In a welcome move by the Consumer Protection Financial Bureau, they announced recently that they are going to be investigating original creditor’s for unfair debt collection practices. According to a story at BusinessWeek.com, “The new policy, which follows efforts to rein in abusive credit-card and lending policies, will plug a gap in federal anti-harassment law that generally excluded creditors who collected debt themselves, rather than hiring third parties.”
Just so we are clear, this does not extend the Fair Debt Collection Practices Act to original creditors. But what it does is make sure that the government is looking at how original creditors collect debts, including credit card companies. Under the FDCPA, an original creditor can call you as much as they want, call you when you have an attorney, and generally not advise you of your rights. The FDCPA only applies to third party debt collectors.
Some states, including California, have state protections that apply to original creditors. For example, California’s Rosenthal Fair Debt Collection Practices Act, also known as the Rosenthal Act, does apply to original creditors. Under the Rosenthal Act, an original creditor cannot call you before 8am or after 9pm, and the original creditor must follow all of the same rules that a third party debt collector follows.
The federal government is getting serious about debt collectors cleaning up their acts. While this will not change the law, this enforcement should help protect consumers.
Remember, if you get contacted by a debt collector, either the original creditor or a third party collector, learn your rights, talk to an attorney for a free consultation, and make sure you are protected from their harassing and abusive behavior.