Mistaken Identity Tops Debt Collection Complaints

According to a report released by U.S. Public Interest Research Group, debt collectors contacting the wrong person tops the list of complaints that the CFPB has received from consumers.The U.S. PIRG reports that debt collection in general has surpassed complaints regarding general issues with credit cards and bank accounts.

Approximately 22% of complaints the Consumer Financial Protection Bureau pertains to debt collectors calling consumers who either do not owe debt, or have already paid it off. This trend is part of an overall problem involving the accuracy and collection protocol of consumer debt. As mentioned on our blog, very often, debt collection attempts are unjustified due to a lack of or incorrect documentation linked with the debt.

Much of the issue is also due to third-party debt buyers who purchase the debt with spotty-at-best information regarding the debtor and amount owed.

In addition to debt collectors contacting the incorrect person, repeated calls followed as the second most frequent complaint. The U.S. PIRG recommends several improvements to the overall process of debt collection. Among them are requiring debt collectors to double check on the identity of the debtor to reduce the amount of incorrect debt collection attempts.

The U.S. PIRG also believes that improves to debt collection databases are in order, and that such databases should be updated and corrected as often as possible.

Finally, while federal laws do protect the rights of consumers being unjustifiably harassed by collectors, the U.S. PIRG believes more stringent laws should be implemented in order to hold collection agencies responsible for their actions.


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