If a representative from your collections department is trying to find the person who is behind on their vehicle retail installment sales contract, a reasonable chance exists that other organizations are seeking the whereabouts of that individual, too, because of a debt issue.
The newest report from the Consumer Financial Protection Bureau showed that more than one-in-four consumers with a credit report have at least one debt in collection by third-party debt collectors.
The report, which covers 2004 to 2018, is drawn from the bureau’s consumer credit panel (CCP), a nationally representative sample of approximately 5 million de-identified credit records maintained by one of the three nationwide credit reporting companies. Officials said close to 900 third-party debt collectors furnished collection tradelines in the CCP.
The CFPB explained a tradeline is information about a consumer account that is sent, generally on a regular basis, to a credit reporting company. Tradelines contain data such as account balance, payment history, and status of the account.
The bureau reiterated its findings revealed that more than one-in-four consumers (28%) with a credit report in the CCP in 2018 had at least one third-party collections tradeline on their file.
The study also found that more than three-out-of-four third-party collections tradelines are for non-financial debt. More than half (58%) of these tradelines are for medical debt and another 20% for telecommunications or utilities debt.
Positive payment information is generally not furnished for medical or telecommunications debt, according to the CFPB.
The bureau pointed out that banks and other original creditors may collect their own debts or hire third-party debt collectors. In some instances, the original creditors may sell the debts to debt buyers. The buyers may try to collect on these debts, or hire other third-party debt collectors.
There are approximately 9,330 debt collectors and debt buyers in the United States, according to the CFPB.
The complete report can be downloaded here.