Many consumers feel threatened by debt collectors

More than one-in-four consumers contacted by debt collectors feel threatened, according to a new report by the Consumer Financial Protection Bureau.

The report was drawn from the first-ever national survey of consumer experiences with debt collectors. About one-third of U.S. consumers were contacted by a creditor or debt collector about a debt in the previous 12 months, according to a CFPB news release about the survey.

Consumers were asked questions about their encounters with debt collectors for loans and unpaid bills, such as whether they had been contacted by debt collectors in the past year, how frequently they had been contacted and the nature of the debt. Consumers were most commonly contacted about medical and credit card debt, the release stated.

According to the release, the CFPB survey found:

• 27% of consumers approached about debt said they felt threatened by the conduct of the creditor or collector who most recently contacted them. Debt collectors generally are prohibited from tactics that tend to harass, abuse or oppress consumers.

• 75% of consumers reported debt collectors did not honor requests to stop contacting them after being asked to do so.

• 53% of consumers contacted about a debt in the year prior said at least one collection effort was mistaken in some way. Common complaints included creditors or collectors seeking an incorrect amount or a debt that wasn’t owed, or that the person owing the debt was a family member.

• 36% of consumers reported being contacted at inconvenient times.

• Nearly 40% of consumers reported a debt collector attempted to contact them four or more times per week.

• 15% of consumers contacted about a debt in collection over the prior year reported being sued.

Debt collection is a multi-billion dollar industry affecting 70 million consumers who have or are contacted about a debt in collection. Banks and other original creditors may collect their own debts or hire third-party debt collectors. More than 6,000 debt collection firms are estimated to operate in the U.S., according to the release.

The full CFPB report can be read by clicking here.

By |2019-11-25T07:32:42-06:00January 17th, 2017|Financial Services|0 Comments

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