The following is Part 2 of a series on debt collection complaints. In the first part, Rozanne Andersen — Chief Compliance Officer at Ontario Systems, LLC — explained how to close the loop on complaints coming into collection agencies, a requirement from the CFPB.
The Consumer Financial Protection Bureau’s (CFPB) consumer complaint site goes live for debt collection complaints in July — an announcement that’s already set complaint resolution programs on fire. But how big is the issue, really, and what are the odds it will affect you?
Many agency owners have commented to me, “I’m not worried about the CFPB; we don’t generate fees that even come close to the $10M Larger Market Participant threshold.” If this thought has even crossed your mind, consider a few statistics released by the Consumer Financial Protection Bureau (CFPB) in its 2012 Annual Report to Congress:
According to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit (November 2012) and as reported by the CFPB, debt collection is a large, multi-billion dollar industry that directly impacts many consumers. In 2012, approximately 30 million individuals, or 14% of American adults, had debt that was or had been subject to the collections process (averaging approximately $1,500.
Complaints about third-party debt collectors and in-house collectors in 2012 together totaled 125,136 complaints, and accounted for 24.1% of all complaints filed with the FTC
FDCPA Complaints filed with the FTC about third-party debt collectors in 2012 totaled 102,783 – Nearly 20% of all complaints the FTC received directly from consumers
For a full understanding of the volume and types of complaints consumers filed against the collection industry in 2012 as reported to Congress by the CFPB in March of 2013, see, http://files.consumerfinance.gov/f/201303_cfpb_March_FDCPA_Report1.pdf
Believe it or not, that’s actually a modest decline in complaints since 2011. But it’s reasonable to expect those figures to increase in 2013 as the CFPB makes their new system more visible, and consumers learn about their ability to file complaints against the industry and have them resolved to their satisfaction. When taken as a whole, this data suggests whether you’re a small agency or a Larger Market Participant, the odds of someone filing complaints against your organization with the CFPB are high. So now is the time to complete your plan and the process by which you will handle them.
Earlier this week we discussed how to prepare a framework for your agency, asset buying firm or collection law firm to track and resolve consumer complaints, regardless of their source. But establishing a framework for a robust consumer complaint resolution program is only part of the solution. Understanding how to categorize and analyze complaints against your agency is the rest of the story. Here’s how:
Consumer Complaint Categories made Simple
The CFPB and the FTC have identified standard categories for consumer complaints. Using these in your consumer complaint resolution program will not only help process consumer complaints in a manner consistent with the CFPB, they will help you identify areas for improvement within your organization and benchmark your performance against the industry. These categories are fluid and may change over time as the CFPB digests the types of complaints consumer seek to file with the bureau. But the list available today presents the industry with a great place to start.
These categories include:
The company called me after I sent a written ‘cease of communication’ notice.
The company called me outside of 8am-9pm and/or at an inconvenient time.
The company called me at work, after being told that I cannot take personal calls.
The company called me looking for someone else.
The company calls me repeatedly.
The company added unauthorized interest/fees/expenses to the balance of my debt.
The company fails to identify themselves when they call me.
The company failed to send me written notice of the debt.
The company misrepresented the amount/status of the debt and/or the debt is not mine.
The company threatened to have me arrested and/or have my possessions seized.
The company threatened to take me to court if I did not pay.
The company refuses to respond to my written request to verify the debt.
The company told someone else about my debt.
The company used obscene/profane/abusive language.
The company threatened to use violence if I did not pay.
These complaint categories create an excellent base upon which you can add other issues of concern unique to your organization. For example, many agencies are adding categories that focus on issues of concern to their creditor clients, such as the Telephone Consumer Protection Act. Still others are adding ones that measure consumer satisfaction with their agents.
Once you identify the complaint categories of concern to your organization and your consumer complaint resolution program is up and running, you can use the complaint category fields to benchmark your performance, identify practices that tend to trigger consumer complaints, uncover potential Uniform Deceptive and Abusive Acts and Practices violations and take appropriate remedial action.
In response to this new development in federal oversight of industry complaints, Ontario Systems, under the direction of its Chief Compliance Officer, Rozanne Andersen and in collaboration with its clients, has designed a solution to help organizations of any size, using any software application, to process, track, respond and resolve consumer complaints regardless of source. It is a dynamic, interactive, closed loop consumer complaint resolution process that can be scaled to the needs and size of your organization. For a personalized demo of this product and a full discussion of all of the compliance requirements regarding consumer complaint resolution with the Chief Compliance Officer of Ontario Systems please email Chris Cochran at chris.cochran@Ontariosystems.com today!
The information contained in this publication is provided solely for educational purposes and does not constitute and should not be relied upon as legal advice. You are responsible for your own compliance with the law and you need to understand that the tools and product offerings described herein do not guarantee compliance. Accordingly, you need to consult with your own independent legal counsel regarding the topics addressed herein and how best you can comply with the law.