Consumer complaint received 2025-06-25 00:00:00
Product: Debt collection — I do not know
Issue: Took or threatened to take negative or legal action — Threatened or suggested your credit would be damaged
Company: Affirm Holdings, Inc
State: LA

Complaint narrative:
Dear Consumer Financial Protection Bureau, I am submitting a formal complaint against Affirm , Inc., due to their unfair and impersonal handling of a past-due balance under {$25.00}, which was unnecessarily sent to a collections agency without my prior knowledge or an opportunity to resolve the matter directly.

Here are the key issues I would like to raise : 1. Automated and Premature Escalation to Collections : On XX/XX/year>, I attempted to make a payment for a past-due balance on my Affirm account, only to be told that the payment could not be processed due to system issues. Despite this, I was informed that my account was already sent to a collections agency. Even for such a small debtunder $ XXXXAffirm chose to escalate the matter to collections without notifying me or offering me a chance to resolve it directly. This decision highlights a broader issue within the industry, where companies send small debts to collections agencies, incurring additional fees. Studies indicate that businesses, particularly in the consumer finance sector, often escalate debts as low as {$25.00} to collections, even when it may cost more in agency fees than simply working with the customer to resolve the debt. 
2. Lack of Notification and Communication : I was never notified about the overdue payment prior to it being sent to collections. Data shows that 35 % of consumers report not being informed about overdue balances until they are sent to collections, leaving consumers with little room to address the issue before it escalates. Had I been properly notified, I would have made the payment promptly and avoided this unnecessary escalation. 
3. Automation Over Customer Service : Affirm 's decision to automate the entire processwithout offering any room for human interventionhas led to an impersonal and unfair treatment of my situation. It appears that Affirm is prioritizing automation for the sake of efficiency, at the expense of real customer service. Studies from XXXX XXXX XXXX show that companies that combine automation with human interaction see higher satisfaction rates and more effective problem resolution. Affirm 's reliance on an automated system assumes that I was intentionally avoiding payment, without considering the possibility of an oversight, a system error, or technical issues. This impersonal approach feels like exploitation rather than a solution, and it fails to take into account the nuances of each individual situation.

4. Unnecessary Financial Burden : By sending such a small debt to collections, Affirm has incurred unnecessary fees, which, according to the XXXX XXXX, often exceed 50 % of the original debt. This raises the question of why Affirm did not give me more time or flexibility to resolve the matter directly. The financial burden on both Affirm and me is unnecessary, especially when the debt was so small and easily addressable. 
5. Loss of Trust and Erosion of Customer-Centric Practices : The automated escalation process undermines the trust that should exist between customers and the companies they do business with. Studies show that customers who experience impersonal, automated debt collection are more likely to feel mistreated by the company. By prioritizing a machine over human interaction, Affirm reduces customers to mere data points, which, in turn, contributes to the erosion of consumer trust. When businesses emphasize efficiency over empathy, they create a system where the customer 's dignity and context are disregarded. This automated system is not designed to help resolve issues but rather to escalate them to collections as quickly as possible.

6. The Power Imbalance Between Humans and Machin
es : The underlying issue here is not just about efficiency but about the growing power imbalance between technology and human beings. Affirm, a company that still employs humans, has allowed its automated systems to make decisions that greatly impact consumers ' financial well-being, without human intervention. In many cases, businesses that prioritize automation over human judgment end up causing more harm than good. The irony is that the very technology that was supposed to streamline processes and make things easier is now creating a system that punishes consumers who slip through the cracks, rather than helping to resolve their issues.

Given the nature of these issues, I believe Affirm 's practices are unfair, impersonal, and detrimental to consumers. Therefore, I am requesting that the CFPB : 1. Investigate Affirm 's practices surrounding the automatic escalation of small debts to collections, particularly the lack of human intervention and notification.

2. Review Affirm 's debt collection policies, especially regarding their use of automated systems, to ensure that they align with fair debt collection standards and protect consumers.

3. Consider issuing guidelines for companies like Affirm on how to balance automation with human judgment, so consumers are not left at the mercy of machines.

I hope the CFPB will take swift action to ensure that consumers like myself are not unfairly burdened by an automated system that lacks the empathy and flexibility necessary to resolve such minor issues. Thank you for your time and consideration of this matter. I look forward to your response. 
Sincerely, XXXX XXXX

Company response to consumer: Closed with explanation