Debt Collection Complaints Analyzed in CFPB Report

On March 20, 2014, the Consumer Financial Protection Bureau (“CFPB”) issued a report analyzing the consumer complaints it received concerning debt collection.  The CFPB started accepting and compiling consumer complaints on debt collection in its consumer response system in July 2013.  The report analyzed over 30,000 complaints received between July and December 2013 in addition to complaints submitted directly to the Federal Trade Commission (FTC).

The report shows that the three top complaints are as follows:

  1. Collectors’ repeated attempts to collect a debt not owed (34% of Complaints).  The vast majority of consumers reported that collection agencies are attempting to collect a debt from them that either does not belong to them or has been paid.  Others complained that the debt sought to be collected was the result of identity theft or discharged in bankruptcy.
  2. Improper communication tactics used by debt collectors (23% of Complaints).  Many of these complaints described improper telephone calls, such as frequent and repeated calls, calls to third parties or employers, and the use of abusive or profane language.
  3. Taking/threatening an illegal action (14% of Complaints).  These complaints mainly consisted of threats of arrest and threats of jail time, threats to sue on time-barred debt, seizures or attempts to seize property, and attempts to collect exempt funds such as unemployment benefits.

The remainder of the complaints concerned false statements of representation (13%), disclosures about and verification of a debt (9%), and improper contacts or sharing of information (8%).

The CFPB sent approximately 36% of the debt collection complaints to companies for their review and response and referred 35% of complaints to other regulatory agencies.  Of the companies that received complaints directly from the CFPB, about 82% have responded. In closing, the CFPB renewed its pledge to continue to develop the complaints process this year and actively protect consumers from the “unfair, deceptive, abusive, and other unlawful conduct of some debt collectors.”  For more information, contact Nicole M. Strickler at 312-334-3442 or nstrickler@messerstrickler.com.