The CFPB is addressing first-party debt collection practices through its authority under the Consumer Financial Protection Act. July’s issue of ACA International’s Collector magazine features a report on how creditors need to update their compliance management systems to follow the standards of the Fair Debt Collection Practices Act in response to the CFPB’s enforcement actions.
By now, most businesses in the financial services industry know about the Consumer Financial Protection Bureau and its ever-increasing presence in the marketplace. In response to the CFPB’s oversight, proactive business owners and compliance officers are updating their companies’ compliance management systems to avoid unwanted attention from the CFPB.
According to ACA International Compliance Analyst Andrew Pavlik, companies can easily overlook their internal debt collection practices when developing or revamping a compliance management system.
Generally, these “first-party” debt collection practices are exempt from the federal Fair Debt Collection Practices Act, Pavlik reports in the July issue of ACA International’s Collector magazine.
As such, some creditors may not have felt the need to consider whether their own internal collection practices may run afoul of the FDCPA.
Compliance with the FDCPA is a must not only for third-part collection agencies, but for creditors as well.
The CFPB is addressing first-party debt collection practices through its authority under the Consumer Financial Protection Act to prevent unlawful, deceptive and abusive acts and practices.
In the article, Pavlik provides detailed information on how UDAAPs apply to first-party collections, first-party debt collection enforcement actions and practical considerations for the industry.
First-party debt collectors should review and update their policies and procedures to consider conduct prohibited by the FDCPA—paying special attention to oral and written communications with consumers, third-party communications, representations regarding consumer reports, handling of payments, settlement offers and threats or litigation, according to the article.
Read the full article, “Me, Too?” in the July issue of Collector magazine.