CFPB Releases Annual Report on the Fair Debt Collection Practices Act

The CFPB released its annual report on the Fair Debt Collection Practices Act (FDCPA) for 2021 (the Report), highlighting debt collection data trends, enforcement actions, and regulatory changes.  The Report noted that borrowers took on more consumer debt in 2021 than they did in previous years, with a sharp increase in non-housing debt.  The Report stated that there has been an increase in collection agencies and contracts to collect debt, which started in the pandemic and has continued. 

The Report also highlighted consumer complaints.  The CFPB received the most complaints from consumers alleging that debt collectors tried to collect on debt that the consumer did not owe.  The second most common complaint came from written notifications of debt that the debt collector sent to the consumer.  Under the FDCPA, the debt collector has five days after the initial communication with a consumer, to provide the consumer with a written notice informing them, among other things, of their right to dispute, unless this information is contained in the initial communication, or the consumer has paid the debt.  Finally, consumers also complained about debt collectors threatening to take action against the consumer for a debt owed.

In addition, the Report provided insight into the enforcement actions that the CFPB took against debt collectors in 2021.  The most common debt collector violations that the CFPB took action on were impermissible communications with third-parties, calls to the consumer’s workplace, failure to cease communication after written request, harassment regarding inability to pay, threatening to communicate false credit information, deceptive means of collection, incorrect systemic implementation of state interest rate cap, unlawful wage garnishment, and failure to send complete validation notices.  In total, the CFPB brought five actions in federal court against debt collectors.  The CFPB received a judgment in their favor on two of those actions and three actions are still pending in federal court.  The CFPB stated in the Report that it plans to remain focused on bringing federal actions.  The CFPB also stated that it will start to investigate non-member debt collectors to determine whether their practices fall within the FDCPA and are subject to prosecution.  Finally, the Report highlighted the actions that the FTC took under the FDCPA to help small businesses handle fraudulent debt collections practices taken against them.