Market Overview

Are Late Night Phone Calls From Debt Collectors a Thing of the Past

How many of you have taken on credit card debt, then had situations change regarding employment or something else that affects financially, then received a bunch of increasingly unpleasant letters until, finally, the debt gets passed to a collection agency and then things REALLY get nasty. Phone calls in the middle of the night, one after the other, non-stop mail – they usually stop short of sending a heavy around to break some legs. But you get the idea.

According to CNN, the Consumer Financial Protection Bureau released a proposal on Thursday that would effectively limit the power of those debt collection agencies who right now have a stranglehold on Americans.

"Our proposed rule would mean that those debt collectors and credit reporting agencies that qualify as larger participants are subject to the same supervision process that we apply to the banks," said Richard Cordray, director of the consumer bureau. "This oversight would help restore confidence that the federal government is standing beside the American consumer."

Naturally, if this proposal were to come to pass, then consumers all over America could be impacts. Latest figures indicate that there are approximately 30 million with debt under collection, and the average unpaid debt is approximately $1,400.

In this economy, with unemployment and debt still a major problem for many Americans, the behavior of many of these collection agencies is very often immoral and sometimes borderline evil. They harass and target individuals, and that is something which obviously has to stop.

Another very pertinent factor is that employers are relying more and more on the data they receive from these agencies. This means that a person might not get a job because of information sent out by a credit agency and yet, unfathomably, nobody has been checking that data up to this point.

Of course, nobody is suggesting that people should be able to borrow money without paying it back in the future. However, nobody should have to be harassed either. In fact, up to now the only course of action the public has had to prevent this behavior is to go to court claiming harassment. Some of those cases have had positive outcomes too, although the results have been mixed.

The new proposal wants to target the agencies with some sort of restrictions that banks are currently faced with. Under new guidelines, the bureau would be able to walk into the offices of any collection agency and look over the books.

Essentially, the collection agencies will no longer be acting as separate entities under their own rules. The priority of the government has to be to protect the public, the individuals, rather than the businesses. This proposal does that very thing.

Posted-In: News Legal Personal Finance Best of Benzinga

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