Report - Debt Collection and Debt Buying

A report by the Center for Responsible Lending on the history and current state of the debt collection by debt buying industry. An important document for those looking to understand the industry and its impact on consumers.

• Lisa Stifler and Leslie Parrish, The State of Lending in America & its Impact on U.S. Households, Center for Responsible Lending (April 2014).

State AG-CFPB Settlement with Chase Bank Over Credit Card Collections

In 2015, the CFPB, 47 state attorneys general and the District of Columbia settled with Chase Bank for $136 million over their credit card collection practices. The investigation found that Chase used robo-signed documents as evidence in lawsuits against consumers. In addition, Chase often sold accounts to other debt collecting agencies that were already discharged or inaccurate.

• Press Release, Consumer Financial Protection Bureau, CFPB, 47 States and D.C. Take Action Against JPMorgan Chase for Selling Bad Credit Card Debt and Robo-Signing Court Documents (July 8, 2015).
   
• CFPB Consent Order

CFPB Proposal to Overhaul Debt Collection Market

The Consumer Financial Protection Bureau has offered new rules to eliminate the often problematic practices carried out by the debt collection industry. The following CFPB resources includes a report detailing the industry and the scope of the proposals under consideration, including rules pertaining to collection practices.

• Press Release, Consumer Financial Protection Bureau, Consumer Financial Protection Bureau Considers Proposal to Overhaul Debt Collection Market (July 28 2016).
   
• Proposed Rulemaking Report, Consumer Financial Protection Bureau (July 28, 2016).
   
• Study of third-party debt collection operations, Consumer Financial Protection Bureau (July 2016).
   
• Stacey Cowley, Debt Collectors’ Abuses Prompt Consumer Agency to Propose New Rules, New York Times (July 28, 2016).

N.Y. Times Report on the Consumer Debt Collection

In this 2014 report, N.Y. Times reporter Jake Halpern delves into the often unknown and secretive world of the debt-buying industry. According to Halpern, the industry has seen astronomical growth.

“From 2006 to 2009, for example, the nation’s top nine debt buyers purchased almost 90 million consumer accounts with more than $140 billion in ‘face value.’ And they bought at a steep discount. On average, they paid just 4.5 cents on the dollar. These debt buyers collect what they can and then sell the remaining accounts to other buyers, and so on. Those who trade in such debt call it ‘paper.’ ”

— Jake Halpern

• Jake Halpern, Paper Boys: Inside the Dark, Labyrinthine and Extremely Lucrative World of Debt Collection, New York Times (Aug. 14, 2014). 

Minnesota AG Resource on Debt Buyers

A comprehensive resource for consumers on the debt buying industry. Created by the Minnesota Attorney General's office, the guide provides a definition of a "debt-buyer," a brief history of the debt-buying industry, and rights of consumers when pursued by debt collectors.  

• Debt Buyers Resource Guide, Minnesota Attorney General's Office (last visited Nov. 25, 2016).