Spike in FCRA Lawsuits a Cause for Concern

Down is up and up is down. After ending 2019 in the red, the number of lawsuits filed in January alleging violations of the Fair Debt Collection Practices Act, the Telephone Consumer Protection Act, and the Fair Credit Reporting Act, along with the number complaints filed with the Consumer Financial Protection Bureau were all green in WebRecon’s monthly barometer that was released earlier this week.

The number of suits and complaints filed in January were all up over the numbers from December, possibly indicating a more litigious year for the credit and collection industry in 2020.

Source: WebRecon

Of particular note is the spike in the number of FCRA lawsuits, which was 29% higher than the number filed in December and 37% higher than the number filed in January of last year. FCRA were the only category of lawsuit tracked by WebRecon that had an increase in 2019 over 2018, and it looks like that trend may not only be continuing, but accelerating. Companies in the credit and collection industry would be wise to keep an eye on their FCRA policies and procedures.

After slowing down for most of 2019, consumers filed a lot more complaints with the CFPB about debt collectors in January. The 3,777 that were filed was 13% more than were filed in December and 19% more than were filed in January of last year. The most popular categories of complaints were: attempts to collect debt not owed, which accounted for 46% of the complaints, followed by written notification about debt (22%), and took or threatened to take negative or legal action (11%).

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