Debt Collection Complaints Continue Monthly Decline; Consumer Litigation Filings Bounce Back

6/21/2017 3:52 PM

Filings under the FDCPA, FCRA and TCPA increased from April to May, bringing consumer litigation activity back in line with previous years, according to WebRecon.


Monthly consumer litigation filings increased in May, including a surge in Telephone Consumer Protection Act cases, while debt collection complaints continued to decline, according to the latest Debt Collection Litigation and CFPB Complaint Statistics report from WebRecon.

“Everything is pretty much back on track, in line with last year and years prior,” WebRecon CEO Jack Gordon stated in the report.

In April, monthly consumer litigation filings declined across the board for the Fair Credit Reporting Act, Fair Debt Collection Practices Act and TCPA, ACA International previously reported.

However, FDCPA filings increased 20.7 percent from 801 in April to 967 in May; FCRA filings increased 41.7 percent from 266 to 377; and TCPA filings increased 43.5 percent from 352 to 505.

Year-to-date filings increased except for the FDCPA, which saw a 2.3 percent decline from 4,461 at the end of May 2016 to 4,360 at the end of May 2017. FCRA cases increased 9.7 percent from 1,578 at the end of May 2016 to 1,731 in May this year and TCPA cases increased 1.5 percent from 2,034 to 2,065, according to the report.

WebRecon also reports that in May there were about 1,561 unique plaintiffs (including multiple plaintiffs in one suit.) Of those plaintiffs, about 527 (or 34 percent) had sued under consumer statutes before.

Debt Collection Complaints

There was a slight decrease in debt collection complaints to the Consumer Financial Protection Bureau in May.  Similar to March and April, debt collection companies responded to a majority, 95 percent (3,815), of May 2017 complaints in a timely manner.

Complaints declined 3.7 percent from 4,164 in April to 4,012 in May, according to the report.

“That is the second monthly decline in a row, though April’s decline over March was much larger at 12.7 percent,” Gordon said. “Even so, these two monthly declines did nothing to stem the [year-to-date] complaint explosion so far. The total complaints have increased to 26.9 percent over the same time last year.”

Year-to-date, there were 16,207 complaints as of the end of May 2016 compared to 20,565 in May 2017, according to the report.

Of the complaints filed, 1,663 (41 percent) were about continued attempts to collect a debt not owed, 964 (24 percent) were about written notification of a debt, and 460 (11 percent) were about communication tactics.

The top five sub-issues in debt collection complaints were:

  • Debt is not yours  (22 percent)
  • Didn’t receive enough information to verify debt (16 percent)
  • Debt was paid (11 percent)
  • Attempted to collect wrong amount (8 percent)
  • Didn’t receive notice of right to dispute (7 percent)

ACA International has continuously urged the CFPB to takes steps to address flaws in its consumer complaint handling process, including ensuring that the complaint information it shares in the consumer complaint database is based on meaningful, normalized data. In the white paper Methodological and Analytical Limitations of the CFPB Consumer Complaint Database, ACA showed that the flaws in the database—namely bias in the data collection process and incorrect categorization of complaints by industry—render the data near useless for policymaking or developing best practices.

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