Debt collection practices borrowers should watch for now

Borrowers are seeing a sharp rise in abusive and fraudulent collection activity, especially by phone and text, even as formal federal oversight is in flux. The biggest risks now are harassment, fake debts, illegal threats, and misuse of medical and other sensitive debts to coerce payment.

High‑risk behaviors to watch for

• Harassing call patterns: repeated calls in a short period, calls very early or late, and aggressive tone are driving a surge in complaints, with more than 400,000 Americans reporting debt‑collection calls in 2025 and about half describing them as harassing, fraudulent, or threatening.

• False or inflated balances: regulators continue to find collectors trying to recover amounts not actually owed, including fees or interest that are not permitted by contract or law.

• Collecting non‑existent or time‑barred debts: federal and state agencies have brought cases where firms tried to collect debts that did not exist or were beyond the statute of limitations, sometimes extracting millions from consumers.

• Impersonation and misrepresentation: collectors have pretended to be attorneys, law enforcement, or government officials, or implied that not paying is a crime, all of which are prohibited deceptive practices.

Red flags in communications

• Threats of arrest, jail, or criminal charges: any threat of arrest or criminal prosecution over typical consumer debts (credit cards, auto loans, medical bills) is a red flag and should be reported.

• Pressure to pay immediately by wire, gift card, or crypto: scammers often demand unusual payment methods to make funds hard to trace or recover.

• Refusal to validate the debt: legitimate collectors must, on request, provide information about the original creditor and amount and give you a chance to dispute; refusal is a warning sign.

• Telling you not to respond to a lawsuit: guidance flags any suggestion that a consumer ignore court papers or deadlines as deceptive.​

Medical debt and sensitive obligations

• Inaccurate or legally invalid medical bills: the CFPB has clarified that collecting on medical debts that are inaccurate, already paid, or not legally owed can violate federal law, and has focused supervision on these practices.

• Using medical bills to coerce payment: a finalized rule now bans medical bills from credit reports used by lenders and prohibits lenders from using medical debt information for credit decisions, reducing the leverage collectors have by threatening credit damage.​

• Debts barred by other laws: some medical and care‑related obligations (for example under certain workers’ compensation rules or nursing home laws) may not be legally collectible from the patient or family, yet collectors still attempt to pursue them.​

What’s changing in enforcement

• CFPB enforcement capacity has shrunk sharply, with GAO noting dismissal of many pending cases and plans to reduce enforcement and supervision staffing by around 80–90 percent during 2025.​

• Some remaining debt‑collection cases and other enforcement matters are being shifted to the Department of Justice as the CFPB manages funding and staffing constraints, which may slow new cases even as existing matters are transitioned.​

• At the same time, the Bureau continues to issue annual FDCPA reports, highlight harassment and misrepresentation patterns, and review its “larger participant” rule to determine which collectors remain under direct federal supervision.

Practical protection steps

• Demand written validation: ask for a written notice showing the creditor, amount, and your rights; do not pay based only on a phone call or text.

• Check with the original creditor: contact the lender or provider directly to confirm whether the debt is real, the balance is correct, and which agency, if any, is authorized to collect.​

• Document and report abuse: keep logs of calls, voicemails, and messages, then submit complaints to the FTC and CFPB; complaints about collection calls jumped more than 200 percent from 2024 to 2025.

• Get legal advice quickly if sued: never ignore court papers, and be wary of anyone who pressures you not to appear or respond to a lawsuit involving a debt.​