Last week we wrote about 2014 CFPB complaints against debt collection agencies. Numbers 4-6 are covered in more depth here, but for those interested in the statistics, here’s a quick review:
#6: Taking or threatening to take an illegal action: 2,207 complaints in 2014.
#5: Improper contact or sharing of information. 2,333 complaints in 2014.
#4: False statements or representation. 2,906 complaints in 2014.
Now for the top three:
#3: Disclosure verification of debt. There were 5,452 improper disclosures reported in 2014. Of these, 1,346 related to credit card collections and 1,057 had to do with healthcare collections.
Per Section 809 of the FDCPA, debt collectors are required to disclose certain information. Disclosures can be verbal on first contact with the debtor or via written notice submitted within five days of that first contact. Among the required disclosures are the present creditor’s name, the original creditor’s name upon request, the amount of debt, and a statement that the debt is assumed valid unless disputed within 30 days. For a full review of the FDCPA read here.
#2: Communication tactics. The CFPB recorded 5,567 complaints in 2014 based on improper communication tactics. Credit card collections again led the way with 1,660 complaints. Payday loan collections was the second worst category with 879 complaints. An unusually high 31% of all payday loan collection complaints related to improper communication tactics.
There are a number of rules governing the type of communication that is allowed, with whom it can be made, and the medium with which it can be made. Governing regulations are found in the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act. The TCPA governs the use of automated dialing systems and a pre-recorded voice. Read a summary of the FDCPA, HIPAA, or the TCPA.
And finally …
The number one debt collection complaint from 2014 was continued attempts to collect debt that was not owed. The Consumer Financial Protection Bureau reported a whopping 11,780 unique complaints regarding a debt collection agency attempting to collect an illegitimate debt. There were more than twice as many complaints about persistent attempts to collect on a debt that was not owed as there were of the next highest category (communication tactics).
Generally speaking, a debt collection agency may assume the debt is legitimate if it does not get disputed by the debtor within 30 days of notification. Section 809 of the FDCPA mandates that a debt collection agency provide written notification of such if it does not verbally inform the debtor on first communication. Check out our compliance page for a summary of FDCPA Section 809 read.
The CFPB started publishing statistics on 10 July, 2013. In the first year (174 days) there were 11,074 total complaints (approximately 23,000 when pro-rated for the year). In 2014 the rate of complaints to the CFPB was up by 67%. Here is a graphical summary of the most common debt collection complaints (as reported to the CFPB) in 2014.