Debt Collection Complaints to FTC Flooded by PrivacyStar Mobile App

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Stephanie Eidelman

Stephanie Eidelman

Yesterday the Federal Trade Commission released its annual Consumer Sentinel Network report on complaints received between January through December of 2015. I was shocked. It’s been some time since I’ve taken the time to dive into complaint data (as the story has pretty much been the same for a while).

When I wrote extensively about this topic in 2012, PrivacyStar – a mobile app for reporting unwanted calls – had just come on the scene. In January 2012, there were 389 complaints about debt collection submitted through the app (out of 14,266 total for the month). In calendar year 2015 there were 897,655 (or an average of 74,800/month).

Complaints of all types submitted through PrivacyStar

2013 246,498
2014 540,198
2015 964,186

I have a lot of questions about how this works. Sure, one thing you could say is that there have been lots of people who wanted to complain but had trouble gathering the information needed, or didn’t know how. Maybe. Though if they could find their way to this app and install it, I’d think they could find the FTC or CFPB complaint page.

The Consumer Financial Protection Bureau also released its monthly complaint data this week. By comparison, they handled 21,800 total complaints in January 2016; 6,788 for debt collection.

PrivacyStar processed 74,800 debt collection complaints in January.
The CFPB processed 6,800.

There just seems to be something off here. It doesn’t make sense on the face of it, not to mention the fact that in the last three years the regulatory environment facing legitimate debt collectors has increased almost immeasurably. Clients are laser focused on compliance – now equaling their focus on revenue. Debt collection firms of any material size (and their vendors) are being audited by clients and regulators on a constant basis. How can complaints be increasing at the rate shown by PrivacyStar?

I think the answer is that they are not. What has increased at this rate is fraud, scammers, and crooks.

There will always be complaints against debt collectors and debt buyers. After all, by definition, it’s a bad situation. People will be stressed and unhappy. And yes, mistakes are sometimes made by well-intentioned firms.

What I’d like to explore is PrivacyStar. I thought I’d find out how this works, and whether perhaps it has become too easy to complain.

I downloaded the app. The first thing I noticed is that it immediately tells you the name of who has called you – if they are in your address book. For “unknown” numbers, you have to upgrade to see the name. This costs $2.99/month, or $19.99/year. I paid for the upgrade. What do I see now?

Sometimes I see a company name. But in many cases what I now see is a location, like “Columbus OH” or “Fredericksbu VA.” You may say this is a company spoofing/hiding their name. Well I’ll tell you what. I communicate regularly with employees at the CFPB. When they call me, my caller ID never says “Consumer Financial Protection Bureau.” It says “Washington DC.” Same thing happened when my old accountant called me from “Bethesda MD.”

So, what are my options to pursue this further if I don’t recognize a caller? There are three:

  1. I can hit a plus sign and add them to my address book
  2. I can hit a crossed out circle and block them (in which case the circle turns red)
  3. I can hit a “thumbs down sign” and file a complaint

I am then asked “What type of call was this?” The choices are:

  • Debt Collector
  • Sales/Marketing
  • Political
  • Charity
  • Event Notification
  • Scam
  • Other

I’ll note that Debt Collector is the top option. If I didn’t talk to the company, I’m not sure how I would know what type of call it was, unless the name showed up.

The next screen says “Please select all that apply”

  • Called on my mobile after told not to
  • Called me at work after told not to
  • Told my family or friends about my debt
  • Didn’t identify self as debt collector
  • Was rude or offensive
  • Threatened to sue or garnish my wages
  • Harassed me in other ways

The final screen says, “Please answer the following questions to complete your complaint,” and provides two options with checkboxes:

  • I have received more than 25 calls
  • I previously told the caller to stop calling

Then there is an open comments field with instructions to “Please tell us more about your complaint. The more information you can provide the better.”

You then click the “Create Complaint” button. None of the above fields are required.

When I researched this a few years ago, what I found was that only about 12% of those complaints submitted through PrivacyStar were likely to have sufficient information to investigate, vs. 47% through the FTC’s online submission process, vs. 78% through the Better Business Bureau.

I have reached out to PrivacyStar to learn more about what data they currently receive. There was not time before publication to connect, so stay tuned for more. 

Oh, it also bears noting a few stats about the PrivacyStar app itself:

  • It has been installed somewhere between 1M-5M times
  • Of the 14,247 reviews, 10% gave it one star, 58% gave it 5 stars. Many of the one-star complaints were about problems cancelling, poor customer support, and problems with the app’s functionality post-recent upgrade.
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Posted in CFPB, Collection Complaints, Collection Laws and Regulations, Data, Debt Collection, Featured Post, FTC, Opinion, TCPA .

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  • avatar Victor Martinsons says:

    Your article sheds light on the bigger picture; online apps are making everything quicker and easier at the expense of details and oversight.

  • avatar Ryan Carver says:

    What a great article, thank you for taking the time to put this together. Your last bullet is so telling for how ridiculous times have become as our industry remains under attack but everyone else is free to do whatever they want (or not do as they promise and benefit financially).

    I’m thinking of creating an app where you can easily rate other apps along with filing complaints against those apps when they don’t deliver what was promised. We won’t require any validation for any of the complaints and everyone can just bash the apps they don’t like with no substantiation or validity. We can charge $1 per month and get rich from a worthless app that has no real value to anyone but millions will still complain about something…..so sad!!!

  • avatar Victor Martinsons says:

    @Ryan Carver. Yeah! You can count on me to be the first to download it so I can complain about it for no other reason than I’m having a bad day.

    You’re absolutely right on how sad it is. Once something is published it inherently gets a certain amount of validation regardless of verification or substantiation.

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