One of the great unknowns about the coronavirus pandemic has been wondering what impact it would have on the credit and collection industry. We have seen a lot of the fallout, in terms of states that have enacted emergency regulations that have impacted operations and companies that have been forced to close or lay off portions of their workforces. But the industry has also ben looking at consumers and wondering how they would handle the crisis. Well, thanks to data from the Consumer Financial Protection Bureau, some of that picture is now coming into focus.
Consumers set a record in April for the highest total of complaints submitted to the CFPB since the agency started taking complaints n December 2011, according to a published report. The 42,774 complaints that were filed by consumers in April is the most ever that the agency has received during one month and was 15% higher than the number of complaints that were submitted in March, when the pandemic began to shut down the country and its economy.
Most of the complaints, according to the report, involved consumers unhappy about their mortgages or credit card debt, but there were also a lot of complaints from consumers who are having difficulties paying their bills or understanding the economic relief programs that are being made available.
“There’s a real need [to ensure Americans receive] good information so they’re not confused, so they know what their rights are and they know what questions to ask when they get on the phone with their creditor or their lender,” said Kathleen Kraninger, the CFPB’s director, according to the report.
At the same time, a number of U.S. Senators have written a letter to Kraninger, calling out the CFPB for not doing enough during the COVID-19 pandemic to protect consumers. The Senators, including Sen. Sherrod Brown [D-Ohio], the Ranking Member of the Senate Banking Committee, and Sen. Elizabeth Warren [D-Mass.], want the CFPB to label it a unfair, deceptive, or abusive practice for collectors that attempt to seize or garnish the economic stimulus payments being made to individuals, and for collectors that initiate or pursue collection lawsuits “during the pandemic when consumers cannot defend themselves.”
