CFPB Reports 1 in 4 Consumers Contacted by Debt Collectors Feels Threatened
According to a new report released by the Consumer Financial Protection Bureau, 27% of consumers who have been contacted by a debt collection agency in the last 12 months say they “felt threatened” by the company’s actions. In addition, three out of four consumers said that debt collectors did not honor their request to cease contact.
In addition to feeling threatened, many consumers were harassed about debt under false information. 53% said some element of the debt collection was incorrect: the collectors sought the wrong about of money, they contacted the consumer about a debt not owed, or the debt belonged to a family member instead.
This is particularly alarming because in August 2016, the CFPB proposed new regulations to limit these kinds of issues. Primarily, the regulations were to ensure that debt collectors do significant fact checks to confirm a consumer’s identity and the actual value of debt owed before contacting a person about a debt in collection.
The new rules also aimed to limit the number of debt collection calls to six times per person per week. 17% of consumers said a debt collector or creditor had contacted at least eight times per week in the past 12 months. 37% of consumers reported receiving calls at least four times a week. Many of these phone calls occurred outside of standard debt collecting hours, which are 9 AM to 8 PM. 36% of consumers said they had been contacted before or after those times, which is only allowed if the consumer specifically gives the creditor permission to call then (usually related to work or school scheduling).
The CFPB stated that approximately 70 million consumers either have or are contacted about a debt in collection. There are over 6,000 debt collection firms in the United States. Most debt collections center around medical bills or credit card balances, but some are based on personal loans, payday loans, and another line of credit extended to a consumer.
Debt collection continues to be the industry that receives the most complaints by the CFPB, representing 27% of the total complaints received since the bureau was created (285,752 out of 1,058,082 complaints).