Nov 16, 2013 Phil Burgess
For the last several months, the Consumer Financial Protection Bureau (CFPB) has been cataloging debt collection complaints from American consumers. It's one of the first steps the government regulatory organization has undertaken in its attempts to create a more secure financial future for domestic consumers, and many have wondered what the process would ultimately uncover.
According to insideARM, the data recently released by the CFPB appears to indicate debt collection firms are taking effective steps in addressing complaints. As with any industry, mistakes and abnormalities will inevitably make some consumers unhappy, so quickly resolving complaints is necessary, as it shows the sector is dedicated to serving clients.
The source reported that of the more than 5,000 complaints made public, 68 percent have been closed with explanation, a sign that consumers and collectors amicably settled disputes. An additional 20 percent closed with non-monetary relief, such as being removed from a call list, another indication of positive, collaborative settlement. What's more important is that the vast majority of consumers were satisfied with the initial responses from collection agencies. Just 16.9 percent countered or argued against a collector's proposed solution.
This data should be seen as good news for the collection industry. Although progress can still be made, these numbers show that many debt relief firms are satisfying the needs of borrowers. Often, the industry is unnecessarily maligned in the press due to just a handful of consumer issues relating to a miniscule portion of industry outlets. Also, much of the industry's negative coverage is due to complaints made to federal organizations such as the Federal Trade Commission regarding false debt collection efforts.
These practices are often conducted by malicious parties who have no connection to the debt service industry, but many people still associate these phony fronts with the sector as a whole. This trend has been ramping in recent months, as the Better Business Bureau reported that false collection agents are adopting increasingly deceptive practices to fool consumers into paying debts they do not actually owe.
For this reason, the data from the CFPB provides an accurate look at the collection sector because complaints relating to scams were not included in the report. Instead of viewing the overall complaint resolution reports released by other groups as an indicator of consumer satisfaction with debt relief groups, industry critics should cite reports that only encompass reputable, real outlets.