CFPB Report: Older Consumers Face Debt Collection Problems

The CFPB has released this report about debt collection complaints made by older consumers (those identifying themselves as 62 or older). The report reveals that older consumers suffer similar collection problems to consumers generally. Nearly 50% of complaints are about the collection of debts that older consumers do not owe, and in nearly 30% of cases, older consumers do not even know the nature of the debt, based on the information collectors give them.

The report identifies some significant collection abuses, including illegal threats of garnishment, leading to aggravation of existing medical conditions and endangering the health of some seniors:

Debt collectors sometimes threaten to garnish older consumers’ Social Security, Supplemental Security Income (SSI) or Veterans’ benefits, even though these funds ordinarily are not subject to garnishment by the collectors. Older consumers report that these threats cause them significant distress, especially when they rely on these federal benefits to pay essential living costs. Consumers also express concern that this distress aggravates existing medical conditions, and thereby endangers their health.

Medical debts were also a concern.

Older consumers report problems in the collection of medical debt. These complaints describe frequent and repeated attempts to collect medical bills that are covered by insurance. Older consumers describe being confused and frustrated because debt collectors attempt to collect medical expenses while the consumer is simultaneously attempting to correct billing mistakes or waiting for providers and insurers to resolve disputes.

Older consumers were more likely to be subject to collection by “Death Collectors” seeking to collect the debts of deceased relatives.

Many older consumers receive calls to collect a decedent’s debt after they ask collectors to stop contacting them. Older consumers also report that debt collectors continue to call or send letters to family members after informing debt collectors that the deceased’s estate is in probate. Some complaints describe collection attempts made years after probate is concluded.

Finally, like all consumers facing debt collection, older consumers are subject to verbal abuse.

Older consumers specifically complain that debt collectors use abusive communication tactics to intimidate, aggravate or coerce them into making payments. Older consumers complain that debt collectors make successive calls using profanity, condescension, indignation or rage, including calling the consumer derogatory names, such as “deadbeat,” “liar,” or “fraud.” When consumers spoke with collectors, many described collectors’ voice, tone and attitude negatively, using words such as “rude,” “nasty,” and “abusive,” among others.

(The CFPB’s figure 4 provides an excellent graphic illustration of the way consumers describe debt collectors’ calls)

Finally, the report notes that, although 8,700 complaints were analyzed, only 3,800 were sent to the debt collectors involved for a response. Some of the remaining 4,900 were sent to other regulators for action, but most were not – because the consumer was unable to identify the debt collector, or the debt collector refused to provide identifying information. It seems that some debt collectors are trying to avoid the consequences of abusing consumers by concealing their identities.