ACA International, the largest association representing collection agencies, has released a white paper that directly responds to the Consumer Financial Protection Bureau’s report, Servicemembers 2015: A Year in Review.
The CFPB report, released in March, stated that service members who file complaints are nearly twice as likely to be complaining about debt collection compared with the general population.
The CFPB's report highlighted complaints and enforcement actions that returned more than $5 million to service members and their families in 2015.
The ACA's white paper states that the CFPB’s report relies on broad definitions for “complaint" and “service member" in the data collection. The CFPB also does not provide the public with "meaningful context or methodological explanation, resulting in a flawed report that makes misleading claims about the debt collection industry as a whole," according to ACA. The white paper, ACA International’s Response to the CFPB’s Report Servicemembers 2015: A Year in Review, argues that the CFPB should adopt a narrower definition of “complaint” that only uses allegations of actual misconduct in order to gain a more reliable understanding of industry behavior.
The CFPB has long been concerned that unpaid debts can threaten a military career. Military members complained to the bureau last year that debt collectors have contacted their commanding officers and even threatened their security clearances over debt issues. Last year, the CFPB received more than 19,000 complaints from members of the military community. The top three most complained about products or services were debt collection, mortgages and credit reporting.
The ACA’s report states that the definition of a complaint is so broad that mere dissatisfaction, as opposed to actual misconduct, is listed as a complaint. "As the CFPB represents itself as a resource for consumers, it is expected that consumers will respond not only with complaints, but also by seeking assistance for the resolution of financial issues,” ACA International Director of Research Josh Adams, PhD, wrote in the white paper.ACA's CEO Pat Morris said, "ACA agrees with the CFPB that illegal debt collection tactics used by bad actors must be stopped, but using unverified data and anecdotes to generalize an entire industry harms legitimate debt collection companies that want to work with service members in a compliant, consumer-friendly way to resolve their financial issues."
The CFPB's report also does not make a distinction between complaints received from active military personnel, veterans or their family members but instead groups them all under the “service member” category. According to ACA, the reality is that there are an unknown number of service member complaints being filed by people who are no longer, or who have never been, in active military service.