Debt Collection Statistics in the United States

With credit cards, high-interest loans, mortgages, medical expenses, and more, Americans have a plethora of ways to get themselves in the red. As a result, 80% of Americans have at least one debt to their name, according to the Pew Charitable Trusts. And once they are in debt, Americans are hounded by the debt collection industry. Statistics show the scope of the industry, how it operates, and how consumers are affected.

Let’s start by examining the industry itself. In 2017, the 8,513 debt collection agencies in the US made $11 billion, according to IbisWorld. A single debt buyer, Encore Capital Group, Inc., reported that 20% of American consumers have owed it money at some point. However, this wealth does not appear to be making it to the industry’s workers. The Bureau of Labor Statistics (BLS) reported that in 2016, 305,700 people were employed by the debt collection industry, earning an average of $36,020 per year. The number of jobs in the industry is projected to decrease by 3% in the next decade. 

These 300,000 people are responsible for collecting a debt of all kinds. The Consumer Financial Protection Bureau (CFPB)’s put together another important report called the Study of Medical and Non-Medical Debt in December 2014. It showed that more than two-thirds of all debt is associated with utility, health, and telecommunications accounts. Medical collections count for 19.5% of all credit reports.

The CFPB reports that 70 million Americans are contacted by debt collection agencies. 33% of Americans with credit reports had debt collectors after them in 2016. There is also a racial factor at play in debt and debt collection; CFPB statistics show that 45% of people who live in minority-heavy areas were being pursued by debt collectors. 

Debt collectors contact consumers over 1 billion times annually, according to the CFPB. They use a variety of methods to contact debtors, including frequent phone calls. These calls can occur up to 15 times per account per day. This means that if a person owes on multiple accounts, they could receive dozens of debt collection calls per day.

As you may expect, an industry that habitually calls consumers multiple times a day racks up quite a few complaints. In 2016, the FTC Annual Summary of Consumer Complaints reported that up to 29% of the total complaints filed by Americans were related to debt collection. This amounted to a staggering 897,655 formal complaints in a single year.

Who is filing these complaints? A third of debt collection complaints are made by senior citizens who are 62 years and older, most of whom complained that debt collectors pressured them to pay for debts they don’t owe.

Sometimes, debt collectors and debtors pursue litigation against each other. The CFBP conducted a survey that showed that debt collectors sued 15% of the people it contacted. Less than 10% of consumers maintain legal representation in such cases, and many of those lawsuits result in default judgments when consumers do not show up to court, even if there is no evidence to support claims. 

 

Of course, consumers also have the option to pursue legal action against debt collectors. In 2017, WebRecon reported 1,224 consumers sued debt collection agencies for harassment, pursuing debts that the consumer does not owe, and other issues. For consumers who are facing illegal harassment or being charged for debt they did not incur, legal action can be an opportunity to gain some recourse against a massive, powerful industry.

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