The Fair Debt Collection Practices Act applies to third party debt
collectors, that is, NOT the holder/owner of the debt, unless the
debt buyer acquired the debt AFTER it was in default.
The times, they are a changin’.
The FDCPA is great, but, the debt harassment abuses it covers are legal
if done by the original creditor.
So, if the bank hires a collection agency, that collection agency is bound by the FDCPA.
If the bank just uses its own employees for debt harassment of its customers, the FDCPA does NOT apply.
There may be state laws that apply, but there are no debt harassment protection laws in Michigan.
New York state passed new legislation, and the Consumer Finance Protection Bureau is to release new rules
in April of 2015.
The banks trot out the same tired argument, hey, don’t regulate us, we do this on our own anyway.
Yeah, right. Same lie they told about mortgage modifications.
Banks and their advisers also point out that many players in the industry have voluntarily adopted the requirements of the act. But it may be a futile effort to stop regulators from making those rules official for lenders, said Robert Foehl, general counsel at ACA International, a trade group for debt collectors.
“It’s abundantly clear that the CFPB will hold first-party collectors to very similar, if not the exact same standards, as third-party debt-collection companies,” Foehl said.
Instead, banks should be preparing for the inevitable, said Caren Enloe, an attorney at Morris, Manning & Martin who represents banks and debt collectors.
“A lot of big banks have in-house collections departments, and that’s going to be a huge issue,” Enloe said. “Banks have got to be more vigilant, or continue to be vigilant, and know that this is coming.”
(from story on Big Banks Fear Crackdown On In-House Debt Collection)
This would be great for consumers. There is no justification for anyone using the tactics prohibited by the FDCPA.
You can still file bankruptcy to discharge debt and stop debt collector harassment, but, even if you do so, you can exempt that right you have to sue debt collectors for illegal harassment.