Early yesterday, the CFPB released the findings of its national debt collection consumer survey. Both the headline of the CFPB’s press release and Director Cordray’s remarks highlight the survey’s finding that “over one-in-four consumers contacted by debt collectors feel threatened” during the collections process. The press release also highlights likely areas of on-going CFPB focus with respect to collections: failing to honor cease-and-desist requests, collecting on debt impacted by incorrect information (e.g., wrong amount, do not owe, different family member), failing to abide by call-time limitations, excessive contact, and default judgment rates in debt collection litigation.
The press release announcing the survey also includes links to “consumer debt collection stories” and a new white paper on online debt sales. That is no coincidence. Debt sales continue to be a significant area of regulatory focus at both the federal and state level, and debt sale consent orders typically address debt collection issues. The CFPB also uses consumer experience stories to put a personal touch on its key areas of focus.
Both the survey and the press release likely serve the dual function of justifying the CFPB’s current regulatory focus and laying the groundwork for current leadership’s future enforcement and rulemaking priorities. They may also signal to the FTC and state regulators areas for potential focus, particularly if the incoming administration replaces key CFPB leadership.
It also bears note that the survey concluded that “[c]onsumers are most often contacted about medical and credit card debts.” Credit card debt remaining a potential regulatory focus is no surprise. However, the mention of medical debt struck us as interesting, especially when combined with the consent order announced by the CFPB earlier this week against medical debt collection law firms. Both seem to suggest potential for increased (or at least continued) regulatory attention on medical collections. And if the efforts of the new administration and Congress to shift healthcare insurance towards a self-pay model succeed, medical collection activity also stands to increase nationwide. As a result, perceived compliance gaps or issues in collection efforts on such accounts present areas for ongoing oversight and compliance investments for healthcare providers and their outside collection agencies and law firms for the foreseeable future.