We have written many times about consumer complaints stemming from debt collection. In fact, we wrote last week on this topic. So, just when you thought we might cover a different Bureau concern, the CFPB issued its latest monthly Consumer Complaint Snapshot. And, guess what? The March 29th report highlighted debt collection complaints.
In releasing the report, CFPB Director Richard Cordray said, “Today's report shows that inaccurate information about debts continues to be a source of frustration for many consumers. We will continue to hold debt collectors accountable for ensuring that they are collecting the right amount from the right person.”
The CFPB's Snapshot noted the most often named collection complaints:
- Collection on debts not owed.
- Debt collectors repeatedly calling consumers.
- Consumers not given enough information to verify that they owe the debt.
Each of these areas is addressed in the Fair Debt Collection Practices Act which applies to third-party debt collectors. But, as we have also pointed out in our blogs, each of these areas can also be a problem for original creditors. The failure to adequately and accurately determine indebtedness can lead to violations by creditors of the Fair Credit Reporting Act as well as constituting Unfair, Deceptive or Abusive Acts or Practices in violation of The Dodd-Frank Act.
As of March 1st, debt collection complaints represented 26 percent of all complaints submitted to the CFPB, overtaking mortgage servicing as the most-complained-about product or service since the CFPB began complaint record keeping in July of 2011. Credit reporting complaints (often having a collection connection) rose 13% between January and February 2016. The CFPB also keeps track of the “most-complained-about” companies. In the credit reporting arena, it should not surprise anyone that the big three national consumer reporting agencies, topped this list.
The CFPB picks a state or region to focus on in each month's Snapshot. March's spotlighted Florida. Again, not surprisingly, Florida's most complained-about products or services were mortgages, particularly mortgage servicing. Collection complaints in Florida mirrored the national trend. And, the most complained-about companies in Florida were two of the three national consumer reporting agencies, with TransUnion losing out on this honor to Bank of America.
The CFPB concludes each of its monthly Snapshots by informing consumers how to file complaints. No wonder that the CFPB has handled over 834,000 complaints since this program began.