Debt collection complaints still #1:CFPB snapshot

By Katalina M. Bianco, J.D.

Debt collection has been the most-complained-about financial product to the Consumer Financial Protection Bureau, with approximately 219,200 complaints submitted as of March 1, 2016. This represents 26 percent of the total complaints submitted. The bureau's latest monthly complaint snapshot focuses on consumer's debt collection complaints, and according to the report, the most common complaint is about attempts to collect on a debt that the consumer said was not owed.

 

“Today’s report shows that inaccurate information about debts continues to be a source of frustration for many consumers,” said CFPB Director Richard Cordray. “We will continue to hold debt collectors accountable for ensuring that they are collecting the right amount from the right person.”

 

 Highlights. Some of the key highlights in the snapshot include the following:

 

• First-and-third party debt collectors attempting to collect debts that consumers said were not owed made up 38 percent of all debt collection complaints.
• Debt collectors called consumers weekly, or even daily, after being told the alleged debtor was not at that number.
• Consumers were not given enough information to verify whether they owed the debt in question.
• The most complained about companies were Encore Capital Group and Portfolio Recovery Associates, Inc., two of the largest debt buyers in the country. They averaged more than 100 complaints each month between October and December 2015. The CFPB noted that in 2015, it took enforcement actions against these companies for using deceptive tactics to collect bad debts.

National overview. As of March 1, 2016, the CFPB has handled 834,400 complaints nationally. Complaints submitted relating to credit reporting rose 13 percent between January and February 2016. The top three companies about which the CFPB received the most complaints between October and December of 2015 were Equifax, Experian, and Transunion.

 

Spotlight on Florida. This month's snapshot included trends seen in complaints from consumers in Florida. As of March 1, 2016, consumers in Florida have submitted 80,200 of the 834,400 complaints the CFPB has handled. Complaints from the three largest metro areas in Florida—Miami, Orlando, and Tampa Bay—accounted for nearly 60 percent of the complaints submitted from the state.

 

Mortgages are the most-complained-about product in Florida, accounting for 30 percent of all complaints. Complaints about debt collection accounted for 24 percent of total complaints from Florida. Equifax, Bank of America, and Experian were the three most-complained-about companies from consumers in Florida.

 

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