The Federal Trade Commission last week released the 2013 annual report on its Consumer Sentinel complaints collection system. The highlights: identity theft complaints once again topped the list and debt collection complaints increased very slightly to 204,644. But an analysis of CFPB debt collection complaint data shows only a fraction of the FTC’s number.
The FTC said that roughly 10 percent of all complaints it received in 2013 dealt with debt collection. But the total number of debt collection complaints in 2013 — 204,644 (which includes complaints against both first and third parties) – was up only slightly from the 202,616 reported in 2012.
A closer look at the complaints data from the CFPB shows that the agency published only 10,991 debt collection complaints in 2013. The Bureau began collecting and publishing debt collection complaints on July 10, 2013, so a reasonable extrapolation of the numbers would give a total of around 22,000 for all of 2013.
So why the huge difference in numbers?
For one, it’s important to note what is being reported. The CFPB reports only published complaints. The complaints it receives from consumer must meet strict criteria before they are published, with actual humans applying the criteria to each complaint. For starters, every complaint must be valid and verifiable. The complaints also must be against a company that can be identified before it is published.
Furthermore, individuals within the CFPB’s Consumer Response system match incoming complaints to make sure none are double-counted.
The FTC’s system has no such criteria. Complaints are collected from various sources – the FTC’s own system, certain state attorneys general, the BBB, and other non-profits – and compiled without verification or even scrubbing for duplicates. When we analyzed FTC complaints data from 2011, we found that one person had filed more than two dozen complaints counted in the “debt collection” category that, to put it mildly, strained credibility. So what is reported by the FTC each year is most likely inflated.
But the CFPB’s debt collection complaints level for 2013 is most likely a little low. The Bureau has been collecting debt collection complaints for less than a year, and each month that goes by shows an increase in volume as more ARM companies come on board.
The pace of debt collection complaints through the first two months of 2014 gives a full year extrapolation of around 30,000 total complaints. And that number may rise further still. But it’s a far cry from 200,000+, of course.
To help collection agencies deal with this crush of data, insideARM today announced the launch of a new Collection Complaints Resources page. The page includes a live feed of the CFPB’s debt collection complaints database as well as official guidance and other resources for ARM companies to deal with complaints.