In my last article, I wrote about dispute management and the expectations of the CFPB as expressed in a special Supervisory Highlights report issued in March 2017. This article will discuss the Bureau’s take on complaints as expressed in several documents including the CFPB annual report on the FDCPA, published in March 2017.
Remember when you were young, and you got into trouble for something that someone else did, and then blamed it on you? Whether it was your sibling, cousin or a classmate, someone wanted to avoid consequences by pointing the finger at you, an innocent bystander. This is what it feels like to collection industry members when CFPB complaint numbers are published. Obviously, someone feels wronged when he or she files a complaint with the CFPB. However, should the CFPB hold the third-party debt collection industry responsible for actions of others? Let’s look at some of the commentary, and you decide.
In its sixth annual report to Congress on the FDCPA, an 82-page report published in March 2017, the author provided an example of a complaint received in the debt collection category. Let’s remind ourselves that up until 2011, annual reports to Congress regarding the performance of the FDCPA were provided by the Federal Trade Commission, the federal agency charged with enforcement of the Act. The FTC did publish complaint numbers in its annual reports; however, the FTC did not have a process for sharing complaints with debt collection agencies and did not seek resolution of complaints. Complaints were used to drive the initiation of enforcement actions. When the CFPB was created and given enforcement authority under the FDCPA, it took over the annual reporting to Congress and includes complaint data and more in its annual report to Congress.
While the author of the March 2017 report acknowledges that the CFPB gathers complaints about third-party debt collectors as well as first-party collection attempts, that is, collection attempts by creditors collecting their own debts, the term collector or collectors is used more than 200 times in the report. Creditor is used fewer than 20 times. The report opens with Director Cordray’s remarks, which begins with the fact that, “2017 marks the fortieth anniversary of the enactment of the Fair Debt Collection Practices Act.” The scene is set for a report about the actions of third party debt collectors. Then why, on pages 17 and 18, would the author provide an example of a complaint about excessive calls that is obviously a complaint about the collection practices of a creditor? In the example, the caller to the consumer is reported to have said that the company could make up to six calls a day to the consumer, and if the consumer were to be taken off the call list without making payments, the account would go into collections. The example is followed by, “Consumers report that collectors contact them using alternative methods, in addition to telephone calls.”
Because consumers must identify the entity about which they are complaining, the CFPB has the data and could provide a breakdown of complaints. In fact, in a monthly Complaint Report published in December, 2016, the CFPB identifies the “Most-Complained-About Companies for Debt Collection” (page 17). Of the 20 companies listed, 13 are debt collectors and seven are creditors. While complaint data for these individual companies is provided, there is not analysis of total complaint numbers attributable to creditors. Creditors collecting their own debt in their own name are exempt from Fair Debt Collection Practices Act compliance, yet nearly all of the complaint allegations on the Consumer Response portal relate to acts and practices specifically prohibited by the FDCPA. These problems make the complaint numbers muddy.
Complaints filed by consumers are not validated in any way by the CFPB. When is a complaint truly a complaint? The CFPB considers any expression of dissatisfaction by a consumer to be a complaint. Conversation after conversation that I have with industry members about the complaints submitted to them on the CFPB’s portal indicate to me that many consumers are using the portal merely to request validation of a debt or invoke other self-help remedies, such as to request that the debt collector cease communication. They copy and paste the same downloaded dispute letters that we all receive in the mail every day. Certainly, if a consumer feels wronged by the actions of a debt collector, a complaint may be warranted. However, complaints about calls that were never made and threats that never occurred skew the complaint data to the point of meaninglessness.
What does this mean to you? Keep your own data on the complaints you receive. Analyze them. Determine if they are an indicator of changes that need to be implemented in your processes. Is your IVR messed up? Do you have enough staff to handle all your inbound calls during busy times? What training do your collectors need to help prevent complaints? Are you responding to disputes fully, and in a timely way? The main value of complaints comes from their content and the resulting investigations we conduct before making our response. We are unlikely to see an end to the Consumer Response portal, so let’s use those lemons to make lemonade and help us to succeed in our efforts to turn attention to the actual culprits.
Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.