CFPB Protection – How the agency is protecting you.
Have you received a threatening call or letter from a debt collector for a debt that you’ve paid or that wasn’t yours in the first place? If so, you aren’t alone. Debt collections are covered by a patchwork of laws that have typically been poorly enforced. Illegal debt collection practices led to over 199,000 complaints to the FTC in 2012 and over $56 million in penalties since 2010. But, even this is a drop in the bucket compared to the levels of abuse that exist. For this reason, the Consumer Financial Protection Bureau was formed.
What is the Consumer Financial Protection Bureau?
In the 2000s, expanding access to credit and elimination of many consumer protections left millions of Americans with complicated debts that they did not understand. The CFPB was created by Congress in 2010 as a response to the rampant abuses in the credit and debt collection industries. Its establishment was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The organization’s first director, Rich Cordray, was appointed in 2012. The organization provides three essential services: educating consumers; enforcing consumer finance laws; and studying consumer behavior, financial markets and financial service providers.
Between loosened credit protections and the 2007 downturn, more and more people are turning to credit to make ends meet. But, many people do not understand the drawbacks of certain types of credit or their rights under the law. The CFPB has a section of their site that contains scores of credit tips that can help consumers learn more about the pros and cons of different kinds of credit and what rights they have when dealing with a debt. Consumers can learn more about credit repair, effective debt management and what makes up their credit scores.
The CFPB oversees the activities of the 175 largest financial companies and exact penalties when those companies break the law. The CFPB website has sections for both individual consumers and whistleblowers who have seen illegal behavior to submit complaints. The organization also enforces laws against discrimination and other unfair consumer finance practices.
If a debt that you have paid or that did not belong to you in the first place is threatening your credit score, a complaint with the CFPB can help you get a resolution. They will forward your complaint to the offending company and work to get a response. They handle debts that include vehicle loans, payday loans, credit cards, mortgages and others. These complaints can be a good first step in eliminating harassing calls and beginning to repair credit.
Consumers and the economy suffered a shocking blow during the 2007 financial crisis. Home values dropped, people lost their savings, jobs were eliminated and credit become impossible to find. To avoid future crises, the CFPB studies the economy to learn more about consumer behavior and monitor the financial markets to identify new risks to consumers and the economy. Through this and its roles educating consumers and protecting against unfair or dangerous practices, the CFPB can help individuals and help support a stronger economy.
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