Federal, state, and local regulators and enforcement agencies
announced a national initiative targeting debt collectors branded
Operation Collection Protection on November 4, 2015. The
enforcement effort has so far resulted in 115 law enforcement
actions against debt collectors engaged in allegedly illegal
practices, brought by over 70 law enforcement agencies, including
the Federal Trade Commission (FTC), Consumer Financial Protection
Bureau (CFPB), Department of Justice, and state attorneys general.
All companies that seek payment from consumers for accounts
receivable should take note, because of the heightened scrutiny of
debt collection and debt buying activities.
The FTC's press conference included statements by FTC
Chairwoman Edith Ramirez, with Illinois Attorney General Lisa
Madigan and Minnesota Commerce Commissioner Mike Rothman. During
the press conference, the regulators emphasized why debt collection
is such a high priority: (1) the sheer amount of debt U.S.
consumers hold—$2.5 trillion as of 2010—means a
significant portion of the population is impacted on a daily basis;
(2) debt collection plays a critical role in a functioning credit
economy; and (3) debt collection perennially garners the most
consumer complaints among all business practices.
While the press conference, and the four new actions announced,
focused on practices the officials described as particularly
problematic—harassment and abuse of consumers and the
collection of so-called phantom and zombie debt—the message
was clearly broader: illegal debt collection practices are a top
priority for consumer protection watchdogs around the country,
which will continue to pool and leverage their considerable
resources to stamp out improprieties.
The message sent by Operation Collection Protection complements
recent CFPB enforcement, supervisory, and rulemaking efforts focused on
the debt collection industry, including first-party creditors and billing
services, and on the intersection of data furnishing and debt
collection. In addition, the CFPB continues to work on
developing proposed rules for debt collection following publication
of its advanced notice of proposed
rulemaking in November 2013.
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