ACA Releases New White Paper Disputing the Consumer Financial Protection Bureau’s Survey Report on Consumer Experiences with Debt Collection
ACA International’s latest white paper argues the CFPB paints an unfair picture and discredits the legitimate debt collection industry by relying on flawed and empirically weak data and by promoting misleading conclusions.
February 28, 2017 – Washington, D.C. – The Consumer Financial Protection Bureau’s (CFPB) survey report on consumer experiences with debt collection is “empirically weak, conceptually unclear, and overtly exaggerated,” according to the new white paper “An Overview of the Analytical Flaws and Methodological Shortcomings of the CFPB’s Survey of Consumer Experiences with Debt Collection,” by ACA International, the association of credit and collection professionals.
On Jan. 12, 2017, the CFPB released the report “Consumer Experiences with Debt Collection: Findings from the CFPB’s Survey of Consumer Views on Debt,” to provide the results of a CFPB survey on consumers’ experiences and preferences related to debt collection. However, ACA’s new white paper finds that the CFPB’s report, based on a flawed survey instrument, fails to provide critical context for its findings and a clear analysis of the data.
“The CFPB proceeded with conducting the consumer survey on debt collection experiences despite its obvious flaws – flaws which ACA International called to the CFPB’s attention nearly three years ago. The CFPB’s use of data to generalize an entire industry harms legitimate debt collection companies that treat consumers with respect and within the law,” said ACA International CEO Pat Morris.
In the white paper, ACA argues that although the CFPB touts its consumer experience survey data as the “first comprehensive and nationally representative data,” its overall sample of individuals who have been contacted by a debt collector is remarkably small, representing only 682 individuals. Despite this significant limitation, the CFPB continually couches its findings in relation to all American consumers with debt collection experience, which could be construed as incomplete and misleading.
Also, according to the white paper, the CFPB’s report contains several caveats that fundamentally undermine the representativeness and overall quality of the data. For example, the report acknowledges that no conclusions about the statistical significance between group differences can be drawn, a crucial fact that severely limits the usefulness of the data and one that was conspicuously absent in the CFPB’s press release on the report.
“The data obtained by the CFPB through the consumer survey is insufficient at best and fundamentally flawed at worst. As a result, the survey data cannot be used as the basis to properly inform the Bureau’s debt collection rulemaking efforts,” ACA International Director of Research Josh Adams, PhD, wrote in the white paper.
Consumers, creditors, and the economy as a whole benefit from the existence of the professional debt collection industry. A previous ACA International white paper “The Role of Third-Party Debt Collection in the U.S. Economy” (published in January 2016) emphasized how third-party debt collectors work in tandem with creditors and consumers to ensure that much-needed credit is widely accessible.
ACA International’s research initiatives aims to collect more original data about the credit and collection industry. The goal of this exclusive research and analysis is to continue to quantify the ways that debt collectors help consumers and the overall economy.
ACA International (ACA), the association of credit and collection professionals, is the largest membership organization in the credit and collection industry. Founded in 1939, ACA brings together third-party collection agencies, law firms, asset buying companies, creditors and vendor affiliates, representing tens of thousands of industry professionals. ACA produces a wide variety of products, services and publications, including educational and compliance-related information; and articulates the value of the credit and collection industry to businesses, policymakers and consumers. www.acainternational.org.