AG Coakley Urges Adoption of Greater Consumer Protections Against Unfair Debt Collection Practices
Letter to Consumer Financial Protection Bureau Calls for New Debt Collection Rules to Help Even Playing Field for Consumers, Members of the Military
BOSTON – In a push for the adoption of tough new debt collection rules that will better protect consumers and members of the military, Attorney General Martha Coakley joined a coalition of states in urging the Consumer Financial Protection Bureau (CFPB) to help improve the overall performance of the debt collection market.
AG Coakley joined 30 states plus the District of Columbia in a letter sent to the CFPB, asking CFPB to “create a more even playing field for consumers, provide greater consumer protections, and assist consumers in better understanding their rights.” The agency sought input from regulators, the collection industry, and consumers about the debt collection system and avenues for potential rulemaking.
“Our office continues to see consumers harmed by deceptive and abusive debt collection practices, and we are seeking federal rulemaking that supports our state regulations and helps ensure that all consumers are treated fairly,” AG Coakley said. “We urge the CFPB to create comprehensive and balanced new rules that better enable debt buyers and debt collectors to follow the law and put more robust consumer protections in place.”
In Massachusetts, the number of complaints regarding debt collection practices remains high, with more than 550 consumer complaints filed with the AG’s Office last year. Nationally, debt collection complaints topped all others that consumers filed with state attorneys general.
Among other recommendations, the Attorneys General urged the CFPB to:
- Give states co-enforcement authority to address violations of new debt collection rules;
- Apply debt collection rules to original creditors as well as to debt buyers;
- Require those who sell debts to transfer detailed original account information;
- Ensure that collectors possess credible supporting evidence before initiating collection or litigation activity;
- Require collectors to extend traditional protections to unfair collection practices to new modes of communication, such as cell phones and text messages;
- Implement rules to address the collection of time-barred debts; and
- Better protect members of our military by limiting collectors' contacts with military members, particularly those deployed in combat zones.
In 2012, the AG’s Office amended its Debt Collection Regulations to include communications through cell phones and text messages in its defined unfair or deceptive acts or practices. Massachusetts and other state regulations were highlighted as a model for proposed CFPB rulemaking.