FDCPA Overhaul

[ctown18]

In light of the FTC's report on consumer complaints about debt collection, what changes would all of you make if you were able to change and update the FDCPA? Larger fines? More requirements with regard to validation? Chain of ownership?

http://abcnews.go.com/US/debt-collectors-federal-trade-commission-received-140000-complaints/story?id=13193079&page=2

Just trying to stir the pot...

Edited March 28, 2011 by ctown18

[momof5]

Make fines per infraction at the statutory amount of $10K instead of $1K.

[VADebtor]

Exolicitly make filing suit, or threatening to file suit on out of SOL debt a violation, go to the $10K statutory damages, plus attorney's fees as suggested earlier.

[Guest usctrojanalum]

make violations 5k. $1 in the 1970's had the purchasing power of about $5 now

[Florida_Bronco]

make violations 5k. $1 in the 1970's had the purchasing power of about $5 now

I'd go even further than that. Make the fines $5000 or 2.5 times the amount of the alleged debt, whichever is higher.

[donqII]

I'd go even further than that. Make the fines $5000 or 2.5 times the amount of the alleged debt, whichever is higher.

This...... and make it per violation, not just a single fine no matter

how many violations.

[Florida_Bronco]

This...... and make it per violation, not just a single fine no matter

how many violations.

Agreed. Now that I think about it, I'd structure it like this.

$1000 per violation

-OR-

$5000

-OR-

2.5 times the amount of the debt.

Whichever is higher.

[admin]

Make fines per infraction at the statutory amount of $10K instead of $1K.

I could live with that.

[ctown18]

I would concur with all of these suggestions. These fines would sting a little more than the measly $1000 now...that's peanuts compared to what they can stand to make on all of the default judgements that they get (risk vs cost). The question is, who can make these changes? Do you think that the new Consumer Financial Protection Bureau will have ANY power whatsoever, or will it be just a puppet to the FTC?

[Guest usctrojanalum]

The FTC has stated that the CFPB will have the power to make rules, an authority which right now the FTC does not possess. If that is true, who knows time will tell.

[ctown18]

Here's a great story, and food for thought. What is the GOP so afraid of, stopping the banking industry from screwing people?!?

http://abcnews.go.com/Business/cfpb-elizabeth-warren-congress-adult-conversation/story?id=13211419

[nobk4me]

If the $1K damages are set forth in a statute, then only Congress can change the law.

[Methuss]

I would amend the statute to per violation leaving it at $1000 per. This would make it easier to pass through. A simulataneous increase in amount plus compounding would be deemed too extreme. Most collectors mess up enough times that you'll get your $5k to $10k per case.

I would add that suit for out of statute debt is an automatic violation. This is really just a formality since they are required in the current law to not misrepresent the legal status of the debt, which they already violate when they file suit on SoL debt -- they are swearing it is valid and collectable in the complaint. Just spell it out so there is no ambiguity.

Lastly I would add violations for attempting to collect on discharged debt. This shadow industry of buying, selling, sitting on and attempting to collect debts that have been eliminated in bankruptcy needs to be formally shut down. It goes against the very principles of the discharge injunction. Make it actionable by the consumer without having to drag them into a BK court. Make it criminal in cases of rampant abuse so the AGs can lock up the offenders.

Edited March 30, 2011 by Methuss

[Denita]

I would amend the statute to per violation leaving it at $1000 per. This would make it easier to pass through. A simulataneous increase in amount plus compounding would be deemed too extreme. Most collectors mess up enough times that you'll get your $5k to $10k per case.

I would add that suit for out of statute debt is an automatic violation. This is really just a formality since they are required in the current law to not misrepresent the legal status of the debt, which they already violate when they file suit on SoL debt -- they are swearing it is valid and collectable in the complaint. Just spell it out so there is no ambiguity.

Lastly I would add violations for attempting to collect on discharged debt. This shadow industry of buying, selling, sitting on and attempting to collect debts that have been eliminated in bankruptcy needs to be formally shut down. It goes against the very principles of the discharge injunction. Make it actionable by the consumer without having to drag them into a BK court. Make it criminal in cases of rampant abuse so the AGs can lock up the offenders.

I agree with your first two points but the third point - I'm not sure that making it a criminal offense would solve the issue. Perhaps just much larger fines (per action) would work better. Make the fines so large that the market to sell discharged debt is effectively shut down. If there is no profit in selling discharged debt - then that market will dissappear.

Your point about making it actionable by the consumer without going into BK court would be a huge push in the right direction.

[Guest usctrojanalum]

Also, make the SOL the same length in every single state.

[momof5]

Here's a great story, and food for thought. What is the GOP so afraid of, stopping the banking industry from screwing people?!?

http://abcnews.go.com/Business/cfpb-elizabeth-warren-congress-adult-conversation/story?id=13211419

Very biased reporting and this is obviously an Opinion by a Left leaning/Left-wing journalist. Add to that "abc", and I couldn't even stomach reading past page 1.

Good Lord! We need to eliminate ALL reporters and journalism schools and start over!

FACTS, just the FACTS!

[Dr. Evil]

Also, make the SOL the same length in every single state.

ten years

[Denita]

ten years

Naturally you would say "ten years"...aren't you a collector?

I think a reasonable SOL time period is three years

[jq26]

There has to be some give and take. When a consumer defaults, there has to be some way to collect the balance. Every well-intended law we place in here makes it more difficult and more expensive.

If the collection industry is effectively shut down, creditors will just keep the collection activities in-house and bypass FDCPA, then just sue you directly. They can avoid the chain of custody issues and all of the documentation gaps that go along with bulk account transfers to CAs and JDBs.

The borrowers breached on their contract and now there must be a mechanism to secure payment. You'll either force creditors into the courthouse directly or unsecured credit will be a thing of the past for most because only borrowers with sizable amounts of nonexempt assets (ie the wealthy) will be worth suing. I'm okay with shutting down all unsecured credit to the bottom half of this country, but understand the consequences of doing so.

[donqII]

Naturally you would say "ten years"...aren't you a collector?

I think a reasonable SOL time period is three years

agreed............

[LearningasIgo]

Very biased reporting and this is obviously an Opinion by a Left leaning/Left-wing journalist. Add to that "abc", and I couldn't even stomach reading past page 1.

Good Lord! We need to eliminate ALL reporters and journalism schools and start over!

FACTS, just the FACTS!

No, it was more of an opt ed piece, i.e., a column. It wasn't a reported hard news story by a standard journalist. And ABC is "left-wing"? Really?

And "facts" were used to support the opinions. It's a "known fact" that many of the Republican factions (and for sure, the big banks) are hostile to Elizabeth Warren....or perhaps "fear" her input and influence. Because of her previous "columns" (her opinions supported by facts) the idea of a consumer protection agency has blossomed into a beginning reality.

[LearningasIgo]

I would amend the statute to per violation leaving it at $1000 per. .

The $1000.00 came into existence in about 1978. Almost 30 years have gone by. By any reasonable frame, there needs to be a reasonable increase adjustment. In 1978, the $1000.00 had considerable more bite to it, and most likely produced results for which the amount was intended, i.e., to keep the bad guys from dippiing into the dirty tricks bag so often.

Decades have obviously eroded the "bite".

[LearningasIgo]

If the collection industry is effectively shut down, creditors will just keep the collection activities in-house and bypass FDCPA, then just sue you directly. They can avoid the chain of custody issues and all of the documentation gaps that go along with bulk account transfers to CAs and JDBs. .

If that were the profitable way to go, the OC's would already be doing just that, en masse. There are good reasons for the collection industries to have multiplied so rapidly in the last couple of decades; the OC's discovered the way to billions and billions were in the numbers' game, the high interest loophole found via the exodus to S. Dakata, the elimination of a grace period, engendering the climate of outrageous penalities and fees, and most of all, what is referred to as the "unsophistcated" consumers. The more the merrier, since that's where the big bucks rest.

[ctown18]

Very biased reporting and this is obviously an Opinion by a Left leaning/Left-wing journalist. Add to that "abc", and I couldn't even stomach reading past page 1.

Good Lord! We need to eliminate ALL reporters and journalism schools and start over!

FACTS, just the FACTS!

I wouldn't call myself a "bleeding heart", but more of a moderate. One would think that everyone on this site are consumer advocates, and therefore, would lean a little left.

That being said, when the first vote for credit card legislation was voted on, it was almost completely along party lines. All the Dem's voted for it, except for the states which had the big CC companies in them (S.D. and Delaware...shocker) and all of the Rep's voted no.

Also, why did George W. say when asked before he was leaving office if the original CC legislation was passed by cogress and made it to his desk, that he would veto it? Hmmmm, maybe because in 1999, Charles Cawley threw a cocktail party at his summer home in Kennebunkport, Maine, inviting 200 people to greet the town's most famous part-time resident, George W. Bush. The oceanfront soiree raised $200,000 for the candidate -- but Cawley wasn't acting purely out of neighborly good will. As the head of MBNA America Bank, the nation's biggest independent issuer of credit cards, Cawley wanted Bush to push for a new law making it harder for families hit by unemployment or huge medical bills to declare bankruptcy. Sure enough, not long after taking office Bush backed the measure -- which would add $75 million a year to MBNA's bottom line. After that, Cawley returned the favor by inviting Laura Bush to his Delaware home to greet 120 supporters -- raising $150,000 for her husband's re-election.

Edited March 31, 2011 by ctown18