Debt Collector Harassment Laws May Be Changing Soon

Debt collection is a multibillion dollar industry in the United States that, while already heavily regulated, may soon be facing a huge overhaul. According to the Chicago Tribune, the Consumer Financial Protection Bureau recently proposed revised legislation that would institute several industry changes including new limits on the number of times per week that collectors can call delinquent borrowers, increased documentation requirements for collection agencies, and new ways in which borrowers can dispute their debts. While most of the proposed changes to the debt collection industry are aimed at curbing debt collector harassment, it is important to understand that even under our country’s current laws collection agencies are not allowed to make threatening or harassing phone calls. Despite these laws, many creditors continue these illegal practices. If you are being harassed by a creditor or a collection agency, contact a competent debt collector harassment lawyer in order to end the harassment.

The Fair Debt Collections Practices Act

The Fair Debt Collection Practices Act currently regulates debt collection practices within the United States and prohibits creditors and collection agencies from harassing or threatening their borrowers. Congress passed this Act nearly 40 years ago, and its reach is extensive as approximately 70 million Americans are contacted by at least one debt collector each year. The Fair Debt Collection Practices Act was created to eliminate abusive, deceptive, and unfair debt collection practices, but the Consumer Financial Protection Bureau believes that the Act does not go far enough and that it is time for another overhaul of the American debt collection system.

The Proposed Rule

The Chicago Tribune reports that the proposed overhaul would only impact third-party debt collectors, aka collection agencies that are in the business of collecting delinquent debts on behalf of creditors. If adopted, the new rules would prohibit collectors from engaging in more than six communication attempts per week with an individual borrower. Additionally, debt collectors would also be required to more substantially prove that a particular debt is valid before they attempt to collect that debt. Furthermore, the proposed rules would also require collectors to provide easier methods for borrowers to dispute a debt’s validity. For example, in the future borrowers may be able to start disputing a debt’s validity over the phone, rather than in writing.

While these changes may appear to be substantial, some people are arguing that the proposed rules do not go far enough and that additional industry reforms are needed. For example, an article from the Chicago Tribune argues that the proposed rules overlook the finer points of the debt collection process and that while the rules are not bad, they are simply too limited. As an example, the article points out that the proposed rules require debt collectors to tell debtors if the statute of limitations has run on a particular debt, however, the rules stop there and do not prohibit collectors from actually suing over that outdated debt.

Need Legal Advice?

If you live in Illinois and are being harassed by a debt collector now is the time to take action. Contact the Bentz Holguin Law Firm, LLC today to discuss your legal options during a free consultation. Our experienced debt relief lawyers would be happy to help you and can be reached by calling 312-647-2116.