CFPB Releases Complaint Snapshot, With Focus on Debt Collection Complaints

In what is a bit of interesting timing, the Bureau of Consumer Financial Protection has released a monthly complaint snapshot report, and has chosen to focus on debt collection complaints.

The timing is interesting, because as ACA International noted in its response to the report’s release, attendee’s to the association’s annual Washington Insights conference last week questioned the agency’s acting director, Mick Mulvaney, about the CFPB’s complaint database and how it fails “to distinguish between actual complaints and mere unhappiness about debts legally owed.” Mulvaney admitted during his remarks that the agency could do a better job verifying the complaints.

As well, Mulvaney said last week that the CFPB will begin looking at the number of overall transactions within a given product or sector when making decisions about its enforcement activities. And, Mulvaney has previously mentioned that the bureau will use hard data, such as the number of complaints it has received, in making decisions about its ruelmaking and enforcement priorities.

Finally, this appears to be the first complaint snapshot that has been released since Mulvaney replaced former director Richard Cordray back in November.

The report itself does not appear to break any new ground or shed much in the way of additional light beyond what the CFPB has released in previous reports.

The number of debt collection complaints received, on average, by the CFPB dropped 2% when comparing the first three months of 2018 and the same period a year earlier. Debt collection complaints made up about 27% of all complaints received by the bureau.

When selecting the type of debt they are complaining about, consumers chose “other” (33%) or “I don’t know” (23%) the most.

The bureau also analyzed the “unstructured” data provided in consumer complaints, namely the narratives that consumers can supply to help provide context and additional details about their concerns. The CFPB summarized that analysis into three main categories.

  • Consumers complained about debts appearing on their credit or consumer reports without prior written notice of the existence of the debt. In these complaints, some consumers noted that they recognized neither the company reporting the debt nor the amount in collection. Some of these consumers stated that before submitting a complaint to the Bureau they had asked the debt collector for additional information about the debt and for negative information to be removed from their credit history.
  • Consumers also complained that they had not received written notifications about the existence of the debt. Other consumers asserted that they wrote to companies and requested additional information, but the companies did not respond. Some of these consumers described being frustrated when companies had not provided information or guidance about how to resolve the debt.
  • Consumers complained about the communication tactics companies used when attempting to collect a debt, such as frequent and repeated calls, calls before 8AM and after 9PM, and calls after the consumer requested no further telephone contact about the debt. Consumers stated in their complaints that they felt uncomfortable disclosing personal information to people who called asking for it because they were not sure whether the person calling was a legitimate collector.

In its response to the report, ACA International stressed the small percentage of overall interactions between debt collectors and consumers that end up being complained about.

“The accounts receivable management industry makes approximately 1 billion consumer contacts per year, and actively encourages communication between consumers and third-party debt collectors,” said ACA International CEO Mark Neeb. “While ACA International is troubled by any legitimate complaints against those in the ARM industries or stemming from first parties, it is important not to sensationalize data which does nothing to help better serve consumers. Consumers deserve to be treated fairly and respectfully, but highly-regulated businesses also deserve a complaint process that accurately reflects this treatment.”

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