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CFPB Report Finds Debt Collection Tops Older Consumer Complaints

Bureau Issues Consumer Advisory with Tips for Older Americans Dealing with Harassing Debt Collectors

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) released a report highlighting debt collection as a top complaint for older Americans, many of whom say they struggle with debt in retirement. According to the report, some of the debt collection issues older Americans complain about include collectors: hounding about medical debt, attempting to collect on debts of deceased family members, and illegally threatening to garnish federal benefits. The CFPB is issuing a consumer advisory today to help older Americans deal with harassing debt collectors.

“It is increasingly common for older Americans to carry debts into their retirement years, and consumers living on fixed incomes often struggle to pay off these debts,” said CFPB Director Richard Cordray. “Older Americans deserve to be treated with the respect they have earned.”

Today’s report can be found at:

Debt collection is a multi-billion dollar industry with more than 4,500 debt collection firms nationwide. Banks and other original creditors may collect their own debts or hire third-party debt collectors. Original creditors and other debt owners also may sell their debts to debt buyers. Approximately 30 million Americans had, on average, $1,400 of debt subject to collection in 2013.

Since September 2013, older Americans have submitted more complaints to the CFPB about debt collection than any other financial product or service. The CFPB analysis shows one out of three complaints were about debt collection. Today’s report analyzes approximately 8,700 complaints made by older consumers to the CFPB from July 10, 2013 to Sept. 30, 2014.

Some older consumers say they are unable to afford debt payments especially when they are retired and live on a small fixed income. They also express concern that the distress of being harassed by a debt collector aggravates existing medical conditions, and thereby endangers their health. The CFPB has recently noted that older adults with cognitive impairments are particularly vulnerable to harassment and scams, especially when seniors have memory problems or cannot keep track of finances. Today’s report found some of the issues affecting older Americans when it comes to debt collection include:

  • Collectors hounding older Americans about medical debt: Older Americans describe being confused and frustrated because collectors attempt to collect medical expenses while the consumer is simultaneously attempting to correct billing mistakes or waiting for providers and insurers to resolve the medical disputes. For example, older consumers report frequent and repeated attempts to collect medical bills already covered by insurance. Another common complaint from older consumers is first learning about an overdue bill from checking their credit report.
  • Collectors attempting to collect on debts of deceased family members: Older consumers describe collectors’ repeated attempts to collect debts of deceased family members. Many of the consumers complained that debt collectors continue to call or send collection letters after they have informed debt collectors that they are not personally responsible for the debt, or that there is no money left in the deceased borrower’s estate. Some complaints describe collection attempts made years after probate is concluded. Many consumers express anguish about collectors ignoring their requests to cease attempts to collect the debt of a deceased relative.
  • Collectors illegally threatening to garnish an older American’s federal benefits: Older consumers report debt collectors sometimes threaten to garnish Social Security, Supplemental Security Income or Veterans’ benefits, even though these funds ordinarily are not subject to garnishment by collectors. According to the complaints, these threats cause older consumers significant distress, especially when they rely on federal benefits to pay essential living costs.

Older consumers could not identify the original source of the underlying debt in about one third of their debt collection complaints. Of the debt they were able to identify, older Americans said 33 percent was from miscellaneous bills such as rent, utility bills, phone bills, and various membership fees. Other top sources of the debt were: credit cards, 17 percent; medical debt, 10 percent; and payday loans, 5 percent.

Consumer Advisory

To help older consumers, the CFPB is issuing an advisory today highlighting things they can do to help deal with debt collectors:

  • Protect their federal benefits: Consumers need to know that most federal benefits are protected in debt collection. Also, when a consumer receives federal benefits by direct deposit to a checking account, the bank or credit union is required automatically to protect up to two months of these benefits. If the consumer receives benefits on a government issued prepaid card, they usually are protected too.
  • Get more information to identify the debt: Older consumers report that collectors often reject or ignore their attempts to correct instances of mistaken identification. Today’s advisory tells consumers how they can obtain more information to identify the debt. It also includes the CFPB sample letter that consumers can use to find out information about the claims being made against them.
  • Dispute inaccurate debts: Older consumers report that it is difficult to obtain accurate or trustworthy information about alleged debt from collectors. Many consumers complain that they often inform collectors that they do not owe the debt, do not recognize it, or believe the amount that debt collectors demand is wrong. Today’s advisory tells consumers how to dispute the debt. It provides a sample letter to contact the debt collector.
  • Stop the harassment: One of the most common debt collection complaints that the Bureau receives from older consumers is 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. Today’s advisory includes a sample letter that consumers can send to request that debt collectors cease collection communications.

The Consumer Advisory can be found at:

The Bureau’s interactive online tool, Ask CFPB, contains more than 85 questions and answers related to the topic of debt collection. More information for older Americans and their caregivers about making financial decisions, protecting assets, preventing financial exploitation, and planning for long-term financial security can be found at:

The CFPB has taken several important steps to protect consumers and create a level playing field for law-abiding debt collectors. The Bureau’s larger participant rule for debt collection, which became effective on Jan. 2, 2013, gives the Bureau supervisory authority over the largest debt collection companies. In addition, in November 2013, the Bureau announced it is considering consumer protection rules for the debt collection market.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit