The Top Consumer Complaint of 2010…and the winner is…

Mar
9
2011

Identity theft is once again the top consumer complaint in 2010, per the Federal Trade Commission.  But, debt collector complaints are on the rise and they’re closing the gap going from 119,000 complaints in 2009 to over 144,000 in 2010.  The rise in debt collection complaints isn’t a surprise considering the amount of defaulted debt that has been purchased by debt collectors over the past 24 months.

In 2010 ID theft complaints represented 19% of the FTC’s complaints with debt collection at 11%.  The gap between the two has narrowed from 2009 when ID theft represented 21% and debt collection represented only 9%.  The increase in debt collection complaints is validated by the fact that roughly 12,000 FDCPA (Fair Debt Collection Practices Act) lawsuits were filed in 2010, a record number that we’re on pace to match in 2011.

Interestingly, the number of credit bureau related complaints went from 31,629 in 2009 to 28,724 in 2010 and the number of credit repair complaints went from 41,448 to 31,726.  The FTC continues to lump credit repair with advance fee loan services despite the two having nothing to do with each other.   The actual number of credit repair complaints is likely much lower, which contradicts the agency’s stance that credit repair is a scam.

Credit card complaints are down from 45,203 in 2009 to 33,258 in 2010.  This seems to confirm that the CARD Act has had some success in curbing the more abusive credit card practices, such as retroactive rate increases, fee harvester credit cards and aggressive marketing to young consumers who don’t have the ability or wherewithal to manage credit card accounts.

Not everyone is pleased with the findings though and my point about lumping together credit repair with advance fee scams isn’t the only such “lumping” concern.  On March 9th the ACA (The Association of Credit and Collections Professionals) released a statement saying, among other things, that the “FTC data tells an incomplete story.”  They point out 3 flaws in the results;

  • First, the complaint data is actually comprised of both inquiries and complaints, meaning there is no regard for whether the consumer is contacting the FTC with a question or a legitimate complaint.

  • Second, the FTC does not verify whether each complaint is actually illegal or a violation of the Fair Debt Collection Practices Act (FDCPA), or whether the complaints were resolved. What rarely gets shared is, that when given the opportunity, debt collectors resolve complaints they receive. According to the Better Business Bureau, debt collectors resolve 85 percent of the complaints received against them-significantly higher than other industries.

  • Third, the debt collection data in this report lumps together first-party (creditors who own and collect the debt) and third-party debt collection (businesses contracted by creditors to collect debt on their behalf), which creates an incomplete portrait of consumer complaints.

Let the debate over the FTC results continue…

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.

Comments

  • Dave
    September 12, 2011

    My Cadillac Escalade EXT was taken to the Capital Cadillac Dealership earlier this summer and was held almost 5 days to put a fuel pump on the truck. The labor hours to complete this type of job is less then 4 hours. Then my Service Stability light came on and the technician on checked out the truck on 9-2-2011 determined that the pressure switch needed to be changed out to resolve the problem. The part was ordered that afternoon and the technician indicated, “the part would be available on the following Tuesday which was 9-6-2011. Then Capital Cadillac Service Mgr Metric and Mgr King stated on 9-7-2011, “the part wouldn’t be available until 9-8-2011”. I went to a similar web address that the Mgr’s went to and found the part on 9-2-2011 and didn’t order the part because the Greenbelt Capital Cadillac indicated, “they would have the part in on 9-6-2011 and my truck would be repaired on that day”. That never happened and the Greenbelt Capital Cadillac damaged my Stability System and are trying to make me pay for the damages in which they caused to the stability system and they were just suppose to change out a switch for less then a $100.00. Now those very same Mgr’s are saying it’s going to cost me now $1,700.00 to change out the Service Stability System in which never needed to be changed out until after they broke off the switch in the system. They are attempting to over charge me for a 2nd time even after I had a fuel pump changed out for $1,300.00 and every mechanic I have spoken with regarding those repairs said they overcharged me for installing that fuel pump. This appears to be a common them at Capital Cadillac in Greenbelt, MD of overcharging customers for labor on vehicles that doesn’t match the labor rate standard of Maryland. I would appreciate it if you could follow up with Capital Cadillac regarding them over charging me for work on my truck prior to this incident, damaging a major part on my vehicle to charge me extra for a new Service Stability System, holding my truck and not knowing when exactly the parts to repair my vehicle were going to come in, bad customer service which consisted of ignoring my requests to do things to my vehicle on several times to speed up the process of repair? The Mgr King continued to over talk me on several different times during several phone conversations and that isn’t the way you handle business I would assume. I have filed a complaint against those Mgr’s and a Service Representative Shereace from the dealership on 2 separate times. Doesn’t seem as though issues have been resolved by the Cadillac Corporate Office in which I initially filed the complaints with. This last incident they dealership has held my vehicle for seven days come tomorrow 9-8-2011. I would like to know why it would take more then 7 days to repair a simple pressure switch? I’m sure if I have encountered this problem of over charging that other citizens may have encountered the same situation. Mgr. King stated today that, “Capital Cadillac in Greenbelt, MD would never service my 2002 Cadillac EXT again!!!! The EBCM on the truck never needed to be changed out but I was told initially that i would have to pay $1,700+ to get my truck repaired. The truck never needed the EBCM changed out on the truck for $1, 700+ as the manager advised me. They had my truck for 10 Days!!!!!!!!!

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