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CFPB releases survey of debt collection practices

According to a survey from the Consumer Financial Protection Bureau, roughly 25 percent of consumers felt threatened when contacted by a debt collector. Of the 40 percent of respondents, many of whom were Kentucky residents, who said that they asked a debt collector to cease contact, 75 percent said that the request was not honored. Overall, the CFPB says that 70 million consumers have interactions with debt collectors.

In some cases, they are third parties that have bought the bill from the original creditor. Past due medical or credit card debts are the main reasons why a consumer is contacted by a debt collector. The survey conducted by the CFPB found that half of those contacted by a collector were contacted in error. Common errors included a debt that didn't exist, an incorrect debt amount or being contacted about a debt owed by a family member.

Of those who said that they had been sued over a past due debt, 75 percent said that they did not go to a court hearing. This generally resulted in a judgment against them. Among respondents who had been sued, 6 percent had been contacted about a single debt while 35 percent said that they had been contacted about five or more past due obligations.

Consumers who are struggling to keep up with their debts may wish to file for bankruptcy. In some cases, many unsecured debts may be discharged within a matter of weeks with little or nothing owed to creditors. An attorney can explain the process of filing and the possible benefits of doing so. In most cases, debtors will receive an automatic stay of collection actions such as wage garnishment.

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