Curbing Collections Complaints: Simple Fixes to Reduce Customer Dissatisfaction

Debt collection complaints accounted for 7% of more than 1.6 million customer complaints fielded by the CFPB in 2023. Over the years, many solutions were developed to curb collections complaints. But four simple actions are typically at the core of reducing complaints. See the detail in this blog on how each action can contribute to a reduction in complaints.

Customer-facing businesses regularly field complaints—it’s simply a part of day-to-day activities. The debt collection industry knows about complaints better than most. Just look at the Consumer Financial Protection Bureau’s (CFPB) annual complaint report from 2024.

The Bureau fielded more than 1.6 million customer complaints in 2023 – with over 7% relating to debt collections (the second most common complaint topic for that year). These complaints spanned almost all debt types with the 3rd largest (23%) were received related to credit card debt.

Take 4 Simple Steps to Curb the Volume of Complaints

Some complaints in collections are inevitable. Even the most professionally executed collection call or most skillfully written collection letter could result in a customer complaint.

We also know it is impossible to reduce your overall complaint volume to zero. Attempting to get to a zero-complaint environment would require high levels of expended effort with disappointing results. Zero complaints is unachievable.

Instead, place your focus on these four areas that have the highest probability of influencing complaint volumes:

Customer Interaction Training
Collections Correspondence
Digital Engagement
Dialer Configurations

1. Customer Interaction Training

Don’t Forget About the Soft Skills to Show Customers They’re Important

Being a collector is not an easy job. Most days you face complex system navigation, complex financials and difficult discussions with customers. Collections training tends to spend a significant amount of time focusing on the hard skills (e.g., system navigation, financials, compliance).

But very little training time covers the soft skills that can sway conversations in a positive direction. Robin Williams once said, “Everyone you meet is fighting a battle you know nothing about. Be kind. Always.” This quote can be used to describe effective collections efforts.

Many of the most common debt collection complaint reasons from the 2024 CFPB response summary could have been avoided had the collector approached the interaction with kindness and empathy.

Common Reasons for Debt Collection Complaints

Attempts to collect debt not owed
Took or threatened to take negative or legal action
False statements or representations
Threatened to contact someone or share information improperly

Many might think that empathy can’t be taught. But agents can learn empathy from collections training covering three key elements:

Success profiles and behaviors
Call modeling to recognize triggers and investigate root cause
Practice and ongoing coaching

When taught properly these behaviors will enhance collectors’ ability to listen and communicate with the customer. Customers that feel heard, and are treated with empathy, rarely complain about that interaction.

2. Collections Correspondence

Regain the Lost Art of Letter Writing so Your Communications Drive Responses

A Chinese proverb says, “Never write a letter while you are angry.” But when looking at some collections correspondence, you might think most were drafted while angry.

The second highest driver of CFPB debt collection-related complaints was due to “written notification about a debt.” You’d have to scour the CFPB’s complaint database to unearth the exact driver behind this reason. Yet, it is likely that many of these 12,400 “written notification” complaints can be tied back to poorly written collection letters.

As a key component of collection efforts, letters (whether sent via physical mail or email) must be properly written to be effective. Just like an agent conveys empathy in a collection call, a letter can as well. Letters should refrain from accusatory or inflammatory language and should instead extend a helping hand to the customer. They should also provide multiple options for customers to either speak to an agent for assistance or self-serve to cure their debt.

Good business writing practices dictate to write at an 8th grade level, striking a balance between simplicity and providing sufficient detail. Avoid using long cumbersome words or those that may not be understood. A letter written with too much complexity risks making a customer feel like they are being talked down to. While a letter written too simply risks making a customer question the competence of the sending institution. Pay particular attention to spelling and grammar. Misspellings and poorly constructed sentences can affect the customer’s perception of the institution’s competency.

Lastly, treat letters like any other official business document and include them in an annual review and approval process. Just like a procedure requires updates over time, so do letters.

3. Digital Engagement

Get Results by Communicating on Their Terms

If not doing so already, you should begin introducing new digital capabilities to your collections operations. The traditional collection methods of calls and mailed letters do not generate enough results in today’s age of digitally savvy customers.

Today’s generation prefers to engage digitally via text, email, chat and other online/mobile app communication methods. As a matter of fact, according to a Forbes Advisor article, 78% of Americans prefer to bank digitally.

If you redirect collections efforts to text, email or mobile app communications, customers can interact on their terms, and when it is convenient for them. You remove the “embarrassment factor” that customers might experience when having to verbally discuss personal issues with collectors.

Regardless of what actions you take related to digital engagement, be sure to run everything by your Compliance & Legal areas before deployment. With the CFPB’s debt collection rule clarifying certain FDCPA prohibitions, you’ll need controls in place to safely and compliantly deploy digital communication methods.

4. Dialer Configurations

Don’t let Dialer Tactics Drive Complaints

Dialer technology has significantly advanced over the past decade. Many now come with fully equipped, configurable compliance modules that aid in ensuring adherence with a vast array of calling restrictions and requirements.

Even with this technology, 7% of the CFPB debt collection related complaints were due to “communication tactics,” with common sub-reasons being:

Harassed by repeated phone calls
Calls during inconvenient times
Calls to inconvenient places
Calls outside of permitted hours

Compliance modules, in almost all cases, can manage these common concerns with simple call counter controls, call window calculations and call preference capture.

When using calling as the collections contact channel, why call customers repeatedly at times they don’t want to be called and at places or numbers they don’t want to be used? Calling them at the times and places they prefer does not guarantee a right party contact. But it significantly increases the chances of connecting and having a meaningful interaction.

Tweak the Complaints Recipe to Work for You

Any successful recipe goes through countless iterations and tweaks before the final dish is composed; and even then, it may not be enjoyed by all patrons. Similarly, there is no perfect recipe to solve complaints for all institutions. Any solid complaints process starts with a core construct and is then continuously modified to ultimately land on the perfect recipe to fit the need.

Cooking competition hosts tell their contestants, “Put your spin on this classic dish.” You can take the same approach by using these simple complaint fixes as the classic dish and putting your institution’s spin on it to meet your goals and suit your customers’ needs.