- Category: Widget
- Published on Tuesday, 02 September 2014 16:04
- Written by Isaac
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Feds Put Brakes To Harsh Debt Collections
Staten Island business bank cites crackdown on nonbank methods
STATEN ISLAND, N.Y. -- New supervisory oversight by the federal Consumer Financial Protection Bureau (CFPB) has resulted in examiners' findings of what the bureau deems illegal activities.
Victory State Bank, Staten Island's only community-based commercial bank, notes that the bureau uncovered many systemic flaws in compliance management systems at the companies in question. These exposed consumers to risky practices, the CFPB said.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the CFPB has authority to supervise certain nonbank institutions and establishments and has issued rules to supervise the larger debt-collection entities.
Regarding debt-collection, the bureau said practices have long been a source of frustration for many consumers. The practices have generated a heavy volume of consumer complaints at all levels of government, including at the CFPB. It is estimated that there are more than 4,500 debt collection firms in the United States. The problems that CFPB examiners found in this market include:
- Debt collectors intentionally and illegally misleading consumers about litigation: Examiners found that debt collectors violated the Fair Debt Collection Practices Act (FDCPA) by filing lawsuits, which implied that they intended to prove their claims, when they had no such plans. The collectors typically dismissed the suits if consumers answered them because they were then unable to produce the documents to support their claims.
- Debt collectors making excessive, illegal calls to consumers: Examiners found that one debt collector had made approximately 17,000 calls to consumers outside of the appropriate times established by the FDCPA. That company further violated the law by repeatedly contacting more than 1,000 consumers as often as 20 times within two days.
- Debt collectors failing to investigate consumer credit report disputes: Debt collectors often furnish information to consumer reporting agencies, which use it when compiling consumers’ credit reports. Debt collectors generally must investigate when a consumer disputes information they have sent to a consumer reporting agency. Examiners found evidence that a debt collector was deleting disputed accounts rather than investigating such disputes, and examiners directed this collector to investigate disputes it receives regarding information it furnished.
About Victory State Bank
VSB Bancorp, Inc. (OTCQB: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online www.VictoryStateBank.com.