Living with credit

No warm fuzzies for bill collectors

Fred Williams

Anger at debt collectors isn’t cooling down after all.

Complaints about collectors — who work the phones for credit card issuers and other lenders — will leap again this year, Federal Trade Commission (FTC) figures show.
Consumers fired off nearly 185,000 complaints about debt collectors this year through Nov. 5, according to figures released under a Freedom of information Act request. That’s more than during all of 2011, when the total was about 143,000.

But wait a minute, you say, didn’t I just hear that people are filing fewer lawsuits against collectors for the first time in years? Well, it turns out that consumers aren’t getting warm and fuzzy toward bill collectors, they’re just not suing them as much.

Mark Schiffman has an idea what’s behind the rising tide of anger. Schiffman, director of public affairs for industry group ACA International, notes that it is getting easier all the time to file a complaint. Smartphone apps such as PrivacyStar will help you lodge your gripe with the FTC the moment you receive an objectionable telephone call, be it from a telemarketer or a debt collector.

“We have a hard time looking at that (complaint) number as a benchmark of the industry’s doing well or not doing well,” he said. Complaints are not verified, so an angry consumer is not necessarily a wronged consumer.

Why complaints matter: Some 30 million Americans have debts that are subject to collection, and years of grumbling about hardball tactics has helped get regulators’ attention. Starting in January 2013, the federal Consumer Financial Protection Bureau (CFPB) will begin supervising debt collectors with on-site examinations.

The CFPB will start its examinations with the companies whose size and activities indicate they are most at risk of crossing the line — and the complaint record could be a factor. “On day one, we’re not going to show up on the doorstep of every one” of the collection agencies that are subject to examination, spokeswoman Moira Vahey said.

Sometime after examinations begin, the bureau will take charge of the complaint system and set up a resolution process. That means a collection company that drew a consumer’s anger will need to review the issue and respond.

“Many complaints are legitimate, and we take them seriously,” Schiffman said. And with tougher regulations looming, “we’re going to have to take them even more seriously.”

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  • Scott

    Hopeful CFPB will work with collection agency on how to reduce complaints. Since there really isn’t any statistics on the complaints given–you cannot say that most are wrong/right. I have read complaints filed just because they got a letter or phone call. Now, if it was something wrong in the communication, that’s one thing, but when they do their job I think it’s silly to file nonsense complaints.

  • Nancy

    What do they intend to do with creditors who refuse to work with the consumer on payment arrangements they can afford? Most of these bottom feeders would rather force one into bankruptcy then work to clear the debt…