In the first quarter of 2014, about 7.5 percent of debt collection complaints filed with the Consumer Financial Protection Bureau were against payday lenders. This past quarter was the first full quarter in which consumers could select payday loans as the debt type leading to the collection complaint.

While 7.5 percent of complaints may seem small, it helps to clarify exactly what types of credit products and companies are most often raising the ire of consumers.

In the first three months of 2014, 877 separate companies were named in 6,647 debt collection complaints filed with the CFPB. The vast majority of the companies were third party debt collection agencies. But many of those companies had only one or two complaints attributable to their name.

In fact, 54 percent of named companies had either one or two complaints.

At the top of the list, though, were 110 companies with at least 10 complaints, and 30 companies with at least 40 complaints. In that list of the top 30 companies, less than half were third party debt collection agencies. The remaining were debt buyers, creditors, and payday lenders. analyzed the top 200 companies and assigned business types for each. The complaints made against these companies accounted for 79 percent of all complaints filed in Q1 2014.

debt-collection-complaints-companies-q1-2014Within the top 200 companies, 52.6 percent of complaints were made against debt collection agencies, down from 55 percent when we last did a company analysis in the fourth quarter of 2013. Creditors were next on this list accounting for 23 percent of complaints, down from 26 percent. Complaints against debt buyers came in next with nearly 17 percent, down from just over 19 percent in Q4 2014.

All categories that we analyzed in November of last year declined. How is that possible? A new category was added: payday loans. Payday lenders and their collection units accounted for 7.5 percent of complaints made against the top 200 companies.

This is supported by our findings, published yesterday, on the types of debt leading to debt collection complaints. That analysis showed that 7.6 percent of debt collection complaints were made on the Payday Loan sub-product.

It should come as no surprise to the ARM industry that payday loans are becoming more prominent in collection complaints. State attorneys general have been focusing on payday loan collection enforcement for a while. But the CFPB is also getting involved in the market, filing an action late last year against a short-term lender and its collection unit. And the Bureau recently issued a report on payday lending and noted it is very close to issuing new rules for the market.

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