DBA WATCH
FTC Debt Collection Workshop: Day 2

SEARCHING FOR CONSENSUS
On the second and last day of its workshop, the FTC emphasized that one of the workshop’s main objectives was to identify areas of consensus between the industry and the consumer groups.  Without resolving differences over specific changes, panelists seemed to agree on two broad areas of reform:

• Debt Verification
• Consensus: establishing a basic set of information that a debt collector should be able to provide to the consumer debtor
• Unresolved: specific types of information to be required; whether the information requirement should vary according to the type of debt; and when the debt collector should be in possession of such information
• Methods of Consumer Communication
• Consensus: developing guidance or providing clarification on the method/manner of reasonable communication permitted between a debt collector and consumers
• Unresolved: how to adapt legal requirements to changing technology; whether consumers get to choose their preferred method of communication and when consumers would provide the communication preference (at the time the debt is incurred or at the time of collection); and who should craft the guidance to the industry: the legislature; the FTC; or the courts.

THE PANELS
The FTC took a “fact finding” approach to the panels during the second day of the workshop.  Each of the panels included an extensive overview of the routine practices and procedures involved in skiptracing, credit reporting, and litigation.  Unlike the more open-ended questions offered by the moderators on Day 1, each overview was followed by more targeted questions seeking specific information about industry custom and usage as well as identification of areas for improvement.  Issues raised during the panels include:

• SKIPTRACING: quantity and quality of information necessary to perform a skiptrace; adequate and reliable sources of information (public and non-public); the need for Social Security numbers as a personal identifier; the problem of misidentification and ID verification
• CREDIT REPORTING: defining a “disputed” account; furnisher reinvestigation following notice from a consumer reporting agency; frequency of reporting; correction of past reporting; multiple trade lines reflecting a single consumer debt; re-aging a date of delinquency
• LITIGATION: garnishment of protected funds; out-of-statute debts; state bar associations as a check against attorney abuses; default judgments; mandatory arbitration

NOTE: The FTC will be accepting written additions to the workshop record through November 9th.