Fair Debt Collection Report

When creditors or collection agencies try to recover debts owed by consumers, they must abide by the terms outlined in the Fair Debt Collection Practices Act (FDCPA). In short, the FDCPA is designed to ensure that consumers in Illinois and throughout the country aren’t harassed or treated unfairly just because they owe money.
The Consumer Financial Protection Bureau (CFPB) submits annual reports concerning how it and the Federal Trade Commission enforce the FDCPA. While the CFPB and the Commission operate in different ways, they “work closely to coordinate debt collection enforcement actions” as well as “other matters related to debt collection,” according to the most recent report.
Debt Collection Across America
According to the recent CFPB report, debt collection is a multi-billion dollar industry. To be sure, it generates $13 billion through more than 140,000 workers in up to 6,000 firms across the country. For a surprisingly high number of Americans, debt collection is a major issue. Based on data contained in the report, “around 35 percent of adults, or 77 million of the 220 million Americans with credit files, show in debt collections.” In other words, more than one-third of all adults in our country have faced debt collection issues. While some debts are larger than others—they can range from as little as $25 to more than $125,000—the average debt load in the country is over $5,000.
Where do most debt collection companies get their money? The CFPB has highlighted the types of debts that tend to generate the most revenue for debt collectors in America:
·      Medical debts;
·      Student loans;
·      Credit cards;
·      Auto loans; and
·      Mortgages.
And of the revenue obtained, more than $4 billion of it “comes from debt buyers, who purchase accounts from the original creditor or other debt buyers.” After learning about a past-due loan, numerous Chicago residents have been unfairly harassed by debt-buying agencies.
Types of Consumer Complaints Received
Creditors and debt buyers can only collect debts from consumers if they do so within the parameters of the FDCPA. Nearly every day, however, Americans complain about collection agencies—from original creditors to third-party collections—that have violated the terms of the FDCPA. Where do most of these complaints come from? The CFPB report denotes the following types of consumer complaints:
·      Continued attempts from collectors to collect a debt that is not actually owed (37 percent);
·      Illegal communication tactics (20 percent);
·      Failure to provide proper disclosures about or verifications of the debt (13 percent);
·      Collectors that actually take or threaten illegal action (12 percent);
·      Collectors that make false statements or representations (10 percent); and
·      Collectors that improperly contact or share information (7 percent).
When the CFPB receives complaints, it follows up with the companies cited by consumers. Of the approximately 40,000 complaints received in 2014, the CFPB has received responses from nearly 90 percent of the companies implicated. In some cases, the collection companies closed the cases with monetary relief, while in others, consumers have disputed the responses received. At the time of the report, about 3 percent of the complaints from last year remained pending with the CFPB or the consumer.
When you’re struggling in debt, you’re likely to have many questions and concerns. In some cases, filing for personal bankruptcy may be an option. In other cases, you may need help from an experienced Oak Park consumer protection attorney. No matter what your situation, the dedicated advocates at the Emerson Law Firm can help.
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