2014 Data Shows Overall Rise in Debt Collection Lawsuits

For the first time this year, litigation surrounding the Fair Debt Collection Practices Act increased from one month to the next, but Telephone Consumer Protection Act and Fair Credit Reporting Act litigation decreased compared to the prior month, according to the latest data from WebRecon. However, when comparing data from June 2014 to June 2013, litigation for all three of these statutes is on the rise.

From June 1-30 2014, data shows that plaintiffs filed 806 FDCPA lawsuits, 169 FCRA lawsuits and 207 TCPA lawsuits. This means that in June 2014, FDCPA lawsuits increased four percent compared to May 2014. TCPA and FCRA lawsuits decreased 4.3 percent and 21.9 percent, respectively, compared to May 2014.

However, when conducting a previous year comparison, FDCPA lawsuits are up 15.8 percent, FCRA lawsuits are up 12.4 percent and TCPA lawsuits are up 46.9 percent compared to June 2013.

In year-to-date comparisons, FDCPA lawsuits are down 13.5 percent compared to 2013. FCRA and TCPA litigation, however, is steadily increasing, despite a few months of shaky numbers. FCRA lawsuits are up more than 11 percent compared to last year. But the big difference is in TCPA litigation. In 2014, it has increased 34.4 percent compared to the previous year. At this rate, it’s becoming increasingly clear that TCPA is poised to become the second most-litigated statue in the debt industry.

Meanwhile, at the CFPB complaint database, complaints against debt collectors had a stronger month, with more than 3,000 consumer complaints filed in June 2014. That number is expected to rise as more data is made publicly available. We’re now more than halfway through 2014, and the CFPB complaint portal has received more than 20,000 consumer complaints about debt collection; that breaks down to more than 100 complaints per day.

These statistics shouldn’t scare debt collectors. They should serve as motivation. This is an opportunity for collection agencies to be proactive in their response to the industry’s new legal landscape.

Get the most up-to-date data on courtroom and complaint trends in next week’s webinar, insideCompliance: Decoding Litigation Data in 2013. Learn how to use data to fill any compliance gaps and protect your agency from potential lawsuits. Jack Gordon of WebRecon literally wrote the book on debt industry litigation statistics; he will provide in-depth data analysis and forecasts. John Bedard of Bedard Law Group will explain how the data impacts your compliance obligations. You’ll have the chance to ask Mr. Gordon and Mr. Bedard questions during the live Q&A portion of the webinar. It’s an event you won’t want to miss!