Debt collection practices are abusive and harmful. Medical debt particularly is widespread and hugely damaging to people’s quality of life and prevents them from reaching towards financial stability. Debt collectors can be misleading, abusive, and often dead wrong when they call to collect on debts. Right now, people don’t know what they can do about it. The Consumer Finance Protection Bureau (CFPB) just released a rule that’s meant to help protect consumers but mostly helps protect the debt collectors themselves.
Alaska Debt Collection: Quick Facts
Debt collectors call consumers more than a billion times per year.
More Americans fear medical debt than serious illness
More than one million borrowers default on their student loans each year
Debt and debt collections have been found to be the second leading cause of suicide among Army Reservists.
Borrowers of color are more likely to be contacted by debt collectors
Consumers have lawyer representation in less than 10% of debt collection court cases
The risk of judgment was twice as high in majority Black census tracts as it was in majority White census tracts.
Alaska is above the national average for people with debt in collections.
Issues with the new Consumer Finance Protection Bureau rule:
1. Allowing collectors to ring you 7 times per week, per debt. Consumers with 8 medical debts could receive 56 calls a week!
2. Allowing collectors to contact you by text, email or direct message without your permission, and sending legally required notice through hyperlinks in email or texts.
3. Allowing collection attorneys to sue you without reviewing original account documents to make sure you are the right person and the debt is the right amount.
4. Collection of debt that is so old that the deadline for a lawsuit has passed and records of who owes the debt and for how much may be lost.
What the CFPB can and should do:
Stopping telephone harassment,
Banning collection of time-barred “zombie” debt, and
Protecting consumer privacy.
What you can do:
Submit a comment about your opposition to predatory debt collection practices today.