CFPB Issues Stern Warning on Debt Collection
The Consumer Financial Protection Bureau (CFPB) announced that all companies under Bureau jurisdiction will be held accountable for unlawful conduct in collecting a consumer's debts.
The companies under the CFPB's watch include buy-here, pay-here dealers and auto finance companies.
The CFPB is now accepting debt collection complaints and is publishing action letters for consumers to consider using in corresponding with debt collectors.
The Bureau published two bulletins on debt collection. The first makes clear that any entity subject to the Consumer Financial Protection Act of 2010, whether a third-party collector or a creditor collecting its own debts, can be held accountable for any unfair, deceptive, or abusive practices in collecting a consumer's debts. The second warns companies to avoid deceptive statements concerning the impact of paying a debt on a consumer's credit score, credit report, or creditworthiness.
According to the first bulletin the following practices, among others, may be illegal:
Threatening action that the debt collector does not have the authority to pursue. Debt collectors and creditors should not make false threats of lawsuits, arrest, prosecution, or imprisonment for non-payment of debt.
Falsely representing the character, amount, or legal status of the debt. Debt collectors and creditors should not falsely represent who owns the debt, the amount of debt that is owed, or the debt's legal status.
Misrepresenting that a consumer's debt would be waived or forgiven. Debt collectors and creditors should not misrepresent that a debt would be waived or forgiven if a consumer accepted a settlement offer when the company is not, in fact, forgiving or waiving the debt.
Failing to properly post payments or credit to a consumer's account with payments. Debt collectors and creditors should not fail to properly post payments or credit to a consumer's account and then charge late fees to that customer if the customer paid on time.
Firm Launches Fair Lending Training
The National Independent Automobile Dealers Association has endorsed the Wolters Kluwer Financial Services fair lending training program.
Wolters Kluwer Financial Services recently launched the program, which is targeted to the automotive, recreational vehicle, marine and powersports dealer industry.
Developed as a response to increased lender pressure and industry scrutiny of fair lending practices within the dealer marketplace, the training provides dealers with a comprehensive program to educate finance department personnel and equip them with fair lending standards needed to help them ensure compliance and maintain strong lender relationships.
The training program educates and tests users on key fair lending regulations, and provides them with a customizable fair lending policy to use in their dealership for ongoing operational compliance. The program also provides dealers with a template to manage and track standard exceptions for demonstrating compliance with exception policies to lenders.