Some Collection Agencies Already Have Practice with CFPB Complaints

According to several sources and accounts, the Consumer Financial Protection Bureau (CFPB) will begin taking debt collection complaints in July. Once that happens, ARM companies will have to set up processes to address each complaint logged against it. But some firms have already been dealing with CFPB complaints.

An analysis of consumer complaint data in the CFPB’s Consumer Response system shows that several high-profile collection agencies, debt buyers, and collection law firms have been dealing with complaint response for a while.

Although the CFPB is not taking complaints for debt collection practices quite yet, the complex nature of the relationship between today’s ARM firm and its clients have exposed some companies to consumers. For example, almost all of the third party collection agencies that have been named work in the student loan sector. Consumer Response has been collecting student loan complaints for more than a year.

The creditor-attorney relationship has also resulted in some early complaints. Collection law firms working on behalf of creditors have been forced to deal with complaints already. And that trend cuts across sectors.

The recent addition of credit reporting complaints to the online database has also caught some ARM firms, as collection agencies and debt buyers are big furnishers of credit data.

ARM firms appear to have a very good response and resolution rate so far, roughly in line with their financial services peers.

Collection issues have already been prominent in the complaints database, as we reported in April. There have been some 1,700 debt collection complaints filed against creditors and a few ARM firms. But the scope and scale of the debt collection complaint issue will soon come to light when the database opens to those inquiries.

Consumer Response has logged about 117,000 complaints since late 2011. In 2012 alone, the FTC said that it recorded 178,000 complaints against third party debt collectors.

For those collection agencies and other ARM firms that have not been actively dealing with complaints, now is the time to think about establishing policies and processes to respond to the CFPB.