Consumer debt jumped more than $1 trillion from the beginning to the end of 2021, according to a report from the Consumer Financial Protection Bureau (CFPB).
“Over the course of 2021, consumer debt rose rapidly, from $14.33 trillion in the first quarter to a new high of $15.58 trillion in the last quarter of 2021,” the report said.
The report said the spike was in large part because of an increase in credit card and auto loan debt.
The Federal Trade Commission (FTC) also said it issued more than $4.86 million in refunds to victims of unlawful debt collectors last year.
The FTC warned that harassment, threats or giving out misleading information to consumers about their outstanding debt that is past due is illegal.
The FTC posted several calls as examples of predatory practices from debt collectors.
“If you don’t pay, we’ll have you arrested and deported,” the FTC said in one example. “This is your final warning, or we’ll contact your employer and make them pay,” said another example.
Last year, the House passed the Comprehensive Debt Collection Improvement Act aimed at giving more protections to consumers with debt and to restrict debt collection activities.
According to the legislation, the bill prohibits “a debt collector from representing to a service member that failure to cooperate with a debt collector will result in a reduction of rank or similar action, limits a debt collector’s electronic communications with a debtor without the debtor’s permission, and requires a debt collector to provide advance notice to a consumer of the intent to take legal action to collect a debt.”
“None of this is to say people who owe lawful debts shouldn’t pay them,” said Rep. Maxine Waters (D-CA), the sponsor of the bill. “But all Americans deserve to be free from harassment, undue pressure tactics, bullying, false information, threats, coercion and other bad practices.”
That measure has not yet been taken up in the Senate.
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