An alarming increase in debt collection agency harassment complaints by U.S. military service members has raised concerns about national security. According to an independent analysis of data from the Consumer Financial Protection Bureau (CFPB) conducted by BadCredit.org, a leading resource for credit-related information, the situation demands attention.
Key Findings:
- Rising Complaints: Last quarter witnessed a 24% nationwide surge in debt collection agency complaints filed by service members. Of particular concern were attempts to collect on “debts not owed,” which spiked by 40%.
- Sharp Increase: The number of debt collection harassment complaints by service members against debt collection agencies skyrocketed from 1,360 in Q4 2023 to 1,833 in Q1 2024.
- The Full Report: The comprehensive Military Debt Collection Agency Harassment Report, recently released, features insights from the Federal Trade Commission, Consumer Financial Protection Bureau, and U.S. Department of Defense officials.
- State-Level Trends: The report includes a state-by-state breakdown of complaints, highlighting the most reported debt collection agencies and top harassment issues.
State-Specific Trends:
1. California
- Highest Complaint Spike: California, often considered consumer-friendly, experienced an alarming 188% increase in debt collection agency complaints from Q4 2023 to Q1 2024. With 157,367 military personnel, it remains the most populous state for active-duty service members.
2. Texas
- Second-Largest Increase: Texas saw a 66% jump in debt collection complaints during the same period. The U.S. Department of Defense reports 111,005 service members stationed in Texas, making it the third-most populous state for active-duty military.
Fair Debt Collection Practices Act (FDCPA):
- Top Offenders: Resurgent Capital Services, a subsidiary of collection giant Sherman Financial Group, topped the list of harassers. CL Holdings, the parent company of debt-buyer Jefferson Capital Systems, closely followed. Publicly traded Portfolio Recovery Associates [NASDAQ: PRAA] faced penalties for deceptive practices.
- Credit Card Subsidiaries: The report lists the credit card subsidiaries associated with these debt collection agencies, providing valuable information for active-duty service members and relevant policy agencies.
Methodology:
- The study sourced data from the Consumer Financial Protection Bureau (CFPB) complaint database, specifically targeting complaints filed by U.S. military service members. Entries lacking essential details were excluded to ensure reliable analysis.
