CFPB Survey Sheds Light on Consumers’ Views of Collections

Ulmer Client Alert

In the first ever survey of its kind, the Consumer Financial Protection Bureau (CFPB) asked nearly 11,000 consumers about their experiences with collections over the past year. Twenty percent of the consumers surveyed responded and provided unique insights into the American consumer’s view of the debt collection industry.

The survey asked the consumers about their experiences with collections that occurred in the prior year, and examined consumers’ experiences with both original creditors and debt collection companies. The CFPB’s key findings included:

  • One in four consumers felt threatened by a debt collector.
  • Medical bills, credit cards, and student loans generated the most frequent communications from debt collectors.
  • One in seven consumers who were contacted about a debt were sued by a creditor or debt collector in the last year.
  • 37% of consumers contacted indicated that a creditor or debt collector attempted to reach them at least four times a week, while 17% indicated they were the recipients of attempted contacts at least 8 times a week.
  • While 42% of consumers asked creditors or debt collectors to stop calling them, only 25% reported that the communications actually stopped.
  • 36% of consumers reported being called by debt collectors between the hours of 9 p.m. and 8 a.m., despite a prohibition on calling during those hours.

Consumers also reported that they had more favorable experiences when communicating directly with their creditors versus a debt collector, citing that they received accurate information from creditors 77% of the time, while only 49% of consumers felt they received accurate information from debt collectors. Similarly, more consumers reported feeling threatened when contacted by a debt collector (28%) versus a creditor (16%).

Using the CFPB’s Survey Results for Strong Compliance Programs

The CFPB survey provides a depth of information to creditors who engage debt collection companies. While the initial findings may seem negative, they can be used as an insight into consumers’ views and responses to collection attempts. Auditing debt collectors for their policies and procedures regarding timing of phone calls, attempted number of contacts per week, and the use of threatening language is a minimum requirement to a strong compliance program. Creditors should require strict adherence to the Fair Debt Collection Practices Act by all debt collectors they use. Creditors should also review consumer complaints against debt collectors. Monitoring consumer complaints to assess trends allows creditors the opportunity to address issues before they escalate. Further review of law suits filed against debt collection companies provides insight as to their practices. Each piece of information helps creditors to develop and maintain a strong compliance program.

Ulmer’s Consumer & Commercial Litigation Practice provides litigation and compliance services to a national base of financial services industry clients. Attorneys in the group have decades of experience litigating and resolving a broad range of consumer financial issues. Additionally, attorneys in the group provide in-depth financial compliance counseling for financial services clients. From drafting strong compliance policies and procedures to developing training programs and compliance management systems, Ulmer’s consumer finance attorneys leverage extensive litigation experience to engineer compliance programs that reduce risk and help avoid costly litigation.