Cracking Down On Unfair And Abusive Collection Practices

Federal and state regulators are actively tightening rules and enforcement against unfair and abusive debt collection and “junk fee” practices, especially through the CFPB and FTC. This crackdown targets both illegal collection tactics (like threats and harassment) and fee-based abuses in credit cards, bank accounts, rentals, and other consumer finance products.​

What counts as unfair or abusive

Under the Fair Debt Collection Practices Act (FDCPA) and similar state laws, collectors may not use deceptive, unfair, or abusive tactics to collect debts. Prohibited conduct includes repeated or late‑night calls, threats of arrest or violence, false claims about what you owe, or telling your employer or others about your debt.​

The Consumer Financial Protection Act also bans “unfair, deceptive, or abusive acts or practices” (UDAAP), which regulators increasingly use to attack junk fees, phantom debts, and other schemes that take advantage of consumers’ lack of understanding or leverage.​

Recent enforcement crackdowns

Regulators have launched coordinated initiatives against abusive collectors, including “Operation Corrupt Collector,” a nationwide effort targeting phantom debt and threats, leading to lawsuits, industry bans, and large monetary judgments. The FTC maintains a public list of collectors it has banned from the industry and continues to bring cases where companies coerce people into paying debts they do not owe.​

The CFPB and FTC also report annually to Congress on debt collection enforcement, highlighting actions against companies that misrepresent debts, misuse confessions of judgment, or engage in unlawful “debt parking” on credit reports.​

Junk fees and abusive charges

The Biden administration has elevated junk fee enforcement, using CFPB and FTC authority to limit abusive fees in banking, credit cards, auto loans, rental housing, and more. Examples include efforts to eliminate or cap non‑sufficient funds fees and credit card late fees, which regulators characterize as abusive when they bear little relationship to cost and disproportionately burden low‑income consumers.​

The CFPB has also issued guidance against payment “convenience” fees imposed by collectors when those fees are not authorized by contract or law, treating them as illegal junk fees in the collection context.​

How this protects consumers

Key protections now include limits on how and when collectors can contact you, the right to demand written validation of a debt, and the ability to stop certain types of communications such as calls or texts. Regulators have also pushed to stop surprise credit reporting of alleged debts by requiring collectors to notify consumers before furnishing negative information.​

In some cases, enforcement actions result in bans that permanently remove abusive collectors from the industry and secure refunds or debt relief for affected consumers. These efforts, combined with junk fee rules, aim to reduce both harassment and unexpected costs tied to debts across the financial system.​

Agencies and laws involved

The CFPB focuses on consumer financial markets and enforces both the FDCPA (for certain entities) and its broader UDAAP authority against unfair, deceptive, or abusive practices. The FTC enforces the FDCPA for most third‑party collectors and uses its own Act to stop unfair or deceptive collection practices, often coordinating with state attorneys general.​

State regulators and legislators also use their own unfair and deceptive practices laws to supplement federal efforts and expand protections beyond traditional third‑party debt collectors. Together, these overlapping tools form the backbone of the current crackdown on unfair and abusive collection practices.​