On the Rise: Debt Collection Complaints, TCPA and FCRA Lawsuits

2014 has just begun, and U.S. district courts have already seen a 19 percent increase in Fair Credit Reporting Act filings and a 30 percent increase in Telephone Consumer Protection Act filings. At the same time, filings for violations of the Fair Debt Collection Practices Act dropped 26 percent.

In January 2014, more FDCPA lawsuits were filed in U.S. district courts than FCRA and TCPA claims combined. 709 lawsuits were filed in U.S. district courts for alleged FDCPA violations, but that’s still down from the more than 950 suits filed in January 2013. By contrast, the number of FCRA filings jumped from 161 in January 2013 to 191 in January 2014; TCPA filings spiked from 160 in the same time last year to 208 in January 2014.

New reports in our Research Library can help all collection agencies cope with the trends of growing FCRA and TCPA scrutiny. Compliance Overview: TCPA offers a comprehensive analysis of the TCPA’s evolution in the collection industry, plus real-world tools to combat legal troubles. Compliance Overview: Fair Credit Reporting Act provides guidance such as a compliance checklist on Red Flag Rules and common remedies for FCRA violations.

In addition to these specific lawsuits, consumers have also seemingly gotten the hang of using the Consumer Financial Protection Bureau’s consumer complaint website to air their grievances about the debt collection industry. These complaints are obviously much more vague than formal filings, but that doesn’t mean they should be disregarded.

The CFPB received 2,975 consumer complaints about debt collectors in January 2014. When the CFPB launched its complaint portal in July 2013, it managed to rack up 10,000 consumer complaints about debt collection for the rest of 2013; that’s nearly 60 consumer complaints a day. Now, that average has jumped to more than 95 consumer complaints a day.

Far and away, most of the consumer complaints (40.8 percent) were about continued attempts to collect on a debt not owed. Other top consumer concerns were communication tactics and the collector’s disclosure verification of the debt.

Signing up for the CFPB portal is the only way a collection agency can see and respond to the complaints filed against it. Once a company signs up for the portal, it must appropriately respond to consumer complaints, take the necessary steps to reduce them and constantly be on the lookout for the CFPB to use this complaint data as guidance for future rulemaking. Our To the Point: CFPB Collection Complaints helps collection agencies of all sizes get this process started.

Also, be sure to check out our latest insideCompliance: Assessing the Impact of CFPB Rules on Debt Collectors. The CFPB is closing the comment period on its Advance Notice of Proposed Rulemaking for the debt collection industry on Friday, February 28. Many of the consumer complaints from the Bureau’s site have influenced the questions in the ANPR itself. This must be seen as an opportunity for the collection industry to be proactive about proving compliance to the CFPB.