The Complaints Issue: Revisiting Consumer Debt Collection Complaints

insideARM.com proudly presents The Complaints Issue (Part II), our second in-depth analysis of consumer complaint data from the Federal Trade Commission. This big issue is being brought to you by Persolvo Data Systems, a leading aggregator of account information on debtors enrolled in debt settlement programs.

Why are complaints such a big issue for the ARM industry?

A great many reporters writing stories about debt collectors will include the fact that “the FTC received nearly x number of complaints last year—” 180,928 in 2011, according to the FTC’s Consumer Sentinel Network Data Book for January – December 2011 “—about collectors, more than almost any other industry”… or something similar to that effect. And typically, the data ends there.

There is no perspective offered about how the number of complaints relates to the number of calls made each year by debt collectors (it’s a fraction of a percent).

There is no mention that the complaints are unverified — that they are simply “complaints” (certainly a call from a debt collector isn’t reason for a party).

Instead, the story then typically moves on to an anecdote or two highlighting a horrible consumer-debt collector experience.

It is true that there are numerous examples of such horrible experiences. It is also true that one could find such examples in any industry – just think of how many people have been ripped off by rogue plumbers or electricians, or had rude service in a restaurant, or bought a product that wasn’t what was expected and had a negative return experience.

In most industries, the lions’ share of interactions is professional and satisfying (as much as it can be satisfying to have to resolve a debt, or get your toilet fixed). “Yea, I got great service today at the Ruby Tuesday!” These stories do not get written because, well, who cares?

To help shift this conversation, we’d like to delve more into facts than anecdotes.

In September 2010 we launched our Big Issue series on insideARM with a focus on consumer complaints. Now, almost two years later, we revisit this still very hot topic with a much deeper dive into the FTC’s data, and the process of logging and categorizing complaints. When you see the stamp to the right on any article, click it to go straight to the Complaints Issue.

Earlier this year, we made a Freedom of Information Act (FOIA) request to the Federal Trade Commission for the line item data regarding consumer complaints against creditors and debt collectors.

The first set received covered January 2012, and included a total of 14,266 records. After a few rounds of clarification with the FTC and many hours of data crunching and investigation, we bring you The Complaints Issue – Part II.