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Debt Collection Industry Readies Fight Over Consumer Financial Protection Agency

December 18, 2009

As Anaheim fair debt collection attorneys, we generally find ourselves supporting any financial legislation that the collections industry opposes. That's why we were pleased, in a way, to see an article about the debt collection industry's vigorous opposition to new consumer protection legislation. Industry publication InsideARM reported Dec. 16 that ACA International, "the Association of Credit and Collection Professionals," strongly opposes a bill passed in the House of Representatives last week. The Wall Street Reform and Consumer Protection Act includes multiple provisions that the association believes will burden its industry, most significantly the creation of a Consumer Financial Protection Agency. Because the House vote is over, however, ACA International said it planned to take the fight to the Senate, which is expected to address the issue next year.

The CFPA, a project proposed by President Obama as part of comprehensive financial reform, would collect most federal consumer-protection duties under one agency that has serious power. Among the provisions ACA International didn't like is a proposal to assess fees from regulated companies to pay for enforcement without tapping into the federal treasury. The article said the association prefers funding from the treasury, funded by tax dollars. Similarly, ACA International opposed the proposed agency's power to charge fines against companies found to have violated the law -- up to $5,000 a day in most cases and up to $1 million a day in cases of willful and intentional violation. Non-financial provisions the association didn't like included a proposal for the CFPA to enforce laws on behalf of the FTC; its ability to set restrictions on how employees are compensated; and a three-year deadline for taking action after a violation becomes known.

Not surprisingly, our Riverside County debt collection abuse lawyers are in favor of these provisions. In fact, we believe you don't need to be involved in the consumer credit industry to see the virtues of many proposals. Funding regulation by assessing fees on the regulated, rather than using taxpayer dollars, is an almost surefire winner with voters. Fines assessed for wrongdoing can also add to the agency's budget without cost to taxpayers. ACA International claims these fines are too high, but the low fines assessed for companies violating the Fair Debt Collection Practices Act, and its routine violations, show that higher fines are an important deterrent. A three-year deadline for enforcement lawsuits is actually a standard in many states, where statutes of limitations generally run from one to five years. And giving the CFPA the power to control employee compensation structures -- not dollar amounts -- allows it to stop practices that encourage abuse.

Fortunately, even if this legislation is eviscerated, consumers are already protected by state and federal laws outlining what debt collectors may and may not do. Howard Law LLP helps people targeted by collection agencies enforce their right to be free of abuse and harassment by companies trying to make an unfair buck. Under the federal FDCPA, California's Rosenthal FDCPA and similar state laws, debt collectors may not lie, threaten consumers with actions they can't or won't carry out, use abusive or obscene language, call at work after a request not to, contact third parties and more. They do these things anyway because far too many consumers don't know they have these rights, which allows them to get away with clearly illegal behavior. Our Carson fair debt collection attorneys help clients enforce their rights and collect financial damages of up to $1,000 per violation, along with all of the attorney fees and court costs from bringing the suit.

If you're being harassed by a collection agency that you believe is breaking the law, Howard Law can help. To set up a free, confidential evaluation of your case, please contact us online or call 1-800-872-5925 today.