Rules on collecting debts: Fewer calls, easier to dispute

Associated Press

NEW YORK

Consumers could no longer receive multiple calls per day from debt collectors and would have more ability to dispute their bills under proposals released Thursday to overhaul the multibillion-dollar debt-collection industry.

The new rules from the Consumer Financial Protection Bureau also would require collectors to have more documentation to prove a debt is owed, and initiate a 30-day waiting period for loans tied to someone who has recently died – halting all collection attempts from a spouse or child during that time.

Regulators estimate roughly 70 million Americans are contacted by debt collectors each year, and more Americans submit complaints to state and federal agencies about unfair or deceptive practices than any other part of the consumer financial system. These would be the biggest changes to the industry since Congress passed the Fair Debt Collections Practices Act nearly 40 years ago.

The changes, likely to face strong resistance from the industry and its allies in Washington, would affect only third-party debt collectors.

The agency has yet to propose rules that would affect first-party debt-collection practices, such as credit-card companies and payday lenders.