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Consumer gripes about financial companies revealed

Fred Williams

Have you heard of Enhanced Recover Company? If you haven’t, consider yourself lucky.

The Jacksonville, Florida-based company has the fastest-growing complaint record for debt collection, according to the U.S. Consumer Financial Protection Bureau.

ERC drew 193 complaints a month on average from February through April, up from 55 in the corresponding period a year earlier, the CFPB said, a 252 percent increase.

Report reveals consumers' gripes about financial companies

The next fastest-growing targets of collection complaints were Southwest Credit Systems, up 212 percent, and First National Collection Bureau, up 71 percent.

Those are some of the takeaways from the consumer protection bureau’s first monthly report on consumer complaints, which it announced Thursday. ERC did not respond to questions about the report.

The consumer protection bureau hopes companies will respond to the exposure by sharpening their customer service and correcting problems.

“As our complaint data is made available to the public regularly through these monthly reports, companies will have more incentive to address potential shortcomings in their businesses that are harming consumers,” CFPB Director Richard Cordray said in remarks to consumer advocates at an Americans for Financial Reform event in Washington, D.C.

Debt collection — which was the focus of the first monthly report — drew 32 percent of the complaints logged in June, the report said, the most of nine types of complaints tracked by the agency’s complaint system. The top gripe is that collectors demand money people don’t think they owe.

However, the complaint total for collections abuse was down 7 percent in a three-month average of April, May and June from the corresponding period a year earlier. Most other types of complaints saw increases over the period.

Complaints that the debt is not owed do not always mean that the consumer claims to owe nothing, the report added. Many complaints are based on people’s assertion that the amount being demanded is inaccurate. That could reflect disputes over fees, interest, or partial payments that the debtor has already made.

It isn’t news that debt collection gets a lot of complaints. For years, the Federal Trade Commission’s complaint system heard more griping about collectors than any other business the agency regulated. Collectors argue that not every complaint is justified, and consumers are often angry about being reminded of a valid debt.

“I know we have a high complaint resolution rate,” said Cindy Sebrell, vice president of public affairs at ACA International, the largest trade group for debt collectors. She wasn’t familiar with the CFPB report and couldn’t comment on it.

Not all collectors are responsive though, according to the regulator’s report. Companies with the highest rate of untimely responses to debt
collection complaints were Hunter Warfield, 26 percent; National Credit
Systems, 5 percent; CCS Financial Services, 4 percent; Dynamic Recovery
Solutions, 3 percent; and Wells Fargo, 3 percent.

Looking more broadly at complaints about all types of financial services tracked by the CFPB, the report said that:

— Consumers from the District of Columbia submitted complaints most often, at 577 per 100,000 in population in the April-May-June period, followed by Delaware, 377; and Maryland, 333.

— Hawaii had the biggest increase in submitted complaints for the April-May-June period as compared to the corresponding period a year ago, up 41 percent, followed by West Virginia, 38 percent; Maine, 38 percent; Georgia, 35 percent; and Nevada, 27 percent.

— South Dakota had the biggest decrease in submitted complaints for the April-May-June period compared to a year ago, at 40 percent, followed by Iowa, 14 percent; Rhode Island, 12 percent; Kansas, 11 percent; and Wyoming, 10 percent.

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