According to the CFP Bureau, they received 82,700 debt collection complaints from consumers in 2020. A ten percent increase more than complaints of 2019.
These stats show that the complaints about debt collection are on the rise. Most complaints result from debt collectors trying to collect debts not owed, written notification on debts, threats to take legal actions against consumers, false representation, and others. In this article, we’ll be dissecting each of these complaints. Here are six main types of complaints about debt collectors:
- Attempts from debt collectors to collect debt not owed
The records show that attempts by debt collectors to collect debts not owed made up 49 percent of the complaints. This means roughly 40,523 complaints were about debt collectors trying to collect debts consumers didn’t owe. Consumers who made this complaint stated that the debts weren’t from them. But what does this mean?
- Debts were unrecognizable
- Debts were from people posing to be them
- Debts from services they never received
What could be the cause?
- Identify theft
Three of the above mentioned issues can be traced to identify theft. Consumers explained that debt collectors reached out to them because people stole their identities.
From the stats, complaints about identity theft were 29 percent. Consumers learned about their identity being stolen after they received credit reports from debt collectors.
Consumers had to fill out the identity theft form and reach out to collection agencies to remove the debt.
- Written notification about debt
With 20 percent of all the complaints, written notification about debt becomes the second most common complaint consumers have about debt collectors.
The FDCPA requires that collection agencies provide consumers with written information on their rights to dispute, responsibilities, and other things surrounding a debt. The act is the majority of why consumers get warranted and unwarranted written notification from collection companies. Consumers also complained about these debt collectors not providing enough information to verify the debts when asked. And like the case of identity theft, consumers reported it to the debt collectors.
- Complaints about debt collectors threatening to take legal action against consumers
In 2020, consumers’ complaints about debt collectors threatening to take legal action against them ranked number three on the list with ten percent. Consumers talked about how debt collectors issued threats or tried to frighten them by using their credit histories getting damaged to blackmail them. A staggering 23 percent of these debt collectors threatened to sue or jail consumers if they failed to clear their debts. And eight percent of debt collectors went as far as seizing the property of consumers.
- False statement and representation
Ten percent of complaints from consumers were about false statements and representation. Consumers disclosed that the statement and representation that led to the debt were false.
These consumers said they knew nothing about those statements and that other people (imposters) represented them.
- Communication tactics
From the research, eight percent of the complaints were from consumers who found communication tactics off-putting. Some of the debt collectors communicated poorly and didn’t follow TCPA guidelines.
- Threatened to contact someone or share information improperly
Two percent of the complaints received were about debt collectors threatening to embarrass consumers by sharing their information. This means that these creditors were willing to go against the FCRA to get back at consumers.
When selecting a debt collections agency to help you collect your own past-due debts, it’s important to understand their systems and processes for debt collection, especially after reviewing these top complaints from consumers regarding the debt collections tactics used in the industry. If you’re interested in learning more about our own processes, reach out to our team today.