I am not known for being a “numbers” person. Some people are better with numbers, others are better with words. I have always considered myself in the latter category. However, sometimes numbers tell us an interesting story.
Several industry commentators and the CFPB itself have published analyses of CFPB complaint data by categories of complaints. I have found these analyses less than instructive, mostly because of the fact that when consumers access the complaint portal, their complaint input is driven by a series of drop down menus, leading some to merely pick something randomly if their issue does not fit one of the predefined categories. They might also pick a category which they may feel will garner attention for their complaint. My experience is that the selected category sometimes does not match the facts of the complaint.
Who is inducing complaints, and how many complaints are they generating? These questions are more intriguing to me; and an analysis of the data in the complaint database helps us to understand better the pervasiveness of complaints. Do they cover the industry like a blanket, or are they focused on a few big players? I am not going to name any names, but the available data helps us to understand what is happening and also how the numbers published by the CFPB are less than accurately reflective of the state of the industry.
Of the top 25 complaint generators, eight are major banks or creditors—not debt collectors at all, yet complaint data related to their activities are included in debt collection complaint data. The top 25 have a total of 12,422 complaints, or 41.2% of the 30,095 complaints in the database since its inception in July 2013 up to June 30, 2014 (the date we downloaded the data we analyzed). The banks and creditors in the top 25 group have 3,765 complaints among them, more than 10% of the complaints related to debt collection. This point is key when you consider the fact that, in general, these debt collection complaints are attributed to debt collectors. In fact, the banks and creditors in this group rank at the following positions: 4,6,7,8,11,13, 15, and 16.
The top 14 complaint generators all have more than 400 complaints each, and six of these top 14 are banks or creditors. The top 14 have a total of 9,536 complaints, or 31.6% of the total complaints. In the top 25, the number 25 complaint generator has 219 complaints and the top complaint generator has 2,241. The remaining 17,673 complaints are attributed to 1,418 other entities.
With banks and credit grantors removed from the top 25, we have a new set to look at which is comprised only of third-party debt collectors. The top eight complaint generators, all with more than 400 complaints each, total 6,431 complaints, or 21.3% of all complaints. In total, the top 25 debt collection complaint generators have 10,305 complaints, or 34.1% of total complaints. The top complaint generator has 2,241 complaints, and number 25 (in the group with banks and creditors removed) has 147 complaints.
If you were to line up a list of the largest industry members, largest to smallest, next to the list of complaint recipients, you would not see an exact one-to-one relationship, but it would be close. Does that mean that our largest industry members need to clean up their act? My experience would suggest a resounding “no”. What this shows us is that the volume of complaints appears to be driven by the volume of an agency’s contacts with consumers. Larger agencies, with larger portfolios, are bound to make more contacts than smaller agencies handling fewer accounts.
Anyone who has received even a few complaints through the CFPB portal will tell you that many complaints are disputes or requests for validation that the consumer could have sent directly to the debt collector. Many complaints are from consumers from whom the agencies have never received correspondence, and whom the agency has not been able to engage in conversation. I have heard this statement from many industry members who have attended ACA seminars I have presented related to CFPB related issues. So it appears that consumers are seeing the CFPB complaint portal as the first resort of recourse for any communication with a debt collector, and not the last resort.
The CFPB website’s complaint submission page also has a new look. Previously, all areas about which the CFPB accepts complaints were listed on the same plane. Today, the areas are segregated into two classes: Most Common and Other Products and Services. This puts the collection industry front and center. Choosing one of the topic areas above results in the presentation of radio buttons consumers can use to further describe their complaint. However, the choices are limited in scope and do not include choices for common problem areas, such as the simple fact that the consumer has a long standing billing dispute with the original creditor.
The CFPB has expressed its expectation that all industries under its jurisdiction need to have a robust compliance management system. Complaint management and response is one component of a compliance management system. If your company has not yet registered for the complaint portal, it is time to do so now. Make complaint responses a priority for someone who can track and categorize them, investigate them and respond to them in a timely way. The CFPB expects a response in 15 days. Finally and perhaps most importantly, analyze your complaints to determine if they are shining a light on a broken process, rogue employee, or other issue that needs to be corrected in your operation. Responding to complaints can be an expensive proposition, so efforts to reduce the complaints you get will be worth it in the long run.
Debra Ciskey is the Director of Compliance at Afni, Inc. She is a member of the board of directors and a certified instructor for ACA International.