Accounts Receivable Management Featured Article

New Debt Collection Rules Restrict Collection Firms, Help Consumers

November 27, 2012

The ARM (News - Alert) sector is impacted by the new debt collection rule from the Consumer Financial Protection Bureau (CFPB). It will redefine who is considered to be a “larger participant” in the debt collection market.

The new rule comes as debt buyers, third party debt collection agencies, and law firms doing commercial collection with revenue over $10 million a year find themselves under supervision by the CFPB beginning Jan. 2, 2013.

About 175 ARM companies out of some possible 4,500 companies may be impacted by the agency’s final rule. The 175 firms represent over 60 percent of the industry’s annual receipts in the consumer debt collection market.

Also, the CFPB may supervise smaller collection agencies, especially if they do work for larger companies. The agency could also supervise a company if it suspects the firm “poses a risk of harm to consumers,” according to Inside ARM.

The number of consumer complaints filed about a firm will lead to determining which firms are “risky.” The new law/regulation requires debt collectors to be more transparent and honest. It also will help ensure a firm has the right data on consumers. Also, it requires that there is a dispute resolution process. It will restrict any harassment of consumers.

About 10 percent of Americans are dealing with debt collectors, according to data from the CFPB. “Approximately 30 million Americans have, on average, $1,500 of debt subject to collection,” the agency said in a recent statement. “Debt collectors often report consumers’ collection status to the credit bureaus. If they get the information wrong, this can be the difference between getting approved or denied for such financial products as a mortgage or a car loan.”

The bureau monitors banks, credit cards, credit reporting, debt collectors, payday loans, private education loans, and residential mortgages, according to TMCnet.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.




Edited by Brooke Neuman

Article comments powered by Disqus

Related Accounts Receivable Management Articles

ICM Introduces a New AP Center Referral Program

Accounting processes can get complex and tedious, if done without right tools and technologies. Thankfully, there are countless solutions that make accounting accurate and easier for users. [ Read More ]
08/28/2014

Wells Fargo Launches Startup Accelerator Program

Helping startups in the financial technology sector to accelerate their business, Wells Fargo will be accepting applications for the new Wells Fargo Startup Accelerator. This semiannual boot camp seeks to help technological innovators in the field of finance who facilitate customers to have smoother operations in areas like payments, deposits, fraud, and operations. [ Read More ]
08/26/2014

LendProtect UK Inks Deal with Engaged CRM

LendProtect UK partnership with Engaged CRM looks to helps financial services analyze lending performance. [ Read More ]
08/25/2014

SaaS Provider Offers Accounts Payable Improvements to Material Handling Company

A global software-as-a-service company that provides enterprise content management solutions through the cloud announced last week that it has opened up a contract with a "leading material handling equipment company." [ Read More ]
08/18/2014
FREE Accounts Receivable Management enewslettter.

Events

Weekly Live Demo
Contact Center Solutions

Register Today!


Weekly Live Demo
CaaS Small Center

Register Today!