CFPB: Most debt collection complaints in 2023 were attempts to collect debts not owed.
In its annual Fair Debt Collection Practices Act (FDCPA) report, the Consumer Financial Protection Bureau (CFPB) identified the most common consumer complaints related to debt collection in 2023. The most frequent issue involved attempts to collect debts that consumers claimed they did not owe, making up 53% of all debt collection complaints submitted to the agency last year.
According to the CFPB, this trend was consistent with the complaints received in 2022.
“Since the CFPB began accepting debt collection complaints in 2013, the most commonly reported issue has been consumers disputing the validity of debts being collected,” the report stated. The Bureau also cautioned that debt collectors pursuing consumers for incorrect amounts may be in violation of the FDCPA and emphasized its commitment to enforcing compliance.
Trends Contributing to Consumer Complaints
One factor the CFPB highlighted as a possible driver of these complaints is the growing "financialization" of consumer markets. This refers to the expansion of financial products and services, particularly in sectors like medical billing and rental housing, which has introduced new complexities and challenges for consumers.
Focus on Medical Debt
A significant portion of the report was dedicated to issues surrounding medical debt collection. Key findings included:
- Lack of Proper Written Notifications: The second most common complaint involved consumers stating they had not received sufficient written information to verify debts. The CFPB noted that 69% of complaints about written notices stemmed from this issue, with medical debt being a frequent concern.
- Collection of Paid Medical Bills: Many consumers disputed medical debt collection efforts, stating that their bills had already been paid through financial assistance programs that non-profit hospitals are required to operate under federal law.
- Communication Issues Between Healthcare Providers, Insurers, and Collectors: Consumers reported difficulty navigating disconnected communication between medical providers, insurers, and debt collectors, which led to billing and collection errors.
- Financial Institutions Partnering with Non-Profit Hospitals: Some non-profit hospitals have teamed up with financial institutions to offer medical credit products, including credit cards, open-ended lines of credit, and installment loans. While these arrangements allow hospitals to be paid upfront, they also enable financial institutions and their debt collectors to engage in practices that the IRS prohibits for hospitals, such as negative credit reporting.
- Debt Collectors Closing or Returning Accounts: Some collectors ceased collection efforts or returned debts to their clients without further action, which the CFPB viewed as an indication that they lacked confidence in the accuracy of the debts.
2023 Complaint Statistics
In total, the CFPB reported receiving 109,000 debt collection complaints in 2023. Of these:
- 63% were forwarded to companies for review and response.
- 28% were referred to other regulatory agencies.
- 9% were deemed non-actionable.
As of March 1, 2024, fewer than 0.1% of complaints remained pending with either the CFPB or the consumer.
Regulatory Actions & Enforcement
Beyond summarizing consumer complaints, the report also provided insights into CFPB supervisory examinations and enforcement actions. It detailed debt collection violations discovered during CFPB oversight efforts and highlighted legal actions taken by both the CFPB and the Federal Trade Commission (FTC) against debt collectors engaging in unlawful practices.
