An industry group representing debt collectors said it was ready to work with the CFPB to overhaul rules that it agrees have not kept pace with social and technological changes, such as the use of cellphones, often untethered to a time zone, as many consumers' primary phones.
"We as an industry are not opposed to modernization, and to taking a hard look" at the rules governing collections," said Mark Schiffman, vice president of ACA International, formerly known as the American Collectors Association. "If the CFPB can take a thoughtful, balanced approach to reform, we think that's a good idea."
Debt collectors aren't the CFPB's only potential source of resistance. The agency is expected to write federal rules that will, for the first time, govern not just third-party collectors but also creditors who do their own collections. The main law governing collectors, 1978's Fair Debt Collection Practices Act, applies only to third-party collectors and companies that purchase debt.
Cordray said that since the CFPB began accepting debt-collection complaints in July and forwarding them to companies for responses, it had heard from more than 5,000 consumers. He said their complaints, which will be added Wednesday to the agency's public database, had reinforced its concerns about practices that sometimes amount to "intimidation tactics."
"We have heard, for example, that many consumers are very concerned about collectors trying to collect on debt they already paid off or that they never owed in the first place," Cordray said.
Cordray estimated that one in 10 Americans, or about 30 million people, emerged from the 2008 financial crisis with one or more debts in collection, averaging about $1,400 per person.
It's not clear how those numbers compare with debts faced before the crisis. ACA International estimates that U.S. debt collectors took in $54.8 billion in 2010, up from $51.9 billion in 2007.
Cordray said collectors often cause the most grief to those who believe the collector has "the wrong person, the wrong amount, or other wrong information."
"It is difficult to quantify the toll that it takes on consumers who do not think they have any accounts in arrears but who are still contacted, and sometimes hounded, by collectors," he said.
Cordray said misinformation can lead to harassment or damaging reports to credit bureaus.
"In some instances, consumers may end up paying amounts they do not owe," he said.