CFPB: Consumers’ debt collection complaints rose 10% in 2020

An annual report to Congress by the federal agency charged with consumer financial protection shows that the agency received some 82,700 complaints about first-party and third-party debt collection in 2020, an increase of about 10% from 2019.

Of those complaints, 49% were about attempts to collect debt not owed – the most prevalent type of debt collection complaint in 2020, the report by the Consumer Financial Protection Bureau (CFPB) shows.

Complaints reported by consumers (Source: CFPB Annual Report 2021)

This category of debt collection complaint saw the greatest increase from 2019, the bureau said. In their complaints, consumers noted debts they did not recognize, attempts to collect debt that belonged to someone else, and being in collections for services or products not received. They also reported that the debt resulted from identify theft (29%); that the debt had been paid (19%); or that the debt was discharged in bankruptcy (3%).

The CFPB annual report focuses on the administration of the Fair Debt Collection Practices Act (FDCPA). The report highlights efforts by both the CFPB and the Federal Trade Commission to protect consumers, particularly those who have suffered “profound” financial impacts due to the COVID-19 pandemic, the bureau said in a release Monday. The CFPB and the FTC share authority to enforce the FDCPA.

The annual report notes that the CFPB last year engaged in four public enforcement actions arising from alleged FDCPA violations. Two were resolved – ordering $15.2 million in consumer redress and $80,000 in civil money penalties – while two cases remain in litigation.

The two still-pending CFPB enforcement actions include a suit filed in partnership with the New York attorney general last September over alleged deceptive, harassing, and improper methods to induce consumers to make payments against JPL Recovery Solutions LLC, Regency One Capital LLC, ROC Asset Solutions LLC (which does business as API Recovery Solutions), Check Security Associates LLC (which does business as Warner Location Services and Orchard Payment Processing Systems), and Keystone Recovery Group, and various individuals; and a bureau suit against BounceBack, Inc., for allegedly engaging in deceptive and otherwise unlawful debt collection acts or practices.

In other information on the bureau, the report points to the CFPB’s prioritized assessments made in 2020 regarding risks to consumer harm during the COVID-19 pandemic; publication of information to help consumers financially navigate the pandemic and consumer debt collection materials; a report highlighting servicemembers’ complaint data from 2019; publication of information about debt collection activity during the pandemic for student loans; and publication of results of a quantitative online survey of more than 8,000 respondents to test several versions of disclosures to support the understanding of time-barred debt and revival that informed the CFPB’s final rules on debt collection.

CFPB Submits 2020 Report to Congress on the Administration of the Fair Debt Collection Practices Act