March 24, 2014

CFPB official emphasizes crucial nature of having accurate information in debt sales

Consumer Financial Protection Bureau Deputy Director Steven Antonakes recently spoke about how important accurate information is for completing various activities involved in debt collection, including debt sales

At the U.S. Chamber of Commerce, Antonakes noted the recent efforts the CFPB has made to properly regulate these transactions. He stated that in November, his organization asked consumers for their experiences with debt collection and provided an advanced notice of proposed rulemaking.

Antonakes also cited figures that demonstrate just how many people are impacted by debt collections. For example, after the financial crisis, an estimated 30 million Americans had debts that were past due and in collections. The past due liability currently averages about $1,500 per individual. What's more, current figures show about 10 percent of consumers have debts that are in collection.

He emphasized that consumer credit markets rely on market participants collecting debt in order to function smoothly. However, Antonakes also noted that companies responsible for this collection frequently do not have the right information, and stated that the CFPB plans to improve this situation.

"We want to ensure that collectors are seeking to recover debts from the right person in the right amounts," he said to the U.S. Chamber of Commerce. "In particular we are concerned that the accuracy of account information degrades as it is passed on from the original creditor to debt collection firms or debt buyers"

Garnet Capital has developed a 4 phase, 42 step process to ensure that debt sales adhere to best practices in today's markets. When done correctly, debt sales are an instrumental tool, and Garnet is here to help.