Consumers are being “hounded” by debt collectors, according to a report by the Consumer Financial Protection Bureau. The report comes in the wake of the bureau’s increasing focus on debt collection practices.
More than a third of complaints stemmed from attempts to collect debts which the consumer did not actually owe, the report said. Another 23 percent dealt with the communication tactics of collectors. Other sources of complaint were collectors taking or threatening illegal action, verification of debt owed, false statements or representations and improper contact or sharing of information.
The bureau issued a final rule in January 2013 to supervise the largest debt collection companies. Most recently, the CFPB issued an Advance Notice of Public Rulemaking in November to collect information prior to potentially issuing consumer protection rules applying to the entire debt collection industry.
Since the CFPB began accepting them in July 2013, debt collection complaints have become largest source of consumer complaints each month. The March 20 report looks at over 30,000 such complaints received between July and December, 2013.
Of those complaints, the bureau referred about 11,000 back to debt collection companies for review and response. Other complaints were referred to other enforcement agencies, were incomplete as submitted or are pending.
Debt collection companies have responded to 82 percent of complaints submitted to them, the bureau said. Nearly 60 percent of those complaints were closed with an explanation, and a further 17 percent were closed with nonmonetary relief. Only 2 percent were closed with monetary relief. Other complaints were closed without relief or explanation, received an administrative response or were still being reviewed.
The annual report includes complaints from first-party collectors – such as banks collecting on their own behalf – and third-party collectors.
“Consumers should never be hounded about debts they do not owe,” said CFPB Director Richard Cordray in a press release. “We will not tolerate companies harassing consumers or threatening illegal actions in the debt collection market. We will continue to work hard to ensure that consumers are treated with dignity and fairness.”