Effectiveness of CFPB vs. Private Right of Action

“Consumer Financial Protection Bureau vs. Private Right of Action: Effectiveness in Obtaining Financial Relief for Victims of FDCPA Violations”

In March 2015, the Consumer Financial Protection Bureau issued its 2015 report to Congress regarding Fair Debt Collection Practices Act complaints and enforcement actions. In addition, the CFPB reported on its public education initiatives to inform consumers about their rights under the FDCPA.

Lemberg Law reviewed 2014 data on CFPB complaint resolution and lawsuits alleging violations of the FDCPA in federal district court, and concluded that consumers are more successful in attaining monetary relief when exercising their right to sue than when filing a complaint with the CFPB.

Although the CFPB fielded 88,300 complaints, in only 600 instances did the consumer obtain monetary relief. This contrasts strongly with the 9,720 lawsuits filed in federal court during the same period.

Despite gaining monetary relief for consumers in only two percent of complaints forwarded to businesses for response, the CFPB’s “Ask CFPB” public education initiative informs consumers about the CFPB complaint process more than twice as often as it informs consumers about their right to sue debt collectors that violate the FDCPA.

Lemberg Law concluded that providing consumers with more and better information about the FDCPA’s private right of action would likely result in a greater number of consumers obtaining monetary relief.