Free registration is required to access these resources. Login or Register.

Premium compliance products are also available in the insideARM Store

Jeff Dickey, Persolvo Data Systems

Jeff Dickey,
Persolvo Data Systems

In 2012, insideARM submitted a FOIA (Freedom of Information Act) request to the FTC, asking for complaint data against the collection industry. In part, the goal was to see what made up the complaints — 199,721 in 2012; 180,928 in 2011 — since the collection industry is often dinged in the press for its complaints numbers: usually the second highest category each year in the FTC’s complaints report.

Upon close examination of the reports, however, what insideARM discovered is that a significant percentage of those complaints… weren’t. Or, rather: a consumer complained; however, the complaint, though attributed to a collection agency, may have instead been with the original creditor. Or the complaint may be been with the product purchased, but the complaint was lodged against the collection agency because that’s who happened to call.

Since the FTC doesn’t verify the complaints that come in for accuracy, non-complaints get mixed in with legitimate complaints and we end up with those earlier couple-hundred-thousand data points. Arguments about the professionalism of the collection industry are made and based off data that, while not rife with error, isn’t 100 percent verified and doesn’t tell the whole story.

We here at Persolvo were very interested in the process insideARM used, and the conclusions it reached in its investigation into the FTC’s complaints data. The debt settlement industry finds itself in similar waters. Historically, the debt settlement industry has enjoyed a less than stellar reputation in the eyes of most ARM professionals. While that’s softening a little (see our two whitepapers: “Debt Settlement Survey: How Creditors and Collectors Increase Collections” and “Debt Settlement Survey Round II: How Creditors and Collectors Increase Collections“), in our most recent suvey of ARM professionals, over 30 percent of those who do not use a debt settlement company as part of their complement of services said it was due to “legal concerns (FDCPA) about dealing with third parties.”

So we asked insideARM to submit a FOIA request that looked at consumer complaints against the debt settlement industry. The next several blog posts will share our findings, opinions, conclusions, and suggestions. We’ll also look in some detail at the ways in which the ARM industry is and isn’t utilizing the debt settlement industry.

Related Products

Thumbnail - To the Point: Complaints and Dispute Resolution (UPDATED July 2014)

To the Point: Complaints and Dispute Resolution (UPDATED July 2014)

Consumer complaints are the next hot-button issue that federal regulators are looking to solve. That's why we've honed answers from our popular Ask the Attorney webinar into this finely focused report: to give you a head start on strengthening compliance and best practices.

Thumbnail - To the Point: CFPB Collection Complaints

To the Point: CFPB Collection Complaints

The Consumer Financial Protection Bureau has received more than 10,000 debt collection complaints since July 2013; that’s nearly 60 consumer complaints per day! That’s why we’ve compiled the key points from our insideCompliancewebinar into one report, To the Point: CFPB Collection Complaints. Get expert insight on what the CFPB’s data means, and how they may use it against the debt collection industry in the future. Learn the top four things your company can do right now to perfect its CMS.

Thumbnail - To the Point: Lawsuit and Complaint Data

To the Point: Lawsuit and Complaint Data

Get the latest in-depth data about complaint and courtroom trends for 2014 in To the Point: Lawsuit and Complaint Data. Learn how to identify “repeat offenders,” or consumers and attorneys known for filing multiple lawsuits against collection agencies. Build a holistic compliance management system that can adapt to new legal realities without losing sight of compliance fundamentals. Includes full video of the insideCompliance webinar, too!

Operations Guide: Consumer Disputes Thumbnail

Operations Guide: Consumer Disputes

We enlisted the help of three industry experts to develop our Operations Guide: Consumer Disputes. It provides your agency with insight into best practices for handling this tricky FDCPA issue. This Operations Guide comes complete with a link to the full video recording of the webinar -- great for use for all-staff trainings and quarterly in-services -- as well as a Certificate of Completion. This is a great resource for tracking training, allowing regulators and clients to see your agency's commitment to continuing compliance and education!