Federal Trade Commission Issues Report to the Consumer Financial Protection Bureau of its Enforcement of the Fair Debt Collection Practices Act

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EDITOR’S NOTE:  This post was guest-authored by Christopher J. Somma, an attorney in Goodwin Procter’s Consumer Financial Services Litigation Practice.  Mr. Somma represents clients in distressed loan workouts, forbearances, restructurings, commercial and residential foreclosures, UCC foreclosure sales, distressed portfolio and asset sales, property disposition, creditors’ rights and insolvency, origination of commercial real estate loans, asset-based and structured-based finance, note and mortgage sales and other issues surrounding OREOs.

FTC LogoOn February 12, 2016, the Federal Trade Commission (FTC) issued a report to the Consumer Financial Protection Bureau regarding its efforts to implement the Fair Debt Collection Practices Act.  The full report can be reviewed here.

According to the report, in 2015, the Commission:

  • coordinated the first federal-state-local enforcement initiative targeting deceptive and abusive debt collection practices, an effort that has so far resulted in over 70 law enforcement partners bringing over 130 actions;
  • prosecuted a sweep of cases against collectors that used unlawful text messages to collect debts;
  • filed 12 new cases against 52 new defendants (a record number of debt collection enforcement actions for the FTC in a year);
  • resolved nine cases and obtained nearly $94 million in judgments;
  • banned 30 companies and individuals that engaged in serious and repeated violations of law from ever working in debt collection again;
  • published a list of every company and individual banned by federal court order from engaging in debt collection activities;
  • filed three amicus briefs, two of them jointly with the CFPB, on key debt collection issues; and
  • hosted three Debt Collection Dialogues, to promote a more robust exchange of information between the debt collection industry and the state and federal governmental agencies that regulate their conduct.

As shown, the FTC has continued its aggressive law enforcement activities and public outreach in 2015 and shows no sign of slowing down in 2016.

The Dodd-Frank Act directed the CFPB to report to Congress on the federal government’s implementation and administration of the Fair Debt Collection Practices Act.  Before the enactment of the Dodd-Frank Act, 15 U.S.C. § 1692m required the FTC to report directly to Congress on its enforcement of the Fair Debt Collection Practices Act which it did from 1977 to 2011.

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