AFSA Comments on Debt Collection Survey

On Aug. 3, AFSA sent a letter to the Consumer Financial Protection Bureau (CFPB) regarding its plan to survey individuals as part of the CFPB’s research on debt collection disclosures. The CFPB intends on using the information gathered as part of this research study to help assess whether it can improve the clarity of forms used during debt collection in a potential debt collection rulemaking.

The survey questions generally focus on debt collectors. AFSA’s letter commended the CFPB for keeping research on third-party debt collectors and creditors separate, “Our purpose in sending this letter is to reiterate the important distinction between creditors and debt collectors.”

AFSA went on to explain, “AFSA strongly advocates that the CFPB continue to treat creditors differently from debt collectors as it assesses collection practices. Creditors are motivated to maintain the customer relationship. They originate, service, and collect a customer’s account. Creditors benefit from a strong relationship with customers built on transparency and trust which helps to maintain a loyal customer base, as well as attract new customers. A free flow of information between creditors and customers keeps the customers informed and out of default.”

AFSA also commented on one substantive issue in the survey. The association expressed concern that the scenarios set out in the survey do not accurately reflect the purpose for which some of the questions, namely the questions related to “time-barred” or “obsolete” debt, were created.