CFPB Highlights Debt Collection Issues in Latest Supervisory Report 

Key Findings in Debt Collection Practices 

The CFPB’s report identified several violations of Regulation F, which enforces the Fair Debt Collection Practices Act, among larger participant debt collectors. 

Debt Validation 

Examiners found instances where debt collectors failed to provide the required validation information to consumers. Specifically: 

• Debt collectors did not supply validation information either orally or in writing within five days of the initial oral communication, particularly when the initial contact was made via telephone, even after being notified that prior written disclosures were undelivered. 
• Student loan debt collectors failed to provide necessary validation notices when the initial communication was in writing. 

False, Deceptive, or Misleading Representations 

In their communications, both written and oral, debt collectors were found to use different names and did not disclose their true company names. In response, these collectors will now cease using incorrect names and update all scripts and correspondence to reflect their true identities. 

Examiners also found that debt collectors: 

• Used false, deceptive, or misleading representations by not providing key initial disclosures required by Regulation F. These disclosures inform consumers that the communication is an attempt to collect a debt and that any information obtained will be used for that purpose. 
• Failed to make the necessary disclosures in both initial oral and subsequent written communications, as well as in all further communications with consumers. 

 Harassing, Oppressive, or Abusive Conduct 

The report highlighted instances of aggressive and abusive behavior by debt collectors: 

• Debt collectors took a harsh tone with consumers who explained their inability to make payments due to medical issues.
• Debt collectors ignored requests to stop contacting consumers, placing over 100 calls to some individuals. Although the call frequency was within legal limits, this conduct was deemed harassing given the consumers’ specific requests to cease communication. 

Cease Communication Requests 

Debt collectors continued to contact consumers through mediums or specific telephone numbers that consumers had explicitly requested not to be used. 

Disclosures in Subsequent Communications 

Examiners noted failures in disclosing that communications were from a debt collector, especially by service providers communicating on behalf of the collectors via telephone or text message. Additionally, electronic payment confirmations lacked the required disclosure. 

Documentation Related to the Statute of Limitations 

Some entities were found to misrepresent the statute of limitations on credit card debt, falsely stating it as ten years instead of five. This included accounts where the statute of limitations had already expired.