Consumers who believe they're being unfairly targeted, harassed, threatened or otherwise mistreated by unscrupulous debt collectors have a new champion.
The Consumer Financial Protection Bureau -- the consumer watchdog agency launched two years ago in the wake of the financial crisis -- last month began taking complaints about illegal debt collection practices.
Although many collection firms follow the rules and treat people fairly, "Consumers need options to help them secure fair and respectful treatment from those debt collectors that fail to abide by the law," bureau director Richard Cordray said in announcing the move.
The bureau said there were some 4,500 debt collection firms in the U.S. Their practices have long been a source of complaints to law enforcement and other agencies nationwide.
Last year, as in other recent years, debt collection complaints exceeded every category except for identity theft, according to data from the Federal Trade Commission. In 2012 there were nearly 200,000 debt collection complaints, ranging from being harassed by repeated calls and threats of violence, to legal actions against consumers for debts they didn't owe.
The consumer protection bureau will accept collection complaints related to any consumer debt, including credit card bills, mortgages, auto loans, medical bills and student loans.
The bureau forwards complaints to the collection agency involved, which then has 15 days to respond. The bureau expects all but the most complicated complaints to be closed in 60 days. Consumers receive email updates and can log in at the bureau's website to track the status of their complaint.
In addition to launching the complaint resolution effort, the bureau developed five form letters that consumers can use to correspond with debt collectors. The letters were designed to help people get more information about claims against them and protect themselves from illegal collection efforts.
For example, one letter states that the consumer is disputing the charges until the collector answers specific questions about what is owed. Another letter tells the collector how the consumer would like to be contacted.
The letters are available at www.consumerfinance.gov/blog/debtcollection.
As of Jan. 1, the protection bureau assumed authority for supervising the largest debt collection firms, which account for some 60 percent of the industry's consumer debt collection receipts.
The bureau last month issued a bulletin warning debt collectors against illegal practices and potentially deceptive statements, such as telling consumers that paying a debt would improve their credit score.
Some illegal practices include threats of harm, profane language and repeatedly using the phone to annoy someone. Among other things, debt collectors also are prohibited from saying someone will be arrested if the debt isn't paid, falsely claiming they are attorneys or misrepresenting the amount of the debt.
When the bureau started up two years ago, it began taking complaints about credit cards. Since then, it has added complaints about mortgages, bank accounts and services, private student loans, consumer loans, credit reporting and money transfers.
Consumers can submit complaints online at www.consumerfinance.gov/complaint/. Complaints also are accepted toll-free at 855-411-2372.
More information about illegal debt collection practices is available from the Consumer Financial Protection Bureau at www.consumerfinance.gov and from the Federal Trade Commission at www.consumer.ftc.gov/articles/0149-debt-collection.
Patricia Sabatini: firstname.lastname@example.org or 412-263-3066.