CFPB to Mail Debt Collection Surveys to Consumers

The Consumer Financial Protection Bureau Friday issued a public notice and request for comment over a plan to mail surveys to consumers “to learn about their experiences interacting with the debt collection industry.” The CFPB plans to use the survey data to inform its rulemaking process for debt collection, but the timeframe of the survey may push back any new rules.

According to the notice, the survey will ask consumers whether they have been contacted by debt collectors in the past, whether they recognized the debt that was being collected, and about their interactions with the debt collectors. The survey will also ask consumers about their preferences for how they would like to be contacted by debt collectors, opinions about potential regulatory interventions in debt collection markets, and about their knowledge of their legal rights regarding debt collections.

The official entry on the government’s Regulations.gov portal includes a draft of the survey. Right now, the survey consists of 77 questions and runs 14 pages.

A more detailed explanation and plan for the survey is also available. It shows that the CFPB is planning on sending out some 10,000 surveys to randomly-selected consumers that have had accounts in collection. The sample will be taken from the Consumer Credit Panel (CCP), a proprietary sample dataset the Bureau maintains from one of the national credit reporting agencies.  The CFPB is anticipating about 3,400 responses.

The CFPB projects that the total cost of the survey will be around $200,000.

The information collected through this survey will be used to inform a CFPB rulemaking concerning debt collection, and for research purposes.

The CFPB said the proposal for the survey will be subject to a 60-day comment period, which began Friday March 6. Specifically, the Bureau is looking for comments on:

• Whether the collection of information is necessary for the proper performance of the functions of the Bureau, including whether the information will have practical utility;
• The accuracy of the Bureau’s estimate of the burden of the collection of information, including the validity of the methods and the assumptions used;
• Ways to enhance the quality, utility, and clarity of the information to be collected; and,
• Ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.

The CFPB said that it will take between two and three months to execute the survey and collect responses. After that, it will need some additional time to compile the data. In total, the Bureau predicts that it will have a report on the survey ready for public distribution 6-8 months after the survey process begins. It is not known whether this additional time will delay forthcoming debt collection rules.

But the Bureau did give additional clues as to what it is considering for new rules for debt collectors. In the full survey plan, the CFPB wrote:

The Bureau is particularly interested in areas of consumer harm within the debt collection system. To that end, the CFPB is interested in improving the adequacy of information transferred with debts when debts are placed with a collector or sold to a debt buyer. The Bureau would also like to improve the validation, dispute, and verification processes to ensure that consumers are receiving accurate and useful information and have the ability to dispute invalid debts. In addition, the CFPB is considering rules governing communications between collectors, consumers, and third parties, including issues relating to technologies introduced in the 36 years since the FDCPA was enacted. The Bureau may also clarify or expand prohibitions on unfair, deceptive, and abusive acts or practices. Finally, the CFPB may issue rules relating to the collection of time-barred debt, litigation practices, recordkeeping, or registration of debt collectors.

The proposed consumer survey is yet another wrinkle in the impending debt collection rulemaking at the CFPB. insideARM.com is hosting a webinar next week further exploring recent comments to the advance notice of proposed rulemaking and next steps in the process. Sign up today.