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The Complaints Issue

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Debt Collection Complaint Picture Not Likely to Improve Under CFPB

Consumer complaints against debt collection agencies has become the ARM industry’s most visible data point in recent years. The eye-popping numbers are widely circulated in national and regional press and used to paint a sometimes-unfair picture of debt collection industry practices.

When the CFPB takes over responsibility for debt collection complaints, that image is not likely to improve, based on data already being collected on credit card complaints.

News and Opinion

problem like maria

Rogue Debt Collectors: What’s to be Done?

Attend the tale of Khemall “Kenny” Jokhoo — a rogue debt collector who hasn’t let the loss of his license stop him from some of these fantastic moves: Misrepresented himself as a lawyer, Harassed debtors over extremely old, uncollectible accounts, made unauthorized withdrawals from debtors’ financial institutions, Cashed forged checks and Concealed a prior criminal […]

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Comprehensive Report Released on FTC Debt Collection Complaints

The FTC’s debt collection complaint data does a lot of heavy lifting in the mainstream press, painting an unflattering portrait. It suggests an industry rife with abuse and in need of stronger legislation and government oversight. It goes a considerable distance in fostering a contentious relationship between the consumers contacted and the collectors trying to work with them.

But what if that isn’t the case? What if the data reveal an interesting truth about the collection industry?

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Are Debt Buyers Overrepresented in FTC Complaints Against Collectors?

According to an analysis of data received from a Freedom of Information Act (FOIA) request for January and February 2012, debt buyers made up a disproportionately high percentage of complaints against the ten most commonly-complained about third party debt collection agencies. This seems to bolster a common complaint among contingency agencies that debt buyers are giving the ARM industry a bad name.

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Debt Collection Complaint Data Shows Shift in What is Angering Consumers

The most popular complaints about debt collection from consumers in January 2012 involved ARM firms calling repeatedly or continuously and calling about a debt consumers claim they didn’t owe or asking for more money than what consumers think they owe.

Those were the same top two categories in 2009, when insideARM.com last analyzed debt collection complaint data from the FTC. But there has been a fairly significant shift in the number of individual complaints that cite those two abuses.

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FTC Data: Most Collection Agencies Receive Only One Complaint per Month

Earlier this year, insideARM.com made a Freedom of Information Act (FOIA) request to the Federal Trade Commission (FTC) for all collector complaint data from January 2012.

For the first half of the month, we identified 1,833 unique firms as the subject of the debt collection complaints, with an average of 2.5 complaints each. But the vast majority, 1,502 separate companies, received exactly one complaint.

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CFPB Begins Naming Names in Complaints Against Credit Card Issuers

There is perhaps some cause for alarm at how the reports the database can generate are being characterized. While timeliness is certainly something that can be effectively measured — irritating banking practices? That seems nebulous, and certainly not a field one can plug into an Excel workbook.

And there’s one more thing: this could be coming to every industry the CFPB regulates, including debt collection.

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The Complaints Issue: Revisiting Consumer Debt Collection Complaints

It is true that there are numerous examples of horrible experiences with debt collectors. It is also true that one could find such examples in any industry – just think of how many people think they have been ripped off by plumbers or electricians, or had rude service in a restaurant, or bought a product that wasn’t what was expected and had a negative return experience. But the dominant theme in most discussions about debt collection complaints is that the aggregate numbers somehow accurately reflect the ARM industry at large.

To help shift this conversation, we’d like to delve more into facts behind consumer complaints against collection agencies than anecdotes.

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Tips to Combat Consumer Complaints

Complaints from consumers recorded by the Federal Trade Commission regarding third party debt collection agencies increased 185 percent from 2007 to 2009. It is important for collection agencies to guard against the impact of frivolous complaints and directly address serious ones. Here are some steps ARM companies can take to protect themselves against complaints: Obtain […]

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2010 Complaints Infographic

2010 Complaints Infographic by Jeffrey Hearn August 30, 2010 Endnotes: 1. Mayer, Caroline E. “As Debt Collectors Multiply, So Do Consumer Complaints.” Washington Post. The Washington Post Company, 28 July 2005. Web. 18 Aug. 2010. http://www.washingtonpost.com/wp-dyn/content/article/2005/07/27/AR2005072702473.html. 2. United States of America. Federal Trade Commission. Annual Report 2010: Fair Debt Collection Practices Act. Washington, D.C.: Federal […]

Dive In

The Complaints Issue is a practical extension of insideARM.com’s mission to shift the public conversation about the ARM industry, exploring the subject of debt collection complaints beyond the standard headlines and conventional wisdom. We will be rolling out fresh analysis of January 2012 complaint data, received from the FTC via Freedom of Information Act (FOIA) request. In addition, you’ll see some content from our original data analysis in our 2010 Complaints Big Issue.

The Complaints Issue

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