DBA

DBA WATCH
FTC Debt Collection Workshop: Day 1

OPENING REMARKS:

  • FTC Chairman Majoras emphasized the importance of consumer credit and the benefits of the debt collection industry to the economy.
  • Majoras also described the debt buyers as a recent innovation in debt collection.

THE PANELS:

  • The central theme emerging from all 5 panels was the issue of legal compliance.  Two separate visions of the debt collection universe were presented by the industry and the consumer groups.
    • The industry panelists described collectors’ best efforts at compliance that are marred by a few “bad apples” who engage in abusive practices.
    • The consumer group panelists envision rampant abuses among collectors.
  • A discussion also took shape over the course of the 5 panels seeking to define a social policy for approaching debt collection.
    • The industry panelists took a personal responsibility approach to debt collection practices, taking up the position that consumers commonly express honest contrition at the inability to repay and appreciate an opportunity to work out a settlement or repayment plan.
    • At least one of the consumer group panelists expressed the position that abuses are inherent to the debt collection process.  As such, the consumer group panelists advocated consumer relief from having to respond to collection efforts despite the validity of the debt.
  • The effect of technology on the debt collection industry played a recurring role throughout the panel discussions, including issues arising from increased use of cell phones, predictive dialers, caller ID, email, text messaging and electronic, paperless transactions.
  • Other issues raised:
    • The Need for Guidance / Clarification of the FDCPA to Ensure Compliance
    • Self-Regulatory Practices
      • Positive references were made about recent changes to the ACA Code of Ethics
    • Increased Availability of Consumer Credit (especially to disadvantaged economic groups)
      • Many comments were made about the need for additional financial literacy
    • Productivity Incentives
      • The discussion centered on whether employee compensation contingent on dollars recovered results in increased abusive practices or whether training and monitoring effectively prevents such behavior
    • Abusive Litigation & Attorney Exemptions under the FDCPA
    • Adequate Documentation of Debts for Dispute Resolution
  • Gary Wood, Barbara Sinsley, and Stacey Schacter brought both substance and humor to each of their respective panels.