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Two Changes to Debt Collection from the Truth in Lending Act

In previous blog posts, we have established the need for legislative change in our industry. Laws have become outdated as a result of the revolution in communications that we have witnessed over the past decade. As a result, the leadership in our industry has produced a Blueprint for Change.

The plan includes updates to the Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA) and Truth in Lending Act (TILA). A few of the points of the Blueprint include:

  • Collectors of Credit Card Debt – The Blueprint calls for changes to the validation notice to include the name of the original creditor and to provide an itemization of the fees and interest applied by a collector after it is placed for collection or by a debt buyer after it is acquired.
  • Amending TILA to Improve Debt Documentation – Requiring that original creditors maintain consumer account information for no less than seven years from the date of charge-off, which is consistent with the amount of time a debt can be reported on a consumer’s credit report.

These changes will help collectors provide documentation to consumers, allowing a more responsive process regarding their disputes. The information includes the amount of the debt, to whom the debt is owed, or the party responsible for paying the debt. The flow of data created by updating these laws is genuinely beneficial to all parties involved.