A new white paper issued by ACA International takes aim at the use of CFPB complaint data by The Alliance for a Just Society in a report titled “Unfair, Deceptive, and Abusive: Debt Collectors Profit from Aggressive Tactics.”

The Alliance’s report concluded that consumer complaints filed with the CFPB “suggest that unfair, deceptive and abusive tactics are prevalent in the debt collection industry.”  In its white paper, ACA observes that as the foundation for this conclusion, the Alliance “relies on the often repeated statistic that debt collection is the most complained about product in the CFPB complaint database.”  ACA comments that, while this statistic is true on the surface, it “fails to contextualize that number of complaints within the full scope and volume of debt collection in the United States.”

For example, ACA states that based on data available through 2010, the debt collection industry makes more than one billion consumer contacts annually.  As a result, ACA observes that while the Alliance reported that the total debt collection complaints in the CFPB database through August 2015 was 74,376, “that number represents just 0.0074 percent of total consumer contacts through 2015.”  The white paper highlights various ways in which the Alliance used CFPB complaint data to make misleading findings by failing to properly contextualize and analyze the data relative to the debt collection industry.

When the CFPB launched its database in 2012, it indicated that its goals in making the data public were to promote public analysis of the data and for such analysis to allow consumers to make informed decisions about financial transactions.  At that time, we noted the need for users of the data to provide contextual information in order for their analysis to be useful to consumers rather than misleading.  In the white paper, ACA similarly comments that “although decontextualized complaint data about debt collection reported by the CFPB seems only to harm debt collectors, the practice can also harm consumers by generating a deep misunderstanding of the role of debt collection companies and depriving consumers of appropriate information to make adequately informed financial decisions.”

In June 2015, the CFPB issued a Request for Information seeking “best practices for normalizing relevant data” in its complaint database.  The CFPB has not yet indicated how or when it intends to move forward on normalization.