Collection agencies, debt buyers and collection law firms with revenues exceeding $10 million per year will fall under the Consumer Financial Protection Bureau's supervision starting Jan. 2, 2013, the federal agency confirmed Wednesday.

The CFPB's final Debt Collection Rule changed little from what was proposed in February, despite collection industry efforts to alter the $10 million benchmark. The CFPB expects that up to 175 companies will fall into the classification.

“Millions of consumers are affected by debt collection, and we want to make sure they are treated fairly,” said CFPB Director Richard Cordray. “Today we are announcing that we will be supervising the larger debt collectors in the market for the first time at the federal level.  We want all companies to realize that the better business choice is to follow the law — not break it.”

Companies averaging $10 million in annual receipts from collection activities over three years will be subject to supervision. The CFPB on Wednesday clarified its definition of "receipts" to be "total income" plus “cost of goods sold” and not amounts collected for another party. Because the final rule says fees earned in connection with these collections are considered receipts, the definition seems to say that only commissions will be considered receipts and not gross collections.

The new reporting practices adopted by the large companies will eventually trickle down to smaller companies, Rozanne Andersen, vice president and chief compliance officer at Muncie, Ind.-based Ontario Systems LLC, and former CEO at ACA International, told Collections & Credit Risk.

Some 30 million Americans have debt under collection, with average unpaid debt around $1,500, according to the CFPB. Under the final rule, the CFPB can evaluate collectors to make sure they are clearly and accurately identifying themselves, disclosing the amount of debt owed and not trying to collect debt that has been paid off or does not exist.

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