The Consumer Financial Protection Bureau – CFPB for short – documented some very interesting information in their recent semi-annual report to Congress. It turns out, according to exhaustive research done at the CFPB, that the majority of consumers did not dispute debt collection company responses. The CFPB received roughly 85,000 debt collection complaints since the summer of 2013. This information was also included in their recent report that is required as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The most recent semi-annual report was the seventh posted by the Consumer Financial Protection Bureau. And like the sixth report that came out at the end of 2014, the CFPB noted that, “ “As we continue to emerge from the continuing effects of the devastating financial crisis of 2008, we find that debt collection is central and cuts across virtually all credit products: credit cards, mortgages, student loans, payday loans and other consumer loans. Currently, about 30 million consumers – nearly one out of every ten Americans – are subject to debt collection, for amounts that average about $1,500 each.”
The CFPB report went on to say, “Many companies in this industry play by the rules, but others cut corners and seek to gain an advantage by ignoring the rules,” according to the report. “These bad actors are a detriment to every company that is faithfully following the law, and their actions harm consumers.”
Of all the complaints that were filed to the CFPB, 34 percent were complaints about debt collection actions. This report happened to track complaints that were logged between April of 2014 and March of 2015. The addition of debt collection complaints began in July of 2014, by allowing consumers to post complaints in the CFPB’s complaint database.
The most common complaints about debt collection practices were focused on continual efforts by collectors to collect on debts that consumers did now owe on. These types of complaints accounted for about 38 percent of all the debt collection complaints that the Bureau has received. Other cases involved consumer complaints about information being provided to credit reporting bureaus. These complaints indicate that people only learn about accounts that have gone on to debt collection companies after they check their credit reports.
There were also quite a few complaints about the tactics that some debt collection agencies use. 19 percent of the logged complaints included information that indicated these agencies call too frequently or at bad times of the day. Additionally, calls made to places of employment seem to be a major source of contention amongst people who have filed complaints to the CFPB’s database.
Beginning on the first of June, 2015, the Consumer Financial Protection Bureau has already received well over 600,000 complaints. The most common topics of these complaints are issues with mortgage loans and debt collection practices/agencies. It will be interesting to see how all of the different categories shake out in the next semi-annual report that the CFPB provides to Congress. We can expect to see that report some time in December. It is a positive trend to see that people are actually taking action and reporting their complaints to the CFPB. While the Bureau certainly isn’t the ideal body to police most financial industries, the reports to Congress may help with some much-needed financial service reforms in the future. The data provided so far really does show that as much as people complain about debt collection companies, they still go out of their way to handle these issues in an amicable manner.