Consumers obviously need more protection and fortunately, they're about to get it. Under the Dodd-Frank Wall Street reform act, the Consumer Financial Protection Bureau has the power to regulate the "larger participants" across a broad range of financial industries --- and debt collection is one of them. Although the agency is still hammering out its internal rules for how to investigate debt collectors ( while facing formidable political opposition from the right), we know it will both conduct regular examinations of the biggest companies, and respond to major violations of law by taking those responsible to court.
We've already seen what the CFPB can do to clean up unscrupulous practices. Its enforcement actions like this one, this one and that one against various credit card companies over their questionable practices have put some $425 million back into victimized consumers' pockets --- and have put the credit card industry on notice that deception in the sale of financial products will no longer be tolerated.
Now it's time for the consumer bureau to bring the same no-nonsense legal jiu-jitsu to the far more worrisome and nefarious world of debt collection. The Consumer Financial Protection Bureau is probably the best hope that heroes like Michael Collier have for defending themselves against debt collector predation and reforming an industry that routinely crosses into illegality. Frankly, I'm surprised President Obama hasn't made this into a political issue, given Governor Romney's and other Republicans' desire to dismantle the CFPB.
The President should argue that rather than trying to repeal a law passed with resounding majorities in both houses of Congress and destroy an agency supported by 66 percent of Americans, Washington must join with responsible financial companies to create a level playing field for all consumers and corporations, and assure once and for all debt collectors never again abuse innocent citizens or wish death upon our nation's heroes. It's a message that would certainly resonate with me, and many of you I trust, as well.
UPDATE: On October 19, Gurstel Chargo released a statement claiming that the firm was provided a cell phone number by Collier's attorney, and that, "A thorough review of the Gurstel Chargo phone database reveals that no call from Gurstel Chargo to the number provided by plaintiffs' attorney was made at any time from the hearing date through the filing of this lawsuit."
Further, Gurstel Chargo has claimed that the garnishment of funds from Collier's account was in fact legal. "Only upon documentation being provided by the consumer, Mr. Collier, indicating the funds in his account were exempt, did it become proper to extinguish the garnishment. Gurstel Chargo did not and could not have known the funds were exempt in the absence of this documentation."
Adam Levin is chairman and cofounder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.