Removing Barriers Blog

CFPB Releases Results of Debt Collection Survey
Posted January 12, 2017 by YKallepalli

The CFPB released results of a survey focused on collection of unpaid debts. In its survey, the CFPB asked 53 questions about first and third party debt collection, however the survey does not specifically identify credit unions. The survey states that, “a creditor is the original person or company that lent you money (for example, a bank or credit card company) or that sold you something on credit (for example, a store, hospital, or landlord). Creditors may collect debts through their internal collections departments.” 

In its findings, the CFPB identifies a number of consumer preferences and concerns. It also highlights some differences when comparing collections for creditors and collectors. 

It states, “Creditors and debt collectors might be expected to take different approaches to collecting unpaid debts for several reasons. First, a creditor has an existing relationship with a consumer that it may want to maintain, whereas collectors are not seeking to retain the consumer’s business. Second, creditors may have more complete or up-to-date information about the consumer including address and contact information, which may make creditors more likely than collectors to readily reach a consumer and to accurately state the amount owed. Third, collectors are more likely to be engaged after the creditor has been unsuccessful in collecting the debt, which may lead them to take a different strategy for getting a payment.” 

The survey also found that, “Consumers reported more favorable experiences with creditors than debt collectors along many of the dimensions surveyed. About three-quarters (77 percent) of consumers who reported being contacted by a creditor, for example, said that the creditor provided accurate information compared with 49 percent of consumers contacted by a debt collector. Consumers contacted by creditors similarly were more likely to say that the creditor provided options to pay the debt, addressed their questions, and was polite. Finally, those contacted by creditors were less likely than those contacted by debt collectors to agree with less-favorable characterizations of interactions such as reporting that the creditor threatened them.” 

In Director Cordray’s remarks, in addition to expressing a number of concerns about debt collection practices, he stated, “It is important to note that these same statistics also indicate that many debt collectors and creditors respect the laws governing their industry and have good practices in place. Many of the consumers who responded to our survey did not report any negative issues with those collecting debts from them. They were clearly informed about the nature of the debt, they were treated politely, and they reported no harassment or threats.” 

Credit union members continue to report extremely high levels of satisfaction as recently outlined in Consumer Reports which found that credit unions are among the highest-rated services they have ever evaluated, with 93 percent of their customers highly satisfied, on average, vs. 69 percent for the four biggest national banks. It notes, “That satisfaction is driven by good customer service, not surprising when you consider that credit unions are owned and managed by their members.”