The tables, it seems, have turned. We as consumers are all too familiar with being the subjects of debt collection efforts, and now it’s the debt collectors’ turn to face some scrutiny. Not only has the controversial Patient Protection and Affordable Care Act (better known as Obamacare) implemented some new rules that require hospitals to curb unfair collection practices against patients if they want to receive their federal tax exemption, but the Consumer Financial Protection Bureau (CFPB) also published a rule yesterday giving itself the ability to oversee the nation’s largest debt collectors.
Roughly 30 million Americans have debt subject to collections, according to the CFPB, which estimates the average amount owed to be around $1,500. These statistics are worrisome both because they speak to our country’s obsession with overspending and in light of the negative repercussions of severely delinquent debt. You see, in addition to the inconvenience and stress of having debt collectors pester you, your debt burden will grow as interest continues to accrue, you’ll incur more and more credit score damage as delinquency increases, and you could eventually default and even get sued. To complicate matters, debt collectors are notorious for misleading consumers, overstepping the law, and making mistakes that cost people like you and me a lot of money.