U.S. consumers have racked up a projected $1 trillion for outstanding credit card debt in 2016, yet the year marked the smallest Q1 pay down of $27.5 billion. People are spending a lot of money and not paying off their debt.
For debt collectors, this seems to have posed a very ripe business opportunity. A national survey shows that almost 1 out of 5 American adults have been contacted by a debt collection agency. It seems that phones have been ringing off the hook—which may not be a good thing when it comes to regulatory compliance.
Federal regulators are keeping a close eye on the burgeoning industry and continue to carry out enforcement actions against debt collectors who are non-compliant with the Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA), and Fair Credit Reporting Act (FCRA). The Consumer Financial Protection Bureau (CFPB) reports that it has handled just shy of 300,000 debt collection complaints since July of 2011, making debt collection the most-complained-about industry. Consumers have complained to the CFPB that:
- Debt companies say they owe debt, but it’s not really their debt or the amount is incorrect. (This was the focus of approximately 39% of all debt collection complaints.)
- Debt companies are bothering consumers too many times at work, even after informing the collector that contact at work was prohibited by their employer.
And just yesterday, the FTC reached a $9 million settlement with a debt relief provider whose direct mail ads exaggerated how much money people would save using their services and their success rates.
As collection activities continue to grow, the possibility for risk increases. How are you ensuring that your agents are compliant? Are you monitoring 100% of your calls to mitigate risk, monitor compliance and protect your brand? If not, you should be.
I’ll be at the ACA International 2017 Spring Forum & Expo next week to meet with leaders in the collection industry and talk about PerformLine’s compliance monitoring solution. If you’ll be there, let’s meet!
You can also learn more about mitigating compliance risk at our annual conference COMPLY2017, the RegTech and Compliance Conference, on June 7-8 in NYC. Check out our full agenda and our speaker line-up.