By The Consumer Financial Protection Bureau (CFPB) is working to prevent unlawful debt collection targeting consumers at their workplace.
The regulator said in a Thursday (Jan. 2) blog post that it continues to crack down on companies that harass consumers, pointing to actions it took in 2014 and 2018 against debt collectors that contacted borrowers or their employers at work.
“Unscrupulous companies may use aggressive tactics to collect debts, including contacting people in the workplace, which can be illegal,” CFPB General Counsel Seth Frotman and Supervision Director Lorelei Salas wrote in the post. “This can threaten your employment or put pressure on you to pay debts even if you don’t actually owe them.”
The CFPB also said that federal and state law enforcement officials should be on the lookout for companies that contact people at work to coerce them to pay debts. This includes law enforcement officials who enforce the Fair Debt Collection Practices Act (FDCPA) and other laws that prohibit unfair, deceptive or abusive practices.
“CFPB examiners recently found that one or more companies unfairly called peoples’ references and places of employment after people asked them to stop or abusively included language in their loan applications that suggested people had consented to workplace calls that were actually illegal,” Frotman and Salas wrote in the post.
In another effort to combat these practices, the CFPB encourages Congress to repeal a provision of the FDCPA that allows debt collectors to contact third parties to obtain “place of employment” and other “location information” — a provision that some courts have interpreted to mean that debt collectors can contact a borrower’s employer.
“In a world where so many people have cellphones, companies don’t often need to contact your employer to find you,” the authors wrote in the post. “In fact, companies may be calling you at work (or threatening to do so) when the real point is to embarrass, pressure or otherwise coerce you to pay.”
The CFPB said in September that it is taking steps to ensure debt collectors follow consumer financial protection laws after finding that some are using illegal tactics.
The regulator’s annual report on debt collection released at that time highlighted illegal practices in the collection of medical debt and rental debt.
Shein is reportedly facing a probe in Europe over its compliance with consumer laws.
The investigation by the European Commission (EC) will look at whether the Chinese company is selling illegal products and could result in fines, Bloomberg News reported Monday (Feb. 3), citing sources familiar with the matter.
The Bloomberg report notes that the EC is increasingly employing a mechanism called the Consumer Protection Cooperation Network, designed to unify national authorities against major online platforms suspected of violating consumer protection rules.
Temu, Shein’s eCommerce rival, has faced similar actions, as has Apple. Companies found to have violated the law can be subject to fines from regulations in individual European Union states.
PYMNTS has contacted Shein for comment but has not yet gotten a reply. A company spokesperson told Bloomberg Shein intends to work with regulators to address concerns.
The EC is expected to introduced a new strategy this week designed to crack down on eCommerce platforms being used to ship unsafe goods from China and other countries outside the EU, the report adds.
Meanwhile, Shein is facing pressure from the U.S. as President Donald Trump prepares to impose tariffs on goods from China, Mexico and Canada.
As noted here this weekend, the tariffs will include a provision that will eliminate a longstanding rule that allows small packages to come into the U.S. without paying a tariff.
This rule — known as the “de minimis” exemption for packages worth less than $800 — is commonly used by Chinese eCommerce retailers to sell goods at lower prices by shipping them directly to consumers, and could affect companies like Shein.
Former President Joe Biden in September had called for rules targeting the de minimis exemption. The White House said at the time that the trade rules had been abused by China-founded eCommerce platforms and that the number of shipments claiming the exemption had jumped from 140 million a year to over 1 billion a year in the past decade.
Shein is also preparing to go public in the U.K. As reported here last month, the company plans to launch its initial public offering (IPO) in London by the middle of the year, possibly as early as April, per a Reuters report.
Shein called off its efforts to go public in the U.S. following opposition from lawmakers worried about the company’s ties to China, and alleged human rights violations in its supply chain.
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