How seriously should debt collection agencies take the Consumer Financial Protection Bureau’s crackdown on Unfair, Deceptive and Abusive Acts or Practices (UDAAP)? On one hand, the Bureau recently took action against Nevada collection company Delbert Services Corporation as part of its first action against an online loan service provider; the CFPB alleged that Delbert illegally debited consumer checking accounts for loans that were void, along with other deceptive and abusive practices. But on the other hand, as harsh as the consequences may be for Delbert, the fact remains that CFPB bulletins and enforcement actions aren’t the same thing as the rule of law.

But at December’s insideCompliance webinar covering UDAAP compliance issues, John Bedard, managing partner at Bedard Law Group, said the debt collection industry should pay attention to the very public nature of the CFPB’s moves. They may pave the way for the Bureau to develop industry laws that mimic these orders, especially now that the CFPB is soliciting public comments for its Advance Notice of Proposed Rulemaking. If the CFPB creates a rule for one company, chances are they’re going to eventually try to apply it to all companies.

“I think these bulletins and these consent decrees are very, very valuable, because it’s the government’s way of telling the industry what it expects,” Bedard said. “And frankly, it does it in a way that circumvents the rulemaking process because they just published this bulletin. This is what we think. And we’re not creating a rule, we’re not doing anything. But we’re letting you know, this is what we think. And I think that’s valuable.”

Get more answers from John Bedard to the industry’s most pressing UDAAP questions with our new report, Compliance Focus: UDAAP. We’ve compiled the key points and questions from our insideCompliance webinar into one user-friendly guide.

You’ll Learn:

  • How the CFPB regards common debt collection practices as unfair, deceptive or abusive
  • How UDAAP intersects with debt collection phone calls
  • What the next steps are for government enforcement of UDAAP

This is a resource no collector should be without!


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