Collection
agencies worldwide do not enjoy the best of reputations. With long-standing strategies that many
debtors find offensive or unfair, and a continuous war of new regulations to
outlaw behavior most people would assume was simply beyond the pale, collection
attorneys and collection agencies traditionally have a lot of complaints filed
against them – and that is true, with more than 15,000 such complaints filed
with the Federal Trade Commission monthly.
The real question, however, is how are collection agencies handling
these complaints? The answer is:
surprisingly well.
Satisfactory Conclusions
The Consumer Financial Protection Bureau (CFPB)
recently released a report detailing the outcome of over 5,000 complaints
against collection agencies, and the data is surprising. Out of those complaints, more than 68% were “closed
with explanation,” meaning that the complaint was resolved without any action
needing to be taken – implying the agency was acting within the boundaries of
the law. An additional 20% were closed
with “non-monetary” relief (meaning something other than a settlement – most
commonly the removal of a name from a database) was awarded. Only 2.6% of complaints resulted in a
monetary settlement.
Mutual Relief
Another surprising thing is that the consumers
themselves were generally satisfied with these outcomes despite bringing the
complaints in the first place. Out of
all of the listed outcomes, only about 17% disputed the outcome, most commonly
when the complaint was closed with explanation – in other words, without any
action at all being taken.
It’s good to
note, however, that registration with the CFPB is voluntary, and many
collection agencies have not signed up and have no intention of signing up. It’s also worth noting that the balance of
the 15,000 monthly complaints that were not included in this report were likely
scams and illegal collection attempts and one can assume the outcomes there
were not satisfactory for consumers. Still,
for legitimate and law-abiding collection agencies and collection attorneys, it
would seem customer service is more of a priority than in the past.
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