective criteria for analyzing complaints against debt collectors that ties collectors to “bad behavior” — without actually investigating for real misconduct, according to a leading trade group.

CFPB, an agency created by the Obama administration with the guidance of now-Senator Elizabeth Warren, presented an annual report Thursday that “seeks to justify the CFPB’s existence” but leaves errors unaccounted for, according to ACA International, the country’s largest third-person debt collection industry trade group.

CFPB, which prevented Republican Rep. Sean Duffy from gaining entrance to its Thursday advisory committee meeting, earned a sharp rebuke from the debt collecting industry for allegedly recording misconduct where none occurs.

“The CFPB’s definition of a complaint is very subjective. While a consumer may not like something (such as being contacted about a debt or receiving multiple calls) it does not mean that the collector actually did anything wrong. Neither the CFPB nor the [Federal Trade Commission] investigates these complaints as to whether a complaint actually violates the law. Painting the collection of consumer debts with a broad brush and then alluding it ties to bad behavior paints an inaccurate picture of an extremely necessary, yet sometimes uncomfortable, activity,” ACA said.

ACA noted that CFPB has no plan in place to allow debt collectors to leave voice mail messages rather than calling people repeatedly, a practice that often leads to complaints.

“A closer look at concerns over call frequency leaves out discussion of a very significant ‘catch-22,’ which is a significant underlying factor prompting debt collectors to call more often instead of leaving voice mail messages,” ACA said. “Under the Fair Debt Collections Practices Act (FDCPA) a debt collector can not divulge the existence of a consumer debt to anyone but the consumer or their attorney, and it also says that a debt collector must identify themselves.  There is currently no safe harbor language for leaving a voice mail that assures a debt collector can comply with the FDCPA. ACA is calling on the CFPB for the creation of safe harbor language to allow collectors to leave voice mail messages that comply with FDCPA.”

As an industry that takes complaints and their resolution with consumers very seriously, the CFPB’s report offers helpful perspective but isn’t valuable for setting public policy. As important as these raw data are, it seeks to justify the CFPB’s existence but falls short in looking at the underlying causes that better explain this information,” said ACA International CEO Pat Morris in a statement. “We will continue to conduct our own quarterly analysis of the data and encourage consumers to communicate with debt collectors because avoiding contact does not make a debt disappear.”

Despite, or perhaps because of, its apparent eagerness to hold debt collectors accountable for wrongdoing, CFPB responds to debt-collection complaints in a timely manner 96 percent of the time.

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