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Consumer Financial Protection Bureau Report Outlines Abuses By Debt Collectors


The Consumer Financial Protection Bureau says millions of Americans feel threatened by aggressive debt collectors. It also says collection companies are putting personal information at risk. That's according to a new report today, and it's being released while the CFPB crafts new rules for the debt collection industry. NPR's Chris Arnold reports.

CHRIS ARNOLD, BYLINE: The CFPB gets complaints about all kinds of things - shady mortgage brokers, banks charging fees when they shouldn't be charging fees. But director Richard Cordray says then there is debt collection.

RICHARD CORDRAY: It is the most common issue that people complain about, and it's been a real active area of work for the Consumer Bureau.

ARNOLD: A bar owner in Marysville, Calif., called the Bureau to complain that she was getting 30 to 40 calls a day from a collector over a credit card debt. Other people complain collectors harassed them about bills that they don't actually owe. So Cordray says the CFPB decided to do a nationwide survey to hear from thousands of Americans.

CORDRAY: It's really the best and most comprehensive study to date of how people are actually experiencing life in debt collection, and it's not a pretty story.

ARNOLD: More than half the people claimed that debt collectors called them with bad information. Either they didn't owe the dad or the amount was wrong. One in four Americans said that they felt threatened by the calls from collectors. One of those people was a single mom in Detroit named Danesha Conley (ph). She says she lost her job and couldn't pay her car loan. And then she says collectors called her claiming to be police officers.

DANESHA CONLEY: I had one that was telling me that she was a detective, and they were coming to my house. And I was going to go to jail for car-napping.

ARNOLD: Conley says she actually got really scared that she was going to get arrested in front of her kids.

CONLEY: No debt collectors should threaten me with jail time.

ARNOLD: To crack down on abuses, CFPB in recent years has brought enforcement actions. Some collectors have been hit with a hundred million dollars in penalties, and consumers have won $300 million in restitution. And now the bureau's coming up with new regulations for debt collectors.

CORDRAY: One of the problems with the existing law is that it's 40 years old. It hasn't been updated for new technology. And it's a good opportunity for the industry itself to find improvements and for us to overhaul some of the things that are really hurting people around the country.

ARNOLD: One modern problem is identity theft. Cordray says debt collectors buy and sell databases that are full of Americans' names and Social Security numbers.

CORDRAY: They're treasure troves of personal information that can be bought for almost nothing. And for all we know, criminals are buying this and then misusing that information for identity theft and other purposes.

ARNOLD: For its part, the debt collection trade group ACA International has written to the Consumer Bureau. It's urging that the rules be precise and not overly broad and burdensome. Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.

NPR correspondent Chris Arnold is based in Boston. His reports are heard regularly on NPR's award-winning newsmagazines Morning Edition, All Things Considered, and Weekend Edition. He joined NPR in 1996 and was based in San Francisco before moving to Boston in 2001.