The enforcement of debt collection rules is primarily handled by the FTC, although state agencies like the attorney general's office or the Department of Justice may enforce local laws and regulations concerning debt collection. In Texas, for example, the attorney general's office may be able to act against debt collection agencies in the public interest, while Arkansas has a State Board of Collection Agencies that licenses any agency contacting debtors in the state.
Who Enforces Debt Collection Laws? The Federal Trade Commission is responsible for enforcing the Fair Debt Collection Practices Act (FDCPA) on most third-party debt collectors (including debt collection agencies, attorneys and others who collect debts originally owed to another business, such as a lender). However, other federal agencies may be responsible for enforcing the debt collection legislation under their own areas of responsibility.
The agencies are the: • Department of Agriculture • Department of Transportation • Federal Deposit Insurance Corporation • Federal Reserve Board • National Credit Union Administration • Office of the Comptroller of the Currency • Office of Thrift Supervision.
If you contact one of these agencies with a complaint covered by the FDCPA, they may refer you to the FTC.
Debt Collection Investigation and Enforcement The FTC uses consumer complaints to select debt collectors needing investigation. If the FTC finds that a debt collection agency has broken the FDCPA and violated consumer rights, then the FTC may sue the agency directly for injunctive and ancillary relief, restitution for consumers and to recover inappropriately received funds from the agency.
Alternatively, the FTC may request that the Department of Justice sue the agency on the FTC's behalf to secure monetary relief, a civil penalty and to prevent further violations of the FDCPA.
The FTC attempts to deter violations by suing for large amounts of relief and by suing individuals within a collection agency as well as the agency itself, among other methods.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 The Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB), which as of July of 2011 assumes partial responsibility for enforcing the FDCPA under some circumstances, particularly when a depository institution has over $10 billion in assets. The CFPB will study consumer arbitration and report to Congress on FDCPA enforcement annually.
The FTC will still enforce debt collection law, but the CFPB will collect complaints, educate consumers, set debt collection rules and guide collectors on compliance with the law, among other responsibilities. The CFPB and FTC attempt to eliminate common debt collection myths and misconceptions to help consumers better prepare for collection situations.