On July 10, 2013, the Consumer Financial Protection Bureau (“CFPB”), under its authority granted to it by the Dodd-Frank Act, issued two bulletins discussing unfair, deceptive or abusive acts or practices in the collection of consumer debts. Under these bulletins, the CFPB made it clear that, unlike the Fair Debt Collection Practices Act, lenders who collect their own debts can be subject to liability if they engage in “unfair acts or practices.” The CFPB issued examples of what it perceived to be unfair, deceptive and/or abusive acts or practices, such as attempting to collect a debt or interest, fees, and charges not expressly authorized by the agreement or permitted by law, failing to post payments timely or properly, taking possession of property without the legal right to do so, revealing the consumer’s debt to the consumer’s employer or co-workers without the consumer’s consent, falsely representing the character, amount or legal status of the debt, misrepresenting a debt collection communication as from an attorney or from a government source, misrepresenting and threatening any action that the lender does not have the authority to pursue, including representations about lawsuits or criminal prosecution.
In addition, at the same time, the CFPB issued a second bulletin concerning deceptive practices regarding statements about consumer credit reports or credit scores made in connection with attempts to collect debts. According to this CFPB bulletin, it is a deceptive or abusive practice to state that paying a debt will impact on a person’s credit report when the debt is unable to be reported because of the age of the debt. It is also deceptive to state that paying a debt will improve a person’s credit score or creditworthiness since multiple factors go into determining a consumer’s credit score.