(NNPA)—With 19 of the nation’s banks annually selling $37 billion in charged-off debts, the absence of clear guidelines for banks and debt collectors has led to many consumers facing lawsuits, harassing telephone calls and threats over debts that they may not even owe. Even worse, debt collectors have coerced or sued the wrong people, overstated the amount, or even collected illegitimate debts.
Now, thanks in part to the efforts of advocates, a federal regulator has taken an important first-step towards holding banks accountable for the businesses they sell debts to and the threshold information that must now accompany those sales.
On Aug. 4, the Office of the Comptroller of the Currency issued guidelines that 1,729 national banks and federal savings associations must now observe. As of June 30, these institutions collectively held $7.76 trillion in assets.
According to the OCC, “Banks that engage in debt sales should do so in a safe and sound manner and in compliance with applicable laws—including consumer protection laws…Banks should be cognizant of the potential for fraud, human error, and systems failures when selling debt to debt buyers.”