The Federal Trade Commission received more than 2 million consumer complaints in 2012, according to its newly released Consumer Sentinel Network Data Book. The report provides national and state-by-state data on consumer complaints received by the FTC in that year.

Last year marked the first time the total number of complaints to the FTC exceeded 2 million, reflecting a nearly 9 percent increase from 2011. The top three complaint categories consisted of identity theft (369,132 complaints, or about 18 percent of the total), debt collection (199,721, or about 10 percent), and banks and lenders (132,340, or about 6 percent).

The Consumer Sentinel Network is an online database of consumer complaints maintained by the FTC. Other federal and state law enforcement agencies contribute to the database, including the Consumer Financial Protection Bureau and the offices of 14 state attorneys general. Private-sector organizations contributing data include all Better Business Bureaus in the United States and Canada.

Any federal, state, or local law enforcement agency can obtain access to the database by entering into a confidentiality and data security agreement with the FTC. In addition, certain international law enforcement authorities are allowed to access the database.

While the data only reflects “unverified complaints reported by consumers" without regard to merit, the report nevertheless has the potential to significantly affect the industries targeted by the complaints. The FTC and state attorneys general have long used consumer complaints to identify victims and potential targets for investigations, and the Consumer Financial Protection Bureau has similarly begun to consider complaints in prioritizing which companies to investigate. For example, the CFPB has cited the FTC’s high volume of debt collection-related complaints as a reason for its focus on the debt collection industry. (The FTC's data includes complaints received by the CFPB through its own complaint system.)

Since industries receiving a large number of complaints are more likely to draw a regulator's attention, minimizing the number of consumers who complain to the FTC, CFPB, or other consumer watchdogs is an essential first step to reducing potential exposure. To preempt as many complaints to regulators as possible, it is important for companies to establish their own systems to track and resolve complaints. Indeed, the CFPB's examination procedures specifically instruct examiners to assess the quality of a company's system for receiving and dealing with complaints.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). Members of the Group are helping companies, including debt collectors and debt buyers, prepare for their first CFPB examinations.

For more information, please contact Practice Leader Alan S. Kaplinsky at 215.864.8544 or, John L. Culhane, Jr., at 215.864.8535 or, Collection Documentation Task Force Chair Christopher J. Willis at 678.420.9436 or, Glen P. Trudel at 302.252.4464 or, Stefanie H. Jackman at 678.420.9490 or, or Heather S. Klein at 215.864.8732 or

Copyright © 2013 by Ballard Spahr LLP.
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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.


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