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Federal consumer watchdogs have day at the ‘Beach’
Consumer advocates gathered to exchange information about debt related topics.
Consumer advocates, collection industry representatives, state and federal regulators and academics gathered at California State University, Long Beach on Oct. 23 to exchange information about how debt collection and credit reporting issues affect Latino consumers, especially those with limited English proficiency.
Throughout the day, panelists mentioned several debt and credit-related problems experienced by Latinos. One panelist mentioned that Latinos are often hounded by collections related to affinity fraud (such as purchases pitched on Spanish-language infomercials or as part of multilevel marketing schemes) rather than by traditional credit card or auto loan collections. Panelists raised other issues: Latino consumers' tendency to believe that they owe a debt, when they may in fact have legal defenses to the debt; not understanding that debt can change hands several times; problems related to faulty translations of consumer contracts; needing help with such tasks as checking a credit report and disputing report errors; and collection agencies that illegally threaten arrest and deportation.
During one session, panelists talked about the importance of communicating with Spanish-speaking consumers. Collection industry representatives on the panel said that they communicate with consumers in Spanish when they know or determine that the consumer is a Spanish speaker. One industry representative, whose company hires third-party collectors, explained that his company will take back the file of a Spanish-speaking consumer if the subcontractor is unable to provide Spanish-speaking collectors.
One idea that was discussed during the session is whether the Consumer Financial Protection Bureau (CFPB) should mandate a centralized repository to hold documentation about the debt from origination through payoff, including information about its subsequent purchase by debt buyers. Some consumer advocates and industry speakers agreed with the idea, but it has been on the table for many months without earning widespread consensus in comments submitted to the CFPB’s Advance Notice of Rulemaking on debt collection issues that closed earlier this year.
In another session, as part of a broader discussion on access to justice, panelists discussed the high cost of providing Spanish interpreters in court. Courts in Colorado and New Mexico were mentioned as providing significant access to Spanish interpreters. California’s five-year court access plan and related funding issues were also discussed. When discussing Spanish-language videos created by courts, panelists agreed that not all limited-English speakers use the Internet. One panelist suggested that the CFPB use funds recovered in a recent enforcement action to pay for California’s language access program.
Another problem discussed at length was the difficulty that Latino consumers and others can experience when they try to obtain their annual free copy of a credit report. One panelist described problems seen among clients of a law school legal clinic, including difficulty answering security questions, problems related to spelling of names (e.g., Cortes vs. Cortez) and order of names (e.g., maiden name before husband’s last name, etc.). In response, a speaker from the credit reporting industry talked about the importance for credit bureaus to avoid giving a credit report to the wrong person. He noted that a consumer who is denied a report can call or write to request the report.
The day closed with a session on best practices for educating consumers about debt collection. Some of the ideas discussed may sound familiar to Consumer Action INSIDER readers. These included having material on websites available in Spanish; collaboration with other agencies; working with in-language media; reaching consumers early, even before they get to high school; and recognizing that Latino consumers are not monolithic, which might mean, for example, that a website is not the right tool for everyone. Some specific examples of best practices include members of ACA International, a debt collection industry association, speaking at schools about credit and debt management; the CFPB making information about new remittance rules available in consular offices; and referring consumers to the Consumer Reports en Español website.
As if anticipating the call to continue making consumer information available in Spanish, the host agencies FTC and CFPB did not disappoint. Both announced new tools for Latino consumers at the event.
The CFPB now has Spanish instructions for sending the debt collection “action letters” previously posted on their site.
For its part, the FTC unveiled new fotonovelas—picture books—including one based on debt collection complaints received from Spanish-speaking consumers.
As for a suggestion that the federal agencies write new rules to prohibit collectors from making threats related to a consumer's immigration status, no surprise announcement was made...but stay tuned.
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