Latest CFPB Complaint Report is Routine, But Provides a Nugget or Two

Yesterday, the Consumer Financial Protection Bureau (CFPB) released its latest monthly consumer complaint snapshot. This report provides a high-level snapshot of trends in consumer complaints. This is volume No. 9 of the report.  A complete copy of the Monthly Complaint Report can be found here.

The report begins with a “National Complaint Overview.” The details from that overview are as follows:

National Complaint Overview

As of March 1, 2016, the CFPB has handled 834,400 complaints nationally. Some of the highlights from the statistics in this month’s snapshot report include: 

• Complaint volume: As of March 1, 2016, debt collection complaints represented 26 percent of total cumulative complaints submitted to the CFPB, surpassing mortgages as the most-complained-about product or service since the Bureau began accepting complaints in July 2011. Debt collection, mortgage, and credit reporting complaints continue to be the top three most-complained-about consumer financial products and services, collectively representing about 69 percent of complaints submitted in February 2016.
• Product trends: Complaints submitted relating to credit reporting rose 13 percent between January and February 2016. During the month of February, 3,832 credit reporting complaints were submitted to the Bureau.
• State information: Of the five most populated states, New York—12 percent—experienced the greatest month-to-month complaint volume percentage increase, while Texas—8 percent—experienced the greatest month-to-month percentage decrease. Complaints from the five most populous states, California, Texas, New York, Florida, and Illinois account for over 40 percent of complaints submitted to the CFPB since July 2011.
• Most-complained-about companies: The top three companies about which the CFPB received the most complaints between October and December of 2015 were Equifax, Experian, and TransUnion.  Empowerment Ventures (parent company of RushCard) debuted as the 10th most complained-about company for the October – December 2015 period, averaging 290 monthly complaints.

This month’s report included a “Product Spotlight” on debt collection. That spotlight showed:

Product Spotlight: Debt Collection

Debt collection has been the most-complained-about financial product to the CFPB by consumers. As of March 1, 2016 the Bureau had handled approximately 219,200 debt collection complaints. Some of the findings in the snapshot include:

•  Collection on debts not owed: The most common debt collection complaint had to do with both first- and third-party debt collectors attempting to collect on a debt the consumer reported was not owed. These types of complaints accounted for 38 percent of all debt collection complaints submitted.
• Debt collectors repeatedly calling consumers: Another frequent complaint from consumers was about communication tactics used by debt collectors. Consumers complained about receiving multiple calls weekly and sometimes daily from debt collectors. Consumers often complained that the collector continued to call even after being repeatedly told that the alleged debtor could not be contacted at the dialed number. Consumers also complained about debt collectors calling their places of employment.
• Consumers unable to verify debts owed: Consumers complained that they were not given enough information to verify whether or not they owed the debt that someone was attempting to collect.
• Most-complained-about debt collection companies: The two companies that the CFPB received the most debt collection complaints about were Encore Capital Group and Portfolio Recovery Associates, Inc. Both companies, which are among the largest debt buyers in the country, averaged over 100 complaints submitted to the Bureau each month between October and December 2015. In 2015, the CFPB took enforcement actions against these two large debt buyers for using deceptive tactics to collect bad debts

insideARM Perspective

Generally, the monthly report provides little new information.  However, it contains some nuggets that can interest even the most seasoned industry veteran.

For example, the fact that Empowerment Ventures, the parent company of the Rush Card, “debuted as the 10^th most complained about company” is an excellent example of how quickly complaints can grow if there is some type of issue that impacts multiple consumers. The Rush Card is a pre-paid debit card that experienced some technical difficulties in October.

Likewise, a simple statement on page 13 of the report caught my eye. When discussing calls to a consumer’s workplace thee report notes,

Workplace phone calls are also a concern for consumers. In these complaints, some consumers reported that they are not allowed to receive calls at work, while others said their debt was disclosed to a supervisor or other third-party. Some consumers reported that collectors made in-person visits to their workplace. (Emphasis added.)

As I wrote on December 17, 2015 after the CFPB issued a Bulletin about the Risks of In Person Collections, I continue to be shocked that any reputable ARM Company would make any in-person collection efforts on consumer accounts.

Even though the CFPB acknowledges in their press release that “company-level information should be considered in the context of company size,” there is never any further discussion on the issue. It is not surprising that Encore Capital Group and Portfolio Recovery Associates, Inc. have a large number of complaints. They are both very large companies handling a very large volume of accounts.   It would be nice to see more analysis and commentary on this.

Finally, it would also be nice to see a report that actually digs into the complaints and discusses their resolution/outcome.