January a Record-Breaking Surge in Consumer Complaints and Suits

March 4, 2024
By Cornerstone Staff

In January 2024, there was an unprecedented spike in consumer complaints and lawsuits lodged with the CFPB. Everything from Fair Debt Collection Practices Act (FDCPA) and Telephone Consumer Protection Act (TCPA) lawsuits to Fair Credit Reporting Act (FCRA) suits saw a double-digit surge, both on a month-to-month and year-over-year basis.

A Closer Look at the Numbers

For the uninitiated, these statistics might seem abstract. Let’s break them down:

• FCRA suits hit a new high, with 530 lawsuits filed in January alone. This was a 23.8% leap from December 2023 and a 19.6% hike from January 2023.
• FDCPA lawsuits also saw a significant increase. The 453 lawsuits filed in January represented a 24.1% rise month-over-month and a 30.5% increase year-over-year.
• TCPA lawsuits topped 200 for the second time in three years, signaling a 78.6% rise from December 2023 and a 50.4% increase from January 2023. Incredibly, almost a third of all TCPA lawsuits filed were class actions.

The Complaint Breakdown

In January, a whopping 6947 consumers filed CFPB complaints, a 14.8% increase from December 2023 and 14.3% more than January 2023. The most common complaint was about attempts to collect a debt not owed, accounting for 52% of all complaints. Written notification about a debt came in second, at 24%.

The Legal Landscape

These lawsuits and complaints were filed in 155 different US District Court branches. Nearly 681 different collection firms and creditors found themselves on the receiving end of these actions.

The Most Active Courts

• Florida Middle District Court – Tampa: 56 lawsuits
• Georgia Northern District Court – Atlanta: 56 lawsuits
• Illinois Northern District Court – Chicago: 36 lawsuits
• Texas Northern District Court – Dallas: 31 lawsuits
• California Central District Court – Western Division – Los Angeles: 30 lawsuits

A Closer Look at CFPB Complaints

The total number of debt collectors complained about was 778. The types of debt behind the complaints varied. While 27% of consumers did not specify the type of debt, 25% complained about credit card debt, and 17% cited other debts. Medical debt, rental debt, telecommunications debt, auto debt, payday loan debt, mortgage debt, and federal and private student loan debt also featured in the complaints.

The Status of the Month’s Complaints

The resolution of these complaints was as follows:
• Closed with explanation: 61%
• In progress: 24%
• Closed with non-monetary relief: 13%
• Untimely response: 1%
• Closed with monetary relief: Less than 1%
It is worth noting that 98% of these complaints received timely responses.

Wrapping Up

The ARM industry started 2024 on a challenging note, with a record-breaking surge in consumer complaints and lawsuits. As we move forward, it’s crucial for businesses to stay abreast of these trends and adopt effective strategies to mitigate risks and ensure compliance.
As always, Cornerstone is committed to providing relevant industry news and updates to help you navigate these complex waters.

Disclaimer: All statistics and figures listed in this article are based on data collected and analyzed by WebRecon and CFPB in January 2024.

Author

Cornerstone Staff

Staff
| Cornerstone
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