The CFPB has released its Fair Debt Collection Practices Act (FDCPA) Annual Report 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 non-housing debt surging. The report says there has been an increase in collection agencies and debt collection contracts, which began during the pandemic and has continued.
The report also highlighted consumer complaints. The CFPB received the most complaints from consumers alleging that debt collectors were trying to collect a debt that the consumer did not owe. The second most common complaint came from written notices 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 advising them, among other things, of their right to object, unless this information is contained in the initial communication, or the consumer has paid the debt. Finally, consumers have also complained about debt collectors threatening to sue the consumer for a debt owed.
In addition, the report provided an overview of the enforcement actions that the CFPB took against debt collectors in 2021. The most common violations of debt collectors that the CFPB took action on were illicit communications with third parties, consumer workplace calls, failure to cease communication after written request, harassment regarding inability to pay, threats to provide false credit information, misleading means of collection, improper systemic implementation of cap state interest rates, illegal wage garnishment and failure to send complete validation notices. In total, the CFPB filed five federal lawsuits against the debt collectors. The CFPB has received a judgment in their favor on two of these actions and three actions are still pending before the Federal Court. The CFPB said in the report that it plans to remain focused on introducing federal stocks. The CFPB also said it will begin investigating nonmember debt collectors to determine if their practices fall under the FDCPA and are subject to prosecution. Finally, the report highlighted actions taken by the FTC under the FDCPA to help small businesses manage fraudulent debt collection practices against them.