As of 2019, about 26 percent of consumers in the U.S. with a credit file have a third-party collection tradeline furnished to their credit report. Unfortunately, not all of these third-party collectors are reputable. According to the Federal Trade Commission (FTC), harassing consumers to collect a debt is illegal, as it violates the Fair Debt Collection Practices Act. Since 2010, the FTC “secured permanent bans against 201 companies and individuals who engaged in serious and repeated violations of law, barring them from ever working in the debt collection industry again.”
To prevent abuse of power by debt collection agencies and individuals, the Fair Debt Collections Practices Act (FDCPA) was passed in 1977 and a report is published on it every year. All of the stats here are from 2021, the year of the most recent report.
So, how did things turn out for consumers facing collections in 2021?
Here are the stats…
General debt collection statistics
Number of complaints consumers filed against debt collectors in 2020 – 82,700
Biggest collections industries by revenue in 2019:
- Financial Services – 37%
- Telecommunications – 20%
- Other – 13%
- Healthcare – 11%
- Retail and Commercial – 10%
- Government – 9%
Types of complaints received by the CFPB in 2020
Attempts to collect debt not owed – 49%
Of that 49%…
- 48% said the debt was not actually theirs.
- 29% reported that the debt came from identity theft.
- 19% said they already paid off the debt.
- 3% said the debt was discharged in bankruptcy.
Written notification about debt – 20%
Of that 20%…
- 72% said they did not get enough info to verify the debt in question.
- 25% said they didn’t receive a notice of their right to dispute the debt.
- 3% said the notification did not say it was an attempt to collect a debt.
Took or threatened to take negative or legal action – 10%
Of that 10%…
- 40% reported that collectors made threats or suggestions that their credit histories would be damaged.
- 23% reported that collectors made threats to sue on an old debt.
- 12% reported that collectors threatened to arrest or jail consumers who didn’t pay.
- 5% reported that collectors said they would try to collect exempt funds (i.e. child support or unemployment benefits).
- 0.2% reported that collectors threatened deportation or turning them in to immigration.
False statements or representations – 10%
Of that 10%…
- 77% said collectors tried to collect the wrong amount.
- 16% reported that collectors impersonated a government official or law enforcement official.
- 5% said collectors insinuated that they were committing a crime by not paying their debt.
- 2% said collectors told them they shouldn’t respond to a lawsuit.
Communication tactics – 8%
Of that 8%…
- 52% complained of frequent or repeated calls.
- 29% said they continued to receive communications after requests to stop
- 13% reported abusive language.
- 6% reported calls outside of the restricted calling hours between 8 AM and 9 PM.
Threatened to contact someone or share information improperly – 2%
Of that 2%…
- 56% complained that the collector talked to a third party about their debt.
- 23% said the collectors contacted an employer.
- 20% reported that collectors contacted the consumer after they asked them not to.
- 2% complained that the collectors contacted them directly instead of going through their attorney.
Company responses to consumer complaints
Total Complaints Sent to Companies for Response – 54,700
- Closed with explanation – 46,700 (85%)
- Closed with non-monetary relief – 5,000 (9%)
- Company did not provide a timely response – 1,800 (3%)
- Administrative response – 700 (1%)
- Closed with monetary relief – 400 (0.6%)
- Company reviewing – 300 (0.6%)
Struggling with unlawful or abusive collections?
As people struggle through As people struggle through the economic downturn caused by COVID-19, collections are on the rise. The CFPB has five action letter templates to help you correspond with collectors, as well as two new no-action letter templates. If you are facing abuse or threats, fight back today! Call Debt.com or complete the form to request help to end collector harassment now!
Find solutions to settle collections and stop collector harassment.
All statistics from: https://files.consumerfinance.gov/f/documents/cfpb_fdcpa_annual-report-congress_03-2021.pdf
Article last modified on January 31, 2022. Published by Debt.com, LLC