By Stephanie K. Mann, J.D.
A Consumer Financial Protection Bureau report found that over one-in-four consumers contacted by debt collectors feel threatened by the interaction. The report was drawn from the first-ever national survey of consumer experiences with debt collectors in which over 40 percent of consumers who said they were approached about a debt in collection requested that a creditor or collector stop contacting them. Of these consumers, three-in-four report that debt collectors did not honor their request to cease contact. The CFPB also released a study of potential risks in the online debt marketplace, where consumer debts and personal information are for sale for fractions of pennies on the dollar. Finally, the CFPB is unveiling an online series of consumers’ stories about their debt collection experiences.
"The Bureau today casts light on troubling problems in the debt collection industry," said CFPB Director Rich Cordray. "More than one-in-four consumers report feeling threatened by a debt collector, and a majority of those contacted about debt say the calls persist even after requests to stop. The Bureau is working to clean up abuses in this industry, and to see that all consumers are treated with fairness, decency, and respect."
Survey results. The CFPB survey provides an in-depth analysis of consumers’ encounters with the debt collection industry. The national survey is part of an ongoing CFPB effort to explore industry practices and consumer experiences with debt collectors. Consumers were asked about their encounters with debt collectors for loans and unpaid bills. Questions included whether consumers had been contacted by debt collectors in the past year, how frequently, and the nature of the debt.
According to the debt collection survey, about one-third of consumers—more than 70 million Americans—were contacted by a creditor or debt collector about a debt in the previous 12 months. Consumers are most often contacted about medical and credit card debt.
Collection stories. To illustrate consumers’ experiences with debt collection, the CFPB is sharing personal debt collection stories from consumers in an ongoing effort to highlight issues in the debt collection marketplace and to inform consumers about their rights.
Online debt sales market. In order to better inform public understanding of the debt collection industry, the bureau is also releasing a white paper highlighting potential risks to consumers’ personal information posed by debt sales online. Many debts sold in online marketplaces come with sensitive personal information attached, and are easily available at extremely low prices. The report raises questions about protections for that information and the dangers of it falling into the wrong hands.
Blog post. In the accompanying blog post, the CFPB emphasized that "you are not alone." In the United States, debt collection is a $13.7 billion dollar industry with more than 6,000 debt collection firms operating in the United States, said the post. Debt collection affects 70 million consumers who have or are contacted about a debt in collection. To date, the CFPB has published more than 129,000 debt collection complaints in its Consumer Complaint Database.
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