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1.3.1.8 Debt Collection and Consumers with Limited English Proficiency

As the demographics of the United States evolve, the number of U.S. residents for whom English is not a first language and who speak English with limited proficiency has increased dramatically. In 2015, approximately 25.9 million individuals, some nine percent of the U.S. population, were considered limited English proficient (LEP).131 Limited English proficient refers to anyone above the age of five who reported speaking English less than “very well,” according to the U.S. Census Bureau.132

LEP individuals use financial products and services, but those who are not proficient in English have greater difficulty navigating the marketplace and resolving challenges when they arise. Borrowers facing delinquency and default too often face an English-only system, creating additional barriers to responding to debt collection efforts and overcoming financial distress. The CFPB’s survey of consumer experiences with debt collection showed that only 79% of consumers contacted about a debt in collection were able to communicate in their preferred language.133

The joint FTC-CFPB Debt Collection and the Latino Community Roundtable in October 2014 highlighted debt collection challenges in LEP communities.134 Participants reported that LEP debtors tend to be less likely to challenge any representations made by a debt collector, including the amount owed.135 In addition, translation issues result in problems, such as LEP debtors believing that a caller from a “debt collection agency” is in fact from a government agency. Even when translated documents are provided, they may only be partially translated, failing to provide meaningful access while also concealing key facts about the situation.136 CFPB137 and FTC138 enforcement actions have also highlighted abusive debt collection practices targeting LEP consumers.

In 2013, about twenty-five percent of LEP individuals lived in households with an annual income below the official federal poverty line—nearly twice as high as the share of English-proficient persons.139 Because LEP populations tend to experience poverty at much greater rates, they also are likely to face greater challenges paying their debts as discussed in § 1.3.1.4, supra.

Footnotes

  • 131 U.S. Census Bureau, 2010–2014 American Community Survey 5-Year Estimates, American Community Survey Table B16001 (U.S. Census Bureau) (approximately five-sixths (83.4%) of all LEP residents speak one of eight languages: Spanish, Chinese, Vietnamese, Korean, Tagalog, Russian, Arabic, and Haitian Creole. About 64% of the LEP population speaks Spanish, followed by Chinese, spoken by 6% of the LEP population).

  • 132 Id.

  • 133 Consumer Fin. Protection Bur., Consumer Experiences with Debt Collection: Findings from the CFPB’s Survey of Consumer Views on Debt (Jan. 2017), http://files.consumerfinance.gov (the CFPB did not release the data for responses to the question “Is English your preferred language?”).

  • 134 A video of the roundtable (as well as a Spanish language transcript) is available at www.consumerfinance.gov.

  • 135 Id.

  • 136 Id.

  • 137 Consumer Fin. Protection Bur., Consent Order, In the Matter of American Express Centurion Bank and American Express Bank, FSB (Aug. 23, 2017) (respondents did not make the same collection offers available to customers with Spanish language preferences that they did to consumers who did not express a Spanish language preference).

  • 138 FTC v. Centro Natural Corp., No. 14-23879-CIV (S.D. Fl. Oct. 20, 2014) ($1.5 million judgment against an abusive debt collection operation that targeted Spanish and English speakers, along with a complete ban on debt collection activity and other injunctive relief), complaint available at https://www.ftc.gov; FTC v. Rincon Mgmt. Services, L.L.C., No. 5:11-cv-01623-VAP-SP (C.D. Cal. Mar. 26, 2014) (monetary judgment of over $23 million against an abusive debt collection operation that targeted Spanish and English speakers, along with a complete ban on debt collection activity and other injunctive relief), complaint available at https://www.ftc.gov; FTC v. RTB Enterprises, Inc., No. 4:14-cv-01691 (S.D. Tex. June 19, 2014) (monetary judgment of $4 million against abusive Texas-based debt collector that targeted Spanish and English speakers), complaint available at https://www.ftc.gov.

  • 139 Jie Zong and Jeanne Batalova, The Limited English Proficient Population in the United States, Migration Policy Institute (July 8, 2015), available at www.migrationpolicy.org.