Consumer Resources

One time, before I started working on consumer law cases, I had a problem with a gym who demanded that I continue making monthly payments even though I’d tried repeatedly to end my gym membership. It was frustrating, and I felt like I was harassed by the random Texas company the gym used to do their collection calls.

In my frustration and anger, I searched for places that could hear my complaint, perhaps mediate an “OK” outcome for both sides, and get this Texas company to stop calling me twice a day, every day.

I either was a bad researcher, or just didn’t take the time to look very hard. My first thought was to file a complaint with the Better Business Bureau. Like the movie, The Revenant, the BBB didn’t do much for me. I did get to air my grievance, I suppose, in a long winded series of entries typed into the BBB’s online form. But the Texas company continued to call.

Don’t be like me. There are certainly times to use the BBB, but there are perhaps more useful outlets than the BBB to lodge complaints over debt collection problems. For instance, let’s talk about the Nebraska Attorney General today.

The Nebraska AG’s office has a consumer protection division, under the “public protection” link. One of the jobs of the AG’s office is to protect the public from fraudulent business activities and also to educate consumers. I don’t know how many attorneys work in the AG’s office, let alone how many staff the consumer protection division. I do know, after reading Bad Paper, that larger states like New York, had only two attorneys assigned to the entire consumer protection division. That’s either a lot of complaints handled by only 2 attorneys, or there’s not that many complaints filed with the AG’s office in New York.

If you have a problem with a debt collector, or get sold a lemon for a car, or have another consumer law problem, there is a form on the Nebraska AG’s website to file a complaint. They ask you questions like “have you hired an attorney for this matter?” and “how much did you pay for this product?” and “please describe what resolution you are seeking for this complaint.” It is thorough and also asks you to submit any documents that support your complaint.

I’d like to know how many of these complaints the AG’s office receives on an annual basis, and what the average resolution to these cases are. Anyone out there gone through it and willing to share stories from the other side?

I haven’t seen any data published by the Nebraska AG’s office on how many complaints they receive annually for illegal debt collection practices, but I did find a news release by the Nebraska AG stating that they were joining a coalition to “address illegal debt collection practices.” You can read the entire news release here. So at least you know that the Nebraska AG has teamed up with a lot of other government agencies, both federal and state, to participate in “Operation Collection Protection.” Whatever that means.


Improving the Debt Collection Market for Consumers

In a recent press release, the Consumer Financial Protection Bureau announced that it is considering a proposal to strengthen protections for consumers in the debt collection market. Its reasons for turning a magnifying glass to the debt collection industry have to do with how many complaints the CFPB has received, and how many consumers are likely to be affected at one point or another with a call from a debt collector.

Read the CFPB’s article here.

The CFPB noted that the bulk of the complaints it receives has to do with debt collectors calling consumers about debts that were already paid off, discharged in bankruptcy, or wasn’t their debt in the first place. Not surprising there.

Sometimes it seems like the CFPB is more awestruck with the highest number it can boast on its website – like telling us that more than 70 million consumers were contacted by a debt collector within the past year. Or that, because of CFPB’s enforcement actions against creditors and debt collectors, they’ve gotten hundreds of millions of dollars refunded to consumers.

That’s great and all, but what are they proposing to do about tightening up the debt collection industry? Turns out, the million dollar numbers the CFPB likes to brag about is a lot more concrete than the proposals of tightening up the debt collecting industry:

  1. Capping collector contact attempts;
  2. Making sure that companies collect the correct debt – which means collectors would have to have more information and more accurate information on debtors before they start collecting;
  3. Collection companies would have to make it easier for consumers to dispute a debt.

I understand and really appreciate what the CFPB is trying to do here. But what I’d like to see more of is hard and fast rules about how many “contact attempts” are too many, and exactly how much information is enough to move forward with collecting a debt. It’s not surprising at all to me that the bulk of complaints the CFPB receives is about debt collectors – it’s a tough and underhanded business meant to make the consumer feel bad, confused, and frustrated.

Indeed, the CFPB notes, like the Bad Paper book, that often the original creditor only gives names and debt amounts to a debt collector, in exchange for a nominal sum of money for each account. Given how loose and fast the original creditor and debt collectors play with consumers’ information, I’m surprised there aren’t more complaints filed with the CFPB.