Debt Collection Regulation: areas ripe for reform

Fair Debt Collection Practices Act was enacted in 1978. The FDCPA is a federal law that is part of Consumer Credit Protection Act, and serves to regulate the debt collection industry. Although it contains some important safeguards for consumers, much has changed in the three decades since the adoption.

If you have been abused by debt collectors is, without doubt, to understand the ways in whichthe law can be improved. While the U.S. Senator Al Franken (D-MN) introduced legislation in September 2010 entitled "The End Debt Collector Abuse Act," Congress has not considered the bill. However, there are many areas of the FDCPA that is ripe for reform. Here are some:

Penalties: If a collection agency is taken to court and the court determines that the debt collector has violated the FDCPA, the consumer may grant up to $ 1,000, plus legal costs.Today, the penalty is the same as it was in 1978, and is not adjusted for inflation. The legislation by Senator Franken would have tied the maximum penalty for consumer prices. It makes sense to increase the penalty to a fine of $ 1.000 is little incentive for collectors to stay on the right side of the law.

Prohibit debt collection obsolete: A few months ago, the Federal Trade Commission has invited states to regulate more heavily on debt collectionindustry, particularly with respect to debt that has passed the statute of limitations. Since then, some states, like New Mexico, did that require collectors to inform consumers that the agency can not take consumers to court to collect. Too often, collectors mislead consumers to make a payment to "reset the clock" of the debt and make it more current. Each state has different statute of limitations, but the bottomline is that buyers of the debt should not be able to deceive the consumer as a debt 's legal status.

more stringent requirements of Cause: These days, collection agencies debt often ignore the usual methods of collecting and almost immediately take consumers to court. Consumers often do not realize that I have been sued or can not afford legal representation, so that collection agencies win default judgments. In other words, it is not even aplaying field. However, agencies can submit hundreds of complaints a month, essentially what the taxpayers pay the bill (for costs associated with the judicial system) for collecting activities. Require the debt collection agencies "to provide validation debt before filing a lawsuit would be a first step in the fight against abuse of the legal system. Maybe some kind of arbitration, similar to that of arbitration established by the State to carry outlaws lemon vehicle, it could work.

Licensing agencies and collectors. Many states have licensing requirements for agencies to collect the debt, but all states must leave both agencies and collectors. Occasionally, collectors, bad or agencies that violate the law was low for a while, "and then reappear under a different name. Really to cleanse the system, collectors must be licensed, if violate the FDCPA, the licenses must be suspended. If you still do, theirlicenses should be revoked, and should be prohibited from participating in the debt collection industry.