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New consumer protection agency to open doors

The Better Business Bureau in Ohio, like in BBB offices across the country, regularly receives complaints from consumers about unfair debt collection practices. The Federal Trade Commission and attorney general offices across the country also field numerous complaints. Laws exist to attempt to control the tactics creditors use in their efforts to attempt to collect on debt. Next month a new federal agency, the Consumer Financial Protection Bureau, will open its doors to join the federal efforts of the Federal Trade Commission in policing debt collection practices.

Federal laws and Ohio laws are in place to protect Cincinnati residents and consumers across the country from creditor harassment. Nonetheless, the FTC received 140,036 complaints about the tactics debt collectors used in 2010. That is a 17 percent increase in the number of complaints the agency fielded in 2009.

The Consumer Financial Protection Bureau will have the authority to update debt collection regulations. Part of the difficulty in recent years with the collections industry is that laws have not always kept up with the times. Collection agencies use social media, e-mail and cell phones in their efforts to collect debts.

Current laws protect consumers in a number of ways:

Debt collectors are only allowed to call between 8 a.m. and 9 p.m.

Debt collectors are prohibited from calling you at work if you ask them not to

Debt collectors must send a letter stating the amount of a debt and to whom it is owed within five days of contacting you

You can tell the debt collector to stop contact with you by a certified letter

The federal bankruptcy code also provides protection for consumers from creditor harassment. Filing for bankruptcy places an automatic stay on all collections activities. Once the petition is filed with the bankruptcy court, a collector can only resume collection activities after proving to the bankruptcy court a valid reason justifies taking the debt out of the bankruptcy proceeding. Bill collectors need permission of the bankruptcy court to resume collections.

An experienced Cincinnati bankruptcy attorney can assess an individual situation and help to answer questions an Ohio resident has available to them when bills mount to the point of financial distress.

Source: WTOL 11, "Consumers may soon have greater protection against collectors," Matt Wright 13 Jun 2011

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