CFPB Releases Debt Collection Complaints Data, and Here It Is

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The Consumer Financial Protection Bureau (CFPB) today published debt collection complaints it has been collecting since July 10. The data was made publicly available in the Bureau’s Consumer Complaint Database.

In conjunction with the CFPB’s announcement of an Advance Notice of Proposed Rulemaking for debt collection, the Bureau revealed its debt collection complaints data for the first time since beginning to accept complaints against debt collectors on July 10. The CFPB added 5,329 complaints about debt collection to the database.

The regulator said that the complaints represent only those that had responses from the companies named in the complaint. The initial number is far below the debt collection complaint totals from the FTC, which averaged around 15,000 per month.

Response disposition was roughly in-line with other industries in CFPB’s database. Of the 5,329 debt collection complaints submitted, 5071 consumers reported a timely response from the company. Furthermore, only 843 consumers (15.8 percent) disputed their resolution. And in 66.5 percent of cases, companies closed the consumer complaint with just an explanation.

What Did Consumers Complain About?

CFPB-Debt-Collection-Complaints-by-Debt-Type-11-6-13When consumers visit the CFPB’s complaint submission tool, they are asked to identify from a preset list what type of debt led to the complaint. The most common debt type cited was “Other” (with telecom debt, health club, etc. given as examples). Credit card debt accounted for nearly 24 percent of complaints while another 20 percent were “Uncategorized” (“I Don’t Know” is an option in the complaints tool). Other specifically named debt types were student loans – both federal and private, medical debt, auto loans, and mortgages.

The “Other” and “Uncategorized” debt types will likely decrease very soon. The CFPB Wednesday also opened up their complaints tool for payday loans. In our analysis of the company types (explained in more detail below), there were at least a couple hundred debt collection complaints against known payday lenders. Many of the “Other” complaints will probably show up as Payday Loans in the near future.

Consumers are then given six broad debt collection issues used to classify the nature of their complaint. The most common issue, accounting for 40 percent of all complaints, was “Continued attempts to collect debt not owed.” Communication tactics accounted for another 20 percent of complaints:

CFPB-Debt-Collection-Complaints-by-Issue-11-6-13

After one is selected, another set of sub-issues specific to each main issue is revealed. This list is much longer and more varied. But nearly 25 percent of consumers that complained claimed that the debt in question was not theirs:

CFPB-Debt-Collection-Complaints-by-Sub-Issue-11-6-13-2

Who Did Consumers Complain About?

Well, debt collectors. And major banks. And debt buyers and loan servicers and collection attorneys and payday lenders and utilities. Pretty much every kind of financial institution.

There were 663 separate companies listed in the data. About 50 percent of those companies received only one or two complaints, with about 50 percent receiving three or more. There were 99 companies with 10 or more complaints and 21 with 50 or more.

CFPB-Debt-Collection-Complaints-by-Company-Type-11-6-13Since there were so many companies, insideARM.com analyzed the top 150 companies and assigned one of three broad (very broad, in fact) company types to each: collector, creditor, or debt buyer. The 150 companies were the ones that had the most complaints, and when aggregated, they accounted for 77.5 percent of all complaints.

It should be noted that the overall percentage of collector complaints will probably grow slightly, mainly at the expense of creditors. The very largest banks had many complaints logged against them, and were counted among the 150. But many companies with only one or two complaints are small debt collection agencies. So the overall “collector” share is likely a little higher.

This is just a surface analysis of this complaint data. insideARM.com will be looking at the numbers in many different ways in coming days. Stay tuned!

Stephanie Eidelman and Stephanie Levy contributed to this report.

Continuing the Discussion

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  • avatar Debtor Nation says:

    I can somewhat verify that false service is under represented. Not only has it happened to someone I know twice, but they told me that when they went to court someone else in court stated that they were never served, they found papers simply left on their door step in plain site.

    The pro tem judge apparently stated that the mail was the back up and that was good enough.

    This statement by the pro tem judge is patently WRONG and illegal.

    The requirement of legal service to the debtor or an adult at the same address serves two purposes. One, it makes it resoundingly clear that the debtor must immediately take action. Two, A legal service or sub-service also does something else that the court appears to be overlooking, it FORCES the debt collector to not be so arrogant when they negotiate with the debtor. If the debt collector knows they have at their disposal a sleazy debt service company who will lie about service, then they hold all of the negotiating cards.

    This survey has done nothing to quell this abuse of the courts by the debt collection industry and the sleazy servicers who regularly false serve debtors.

  • avatar Debtor Nation says:

    The second thing this study does not address is why Strategic Defaulters are treated much much better by the courts than INVOLUNTARY DEFAULTERS and why judges have been brainwashed into a Stepford Wives trance dictation of “I am only here to judge whether or not a default has occurred”.

    Until defaulters are allowed to plead Involuntary Default in exchange for the debt being frozen where it was at the time of the last transaction minus payments made afterwards, these stories are simply to keep everybody busy about not much, aka much ado about nothing.

  • avatar Sisko says:

    I’m willing to bet that another large share of the “other” or “uncategorized” is utilities such as gas, electric, telephone. I’m kind of surprised that wasn’t a category choice already. Anyone care to guess other categories? Rent? Gym memberships? Overdraft fees?

  • avatar Patrick Lunsford says:

    Sisko, I think you’re right. In fact, under “Other,” the CFPB gave the examples of phone and health club. Payday loans are also there, like we mentioned in the article. Between telecom (phone, cable, internet), utility, and payday loan, I think much of “Other” is covered and probably a great deal of “Uncategorized” as well.

  • avatar Ken Wilson says:

    I skimmed through the database yesterday before this analysis came out. For years we’ve heard of the abusive practices of 3rd party debt collectors. We’ve been told that this segment of the ARM industry receives more complaints than any other. While my review was rudimentary, the numbers just don’t seem to bear this out. That’s not to say we, as an industry, don’t have a lot of work yet to do. What is says to me, however, is that when you look at the data – not the anecdote – the picture may be quite different than it’s been previously represented. It may also speak to the extraordinary efforts many in our industry have made to enhance compliance and responsiveness to consumer dissatisfaction.

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