About the same time as the U.S. Supreme Court chose to decide if the Fair Debt Collection Practices Act (FDCPA) covers bad-debt buyers, the Consumer Financial Protection Bureau (CFPB) issued a press release reporting on a survey of more than 2,000 consumers regarding their recent contacts with debt collectors. The survey is the first of its kind, according to the bureau, and it shows some of debt collectors’ common behaviors. Although only 20 percent of the 10,000 people invited to participate in the survey did so, the CFPB generalized the findings to the entire country, leading it to conclude that as many as 70 million Americans—one-third of all consumers—are contacted by debt collectors in a year. Here are a few of the survey’s findings.
Debt collectors generally do not honor consumers’ requests to be left alone. More than 40 percent of consumers asked debt collectors to not contact them again, yet as many as three-fourths of these respondents were contacted again by debt collectors. Almost 90 percent of consumers made their requests to cease contact over the phone or in person with the remainder using some form of written communication. The more debts consumers owed, the more likely they were to ask the creditor to cease contacts.
One-third of debt collectors call between 9 p.m. and 8 a.m. The FDCPA prohibits debt collectors from calling debtors at inconvenient times, yet 36 percent of the survey’s respondents claimed that debt collectors did so anyway.
Debt collectors call frequently. Only one-third of respondents said they were contacted by debt collectors less than one time per week. Another 30 percent claimed debt collectors called one to three times per week, but surprisingly, nearly 40 percent reported being four or more weekly contacts. About 75 percent of respondents said that one to three contacts per week was too many. The number was much higher for consumers who received more weekly contacts.
Debt collectors get facts wrong. One-third of consumers said that debt collectors misrepresented the amount they owed. About 15 percent reported that they were contacted by a debt owed by a family member (whether this was in the same household is unclear). Finally, nearly three in ten said they didn’t owe the debt. Altogether, more than half of debtors reported that debt collectors made some kind of serious mistake regarding the debt they allegedly owed.
Debt collectors don’t often sue. If a debtor doesn’t pay a debt, the creditor can sue the debtor for repayment. In practice, only 15 percent of debtors reported being sued by debt collectors in the previous twelve months. The more debts they owed, the greater the likelihood of legal action. Only 6 percent of consumers owing one debt reported being sued, but those owing five or more debts were sued at a 35 percent rate. Only 26 percent of sued debtors said they attended the hearings.
The CFPB’s press release can be found here.
The bureau’s survey presents a snapshot of how debt collection works in the U.S. To the extent it’s representative of consumers’ experiences, the survey indicates why the Supreme Court should hold that the FDCPA should apply to debt collectors holding defaulted debts. However, by the time debt collectors are calling, many debtors are better off considering filing bankruptcy, especially those owing multiple debts or facing lawsuits from collectors. If you feel you are handling too many calls from debt collectors, then consulting with an experienced New York bankruptcy lawyer can help you strategize your options.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.
