Home > Managing Debt > Debt Collectors Calling About a Debt You Don’t Owe? You’re Not Alone

Comments 0 Comments

It’s no surprise that consumers don’t like debt collection companies very much. It is a surprise, however, that complaints against them keep mounting, even after federal regulators sue firms for the very things consumers complain about — trying to collect on debts that don’t exist, calling at odd hours, contacting workplaces, and so on.

The Consumer Financial Protection Bureau regularly files reports about its complaint database — which has now logged 834,000 complaints overall. This month, the bureau highlighted debt collection complaints.

More than one-third (38%) of all debt collection complaints involved attempts to collect a debt consumers claim they don’t owe. In fact, when asked what type of account the debt collection firm called about, the most common entry after “other” was “I do not know,” at 24%. Credit cards were next at 14%. Consumers also said collectors frequently didn’t share enough information for consumers to verify the debt exists.

The CFPB said consumers complain frequently about debt collector tactics, too.

“Consumers complained about receiving multiple calls weekly and sometimes daily from debt collectors,” it said. “Consumers often complained that the collector continued to call even after being repeatedly told that the alleged debtor could not be contacted at the dialed number. Consumers also complained about debt collectors calling their places of employment.”

Complaints grew fastest during the final three months of 2015, compared to that same period in 2014, among residents of Indiana (38%), Arizona (27%) and New Hampshire (26%). On the other hand, complaints dropped in Maine (-34%), Wyoming (-26%) and North Dakota (-23%). Among larger states, Illinois saw a drop in complaints (-4%) while California saw a large increase (10%).

The most-complained about debt collectors were Encore Capital Group and Portfolio Recovery Associates. Both companies averaged more than 100 complaints each month between October and December 2015. And both have been the subject of enforcement actions, now settled, in which the firms admitted no wrongdoing but agreed to refund millions to consumers.

Portfolio declined to comment on the report, but Encore’s Sheryl Wright, senior vice president for corporate and government affairs at Encore, said the following in an email:

“Like any business, complaint volumes tend to be proportional to a company’s size, so as we look at the CFPB’s statistics, it’s important to remember that Encore has millions of interactions with consumers each month,” Wright said. “Despite being the leading purchaser of consumer debt we are only 2% of CFPB’s debt collections complaints. We also have more than double the accounts of the next largest company, yet we have significantly fewer complaints in comparison. … It’s also important to note that some of what’s listed as ‘complaints’ are not actual complaints but questions or disputes from consumers about their accounts.”

Among collection firms attracting the most complaints, Transworld Systems Inc. showed the largest increase – 84% during the last three months of 2015, of compared to the end of 2014. The firm did not immediately respond to a request for comment.

“Today’s report shows that inaccurate information about debts continues to be a source of frustration for many consumers,” said CFPB Director Richard Cordray. “We will continue to hold debt collectors accountable for ensuring that they are collecting the right amount from the right person.”

How to Deal With Debt Collectors

If you’re receiving calls from debt collectors, especially if they’re about a debt you don’t believe you owe, it’s a good idea to check your credit report for any errors. You can get your free annual credit report from AnnualCreditReport.com. You can also see how any collection accounts – accurate or not – are impacting your credit scores by getting your two free credit scores every 30 days on Credit.com.

And remember, not all debt collection calls are legit. Two tip-offs that you’re likely talking to a fake debt collector are that they won’t mail written confirmation of the debt or that they threaten dire consequences (jail, arrest, imminent lawsuit) if payment isn’t made immediately. Before you pay a debt collector, ask for written verification of the debt. Collection agencies, by law, must send this within five days of initially contacting you. Insisting on this is just one way to stop a scammer.

More on Credit Reports & Credit Scores:

Image: Purestock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team