The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (Bureau or CFPB) reported on their 2018 activities to combat illegal debt collection practices. The annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA) highlights both agencies’ efforts to stop unlawful debt collection practices, including robust law enforcement, education and public outreach, and policy initiatives.
In the report, the FTC states that it filed or resolved a total of seven cases against 52 defendants, and obtained more than $58.9 million in judgments. The FTC also banned 32 companies and individuals that engaged in serious and repeated law violations from ever working in debt collection again. The FTC continued its aggressive efforts to curb egregious debt collection practices, including initiating or resolving four actions involving phantom debt collections. The FTC returned $853,715 to consumers who lost money to two phantom debt collection operations previously stopped by the FTC. In 2018, the FTC also:
- Initiated or resolved three other actions, in addition to the phantom debt cases, to protect consumers from unlawful debt collections practices;
- Deployed educational materials through multiple channels and formats to inform consumers about their rights and educate debt collectors about their responsibilities under the FDCPA and FTC Act;
- Collaborated with an informal network of about 16,000 community-based organizations and national groups as part of its outreach efforts;
- Distributed 13.4 million print publications to various organizations, businesses, and government agencies;
- Logged more than 60 million views of its business and consumer education websites, with more than 592,000 views of the consumer videos on the FTC’s channel at YouTube.com/FTCvideos, and over 280,000 email subscribers to its consumer blogs;
- Supplied more than 24,000 copies of a fotonovela (graphic novel) on debt collection, developed for Spanish speakers, to raise awareness about scams targeting the Latino community;
- Logged more than 4.7 million page views on its Business Center that houses business education resources; and
- Issued a new Staff Perspective discussing the various financial issues that military servicemembers face, including the unique challenges that can arise in the debt collection context.
In the report, the Bureau states its intent to issue a Notice of Proposed Rulemaking on debt collection that will address issues ranging from communication practices to consumer disclosures. The Bureau highlights in the report that it handled approximately 81,500 debt collection complaints related to first-party (creditors collecting on their own debts) and third-party collections. Debt collection is among the most prevalent topics of consumer complaints about financial products or services received by the Bureau. In 2018, the Bureau engaged in six public enforcement actions arising from alleged FDCPA violations. The Bureau brought an action that resulted in an $800,000 civil penalty. It also accepted a judgment in favor of the defendant in a second case. Four other FDCPA cases remain in active litigation. In 2018, the Bureau also:
- Filed briefs as amicus curiae in two cases arising under the FDCPA – one in the Supreme Court and one in federal court of appeals;
- Identified one or more violations of the FDCPA through its supervisory examinations;
- Conducted a number of non-public investigations of companies to determine whether they engaged in collection practices that violated the FDCPA or the Dodd-Frank Act (DFA);
- Provided consumer debt collection educational materials, which have consistently remained among the most-viewed categories in “Ask CFPB,” an interactive online consumer education tool;
- Trained, as of the end of 2018, over 26,535 staff and volunteers in social service organizations on Your Money Your Goals – a financial empowerment toolkit;
- Continuously operated the 21-day email course called “Get a Handle on Debt Boot Camp,” a program to get periodic messages about steps to manage debt effectively, which attracted 19,294 sign-ups since launching in November 2017;
- Offered five sample letters that consumers may use when they interact with debt collectors, which have now been downloaded more than 607,000 times as of December 2018;
- Offered print publications on financial topics including debt collections, such as the bilingual brochure “Know Your Rights When a Debt Collector Calls”; and
- Continued research projects and market monitoring and outreach activities to improve its understanding of the debt collection market, and to better understand the benefits, costs and impacts of potential rules, including a report on collecting telecommunication debt, which have aided in the ongoing development of a potential debt collection rule.
The FTC and the Bureau share enforcement responsibilities under the FDCPA. Last month, the agencies reauthorized their memorandum of understanding that continues coordination between the agencies in enforcement, sharing of supervisory information and consumer complaints, and collaboration on consumer education.
The FTC and the Bureau remain vigilant in their efforts to monitor the debt collection industry and stop unlawful conduct that harms both consumers and legitimate businesses. The CFPB’s annual report to Congress on the FDCPA, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, includes information provided by the FTC in its letter to the CFPB.
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