On March 29, the CFPB released its most recent complaint report focusing on complaints related to debt collection. According to the report, as of March 1, 2016, consumers have submitted approximately 834,400 complaints across all products, with debt collection complaints accounting for approximately 219,200 of the complaints. Debt collection complaints highlighted in the report include, but are not limited to: (i) first- and third-party debt collectors attempting to collect on debts that consumers claim they do not owe; (ii) consumers repeatedly receiving calls from debt collectors, sometimes early in their delinquency or during grace periods; (iii) consumers being contacted while at work, with some alleging that collectors made in-person visits to their workplace; (iv) debt collectors not honoring consumers’ requests to cease communications; and (v) debt collectors failing to provide sufficient information to verify debts. Similar to past CFPB-issued complaint snapshots, the report identifies the top 10 most-complained-about companies in regards to all financial products, as well as the top 20 most-complained-about companies for debt collection. Finally, the report identifies Florida as its geographical spotlight, noting that (i) Florida consumers have submitted more than 80,000 complaints as of March 1, 2016; (ii) mortgage-related complaints account for 30% of complaints received from Florida, exceeding the national average by 4%; and (iii) at 24%, debt collection-related complaints submitted by Florida consumers are 2% less than the national average.
On April 21, the CFPB filed two complaints against individual operators of an online lead aggregator for their alleged involvement in the company’s practice of reselling consumers’ sensitive personal data to lenders and debt collectors without assessing the sources of this data, a practice the CFPB claims exposed consumers to the possibility that their personal data could be used for illegal purposes. In December 2015, the CFPB filed a complaint against the California-based company for allegedly buying and selling personal information from payday and installment loan applications without “properly vetting buyers and sellers.” The CFPB’s December complaint further alleged that, among other things, the company (i) knew or should have known that the lead generators in its network used false or misleading statements to obtain consumer information; and (ii) connected consumers with lenders that offered less favorable loan terms than were otherwise available, did not comply with state usury limits or claimed they were exempt from state regulation and jurisdiction. The most recently filed complaints charge the two individual operators with, among other things, “knowingly or recklessly provid[ing] substantial assistance to [the company] in its unfair and abusive acts and practices, in violation of [the Dodd-Frank Act].” This assistance allegedly enabled the company’s lead generators “to attract consumers with misleading statements and [take] unreasonable advantage of consumers’ lack of understanding of the material risks, costs, or conditions of the loan products for which they [applied].” The CFPB’s complaints against the individual operators seek monetary and injunctive relief, as well as civil money penalties.
On April 6, the FTC released its 2015 Annual Highlights report, which is comprised of four key sections: (i) enforcement; (ii) policy; (iii) education; and (iv) stats and data. Regarding enforcement highlights in 2015, the report covers a range of administrative and court actions related to, among other things, technological innovations that pose fraud and security risks, the security of consumers’ personal identifiable information, and alleged payday loan scams. Significant actions summarized in the enforcement section include the FTC’s (i) December settlement with a leading U.S.-based hotel and resort chain resolving charges that its data security practices were unfair and deceptive; (ii) Operation Ruse Control, a nationwide cross-border crackdown designed to protect consumers from alleged fraud within the auto industry; and (iii) Operation Collection Protection, a federal, state, and local initiative implemented to combat alleged abusive and deceptive debt collection practices. The policy and education sections of the report separately highlight the agency’s efforts to provide guidance and recommendations to government bodies and lawmakers at the state and federal levels regarding best practices for implementing competition principals into proposed laws, regulations, or policies, as well as its education outreach program, such as Start with Security, a conference designed to provide companies with tips for implementing effective data security. Notably, according to the stats and data section of the report, the FTC received more than three million consumer complaints in 2015, with debt collection, “other,” and identity theft leading the numbers at 897,655, 512,022, and 490,220 complaints, respectively.
On March 22, the CFPB released its fourth annual report highlighting complaints the agency received in 2015 from servicemembers, veterans, and their families. According to the report, debt collection complaints continue to be the most common. The report states that, between January 1, 2015 and December 31, 2015, the CFPB received more than 19,000 complaints from the military community, 46% of which related to the debt collection industry. Complaints related to mortgages and credit reporting follow at 15% and 11%, respectively. The report also summarizes four public enforcement actions in 2015, noting that the actions provided servicemembers with more than $5 million in refunds and other relief.
On March 3, Massachusetts AG Healey announced a new Consumer Advocacy and Response Division (CARD) intended to protect Massachusetts consumers from alleged fraud, unfair business practices, and consumer abuse. The CARD staff will assist consumers with issues such as (i) auto purchasing and financing; (ii) data security and identity theft; (iii) debt collection; and (iv) foreclosure prevention. In 2015, AG Healey’s office handled more than 2,600 consumer complaint cases, resolving issues related to debt collection, auto lending, and securing refunds for disputed charges with cellular phone carriers.