Lawsuits Way Down, Complaints Way Up: WebRecon

People sued less in February, but complained more, according to data released by WebRecon.

The number of Fair Debt Collection Practices Act lawsuits is down 25% for the first two months of 2021, compared to the first two months of 2020, while the number of Fair Credit Reporting Act lawsuits is down 3%, and the number of Telephone Consumer Protection Act lawsuits is down more than 50%. The number of suits was down if you compared the number filed in February with the number filed in January and if you compared the number filed in February with the number filed in February of last year. Any way you slice it, the number of lawsuits filed so far in 2021 is down a lot.

On the other hand, the number of complaints filed with the Consumer Financial Protection Bureau are up 34% during the first two months of the year, compared with the first two months of last year. The 5,235 complaints that were filed in February was 4% higher than the number filed in January and 36% higher than the number filed in February of last year.

Comparing 2021’s numbers to 2020 is still not an apples-to-apples comparison because the impact of the COVID-19 pandemic had yet to truly be felt in the United States until last March. But the increase in the number of complaints filed to a regulator that appears to be ramping up its enforcement activity may be the canary in the coal mine for the accounts receivable management industry. Consumer complaints are a driver of supervisory and enforcement activity at the CFPB, and with more than 10,000 complaints already filed thus far in 2021, the industry may want to brace itself.

The dropoff in the number of TCPA lawsuits is also an interesting trend that bears watching. It could be that plaintiff’s attorneys are waiting for the Supreme Court ruling in Facebook v. Duguid, which is expected any day now, or there could be other reasons behind the decline in TCPA suits.

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