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posted on 2009-07-29 by Steve Ruderman
was a tough one for the collections industry. Attorney Generals from New York,
Ohio and Virginia all went after collection agencies and collection attorney
firms. Each of these attorney generals claimed that the agencies were violating
the fair debt collections act and even claimed fraudulent activity. The Minnesota AG literally shut down the
arbitration business by closing down the National Arbitration Association’s
credit card arbitration business, which was followed by the American
Arbitration Association backing out of the debt collection arbitration business
as well. AG’s settled with Bank of America on the foreclosure issues with its'
Countrywide subprime division it bought. Even the rental business is not safe.
Rent-a-Center is being accused of illegal collection practices in the state of Washington,
including harassing customers with profanity during collection calls and
scaring children by telling them that their parents would be jailed.
Is it coincidence that all these items are
happening at once or is there a pattern that is being set? Has the Attorney
Generals had enough with the financial services industry or have they figured
out a way to go after an industry that is not popular with the media and has
deep pockets to gain a badly needed revenue source? The states are hurting for
revenue and is our industry the target of a way to increase their revenues? Unfortunately
our industry is a prime target for politicians. Lisa Madigan the AG from
Illinois (who has aspirations of higher offices) has said the worst type of
companies are polluters and collectors. Great, we have been categorized with
those who damage our environment. Let’s face it; we do not work in a user
friendly industry. I spent 10 years working for one of the credit reporting
agencies, when someone heard that I worked there it usually was followed up
with a “you ruined my credit” comment. How often do you get a positive comment
when you say you work in the collections marketplace? “Thanks for collecting
all those debts owed, we know it keeps our rates down!” If you consider that
90% plus of consumers pay their bills on time and have a serious issue in
having to pay for someone else who does not pay their bill. If everybody paid
their bills on time, interest rates would be low and borrowing would never be
an issue.I know I would not want to end
up in court in front of 12 jurors and explain that I think the 12 jurors should
have to pay my bills because I can’t afford to pay my own bills. If a
politician is looking to gain popularity ask them about debt collection
agencies? Regulate them, enforce against them, and never support us publicly.
The fact that our industry is very necessary to recover funds for businesses is
a lost issue.
certainly is not without its faults. We have created this two headed monster
with a lot of bad business moves. Universal default will not go down as a smart
business decision, profitable in the short run, devastating in the long run. There
are rouge agencies out there that do whatever it takes to collect outstanding balances.
And the main stream press loves that. Nothing better than getting a collector
on tape (or better yet film) screaming and cursing at a poor little old
consumer who happens to have the same name as another deadbeat bill dodger.
Overzealous collectors can take your business from profitable to shut down if
they are not closely monitored. You have such a fine line to balance, if you
are overly nice, good luck getting paid. If you are over aggressive, good luck
getting paid and expect an on rush of media, consumer lawyers and politicians.
Taking the approach as a professional is the best approach. You need empathy
for the consumers today, who with the current economic conditions are
completely different than the debt dodgers of the past. Now you have middle and
upper class debtors who have never experienced delinquencies. How you treat
these individuals now, will have a lasting effect on the consumers and our
of self regulation has been tossed around for a while but has recently taken on
a new drive. Let’s face it, if we do not control the industry, the government
will do it. And we all know how successful the government is in regulating an
industry. The hardest part of self regulation will be the breaking of the bonds
and codes that exist about supporting your brethren in the collections industry.
If they are not complying with the laws then turn them in. Let’s clean up our
industry before the government does it. And judging by the number of Attorney
Generals and FTC complaints, it is just a matter of time before regulations
take hold. New York, New Jersey and North Carolina already have pending bills
and more states are looking at new laws.
clean it up now and take out our own trash before the government does it for
Your comments are welcome.
posted on 2009-07-22 by Allen Harkleroad
You just gotta love New York Attorney General Andrew Cuomo. He is a
living legend after my own heart. Too bad the Federal Trade Commission (FTC
refuses to do what Mr. Cuomo is doing, namely protecting US consumers
from illegal and predatory debt collectors. No wonder why President
Obama is so gung-ho about creating a new consumer agency, mainly
because FTC employees sit around collecting government (tax payer
funded) paychecks and lets abusive debt collection companies abuse
One hundred thousand New Yorkers were scammed and almost 7,000 are
from the Rochester area. Now, Attorney General Andrew Cuomo is doing
something about it.
Cuomo says it's the largest debt collection scam he's ever seen and starting today, the victims are being notified.
Cuomo says his office has sued 35 different law firms and two debt
collectors in New York State alone in relation to this scam. Three of
those firms are in the Rochester area. The firms were led by a company
called American Legal Process (ALP) which illegally placing leans and
repossessing people's assets. Read the full story on WHEC-TV
I personally hope President Obama, snatches consumer law issues away
from the Federal Trade Commission and hands it over to an agency that
might actually protect consumers. The FTC has failed consumers time and
time again. Hey, Federal Trade Commission, want to keep your consumer
law enforcement privileges? Then try protecting consumers from abusive
debt collectors. Another words stop resting on your laurels and get
your a$$ to work protecting consumers.
posted on 2009-07-10 by Jerry Greenblatt
Open Letter to All Members
of ACA, International
Fellow ACA Member,
it the role of ACA International to act as an advocate of the Collection
Industry, or to regulate the Collection Industry? Is ACA leadership spending
our money wisely?
am writing this letter as an individual dues paying member of ACA,
International and not as a member of any other association or board, in order
to convey my concerns and questions as to the direction our association is
am concerned with several recent initiatives undertaken by the ACA Executive Committee,
including the association’s recent dues increase, change of fiscal year and
attempt to force individual state units to change their membership year,
reluctance to limit budgetary votes by its Board of Directors to in person
meetings, and its attempt to regulate the collection industry through its own
Dispute Resolution Program and SRO turned Debt Collector Registry.
must first question the dues increase. Last year at the Annual Board of
Directors meeting the budget was presented by ACA Staffand included the $1M purchase and $300K in
refurbishing costs to purchase a office condo in Washington D.C..
60 days of the BOD approving that budget a special telephonic meeting was
called to increase dues. I am quite concerned as to why this increase was not
addressed in an open forum at the in person meeting of the BOD, where members
could have been made aware of the proposed increase and voiced their concerns.
must ask myself: did staff know at that time that the increase was necessary?
If they did not know at that time, why didn’t they know? Most of all, if the
BOD knew a dues increase was necessary, would they have voted for the $1M cash
purchase of the D.C. Condo?
have been unable to ascertain as to where the increased revenue from the dues
increase will be spent. It has been cited that the dues increase is necessary
to bolster reserves, which have not been in compliance since enacted by the
BOD. It appears ACA would have had adequate reserves had they not purchased the
condo. Shouldn’t this have been considered prior to making the purchase in
D.C.? Did ACA consider other alternatives to purchasing the condo for cash?
ACA Leadership Committee has cancelled the Association’s Unit Leadership
Conference citing “financial pressures of the current economy”. Leadership is
already cutting programs while raising dues, due to the economy. Perhaps they
should consider what effect this dues increase will have on us as members.
is a motion to be brought before the BOD next week to roll back the dues
increase. This is not water under the bridge, but an opportunity to correct an
ill informed decision. I encourage you
to contact your National Director and urge them to vote in favor of rolling
back the dues increase.
now move on to the Fiscal Year/Membership Year change, cited by ACA leadership
as necessary because we as members are too confused in dealing with a calendar
and membership year. Leadership also states this will help with approval of the
budget and will alleviate the need for the BOD to take up time considering and
debating the budget at the annual meeting.
my opinion, the primary and most important fiduciary responsibility of the BOD
is the consideration and debate of the annual budget which is approximately $8M
the fiscal year accelerates dues and results in, us as members, paying 19 months of dues in a seven month time
period. What’s worse is paying our dues in December, the worst month for
revenues in our industry.
must ask ourselves, is changing the fiscal year really in our best interest as
members? We will have an opportunity to question this Fiscal/Membership Year
change and why it is really necessary, at the General Membership Meeting next
week. I encourage a no vote on this change.
am equally confused as to why ACA Leadership would be opposed to the idea of
limiting votes and approval of budgetary and fiscal matters to in person
meetings of the BOD, wherefair and open
discussion and consideration can take place, with the benefit of the input of
members like us.
am equally concerned with ACA undertaking the endeavor of administering a
mandatory Dispute Resolution Program/Collector Registry and must question how well
thought out these programs are and how they will affect our industry.
year the dispute resolution program went from being administered by the National
BBB to being administered by a separate entity to be formed by ACA. As
presented it would require an agency’s to consent to a conciliation period and
I as understood it mandatory arbitration to be paid by the collection agency.
The program does not guarantee that it would eliminate traditional remedies such
as law suits available to the consumer but would only add a layer to the mix.
The program also did not guarantee the protection of information acquired
within the Dispute Resolution process which could later be used against the
with the Dispute Resolution Program, the BOD was presented a brief summary of a
proposed Self Regulatory Organization (SRO). It is important to remember that
only a presentation took place and no action was taken by the BOD on the SRO.
a task force was formed and met approximately ten times by telephone conference
and just recently, citing the fear of President Obama’s formation of a new
government entity to protect the financial rights of consumers, theyturned the SRO into a mandatory Debt
Collector Registry. This Registry, to be formed by ACA with our money, will be considered and voted on by the BOD at
the annual meeting next week.
registry as I understand it would require all agencies to register each
collector, and may include finger printing, background checks, testing and on-going
have heard that this registry could add upwards of $10M to ACA International’s
already $8M annual revenues and will not preempt any local or state regulatory
agencies, but will instead only add another layer of government and expense to our
already challenged industry.
many of us do background checks, finger printingand training we are able to do this within a
competitive market and are not limited in doing our pre-employment screening
through ACA, International or some subsidiary it will form.
read an AP article today, Frank backs plan for a consumer protection
agency By ANNE FLAHERTY which it appears the majority of
lawmakers are resistant to the idea and have doubts as to its success.
many of us thought the sky was falling with the enactment of the FDCPA, FCRA,
GLBA, HIPPAA,and other acts and laws
that govern us. We are already regulated by a federal agency, and those of us
that work within the law will most likely not be affected by a new federal
agency if it is even formed to regulate us.
item has been put on the BOD agenda through a placeholder and will be
considered with only a few minutes debate without the benefit of prior review
of its structure, mamangement, feasibility, budget, revenue or affect on the industry,
just as the $1M D.C. condo purchase was voted on last year.
fact is we do not know if and when this new government agency will be formed or
if it will change the regulation of the industry. There is no need to rush a
decision which could have devastating effects on our industry.
smart agency owner once said something to the effect, “I could be shot on the
way into my office, so maybe I should just shoot myself first, before it
happens” This seems to be the approach our leadership is taking on this issue.
have asked the national directors that represent my state unit to either table
the motion to create a National Debt Collector Registry until more information
is obtained and the proper time for debate and discussion is allotted or in turn
vote NO on its formation.
again I ask, should it be the role of ACA to advocate for us or for ACA to
is incumbent on us, as dues paying members to question our leadership and the
direction they are taking our association. Is it really in the best interest of
us as a membership body and our industry.
invite your comments as fellow association members to firstname.lastname@example.org.
663 Greenfield Dr.
El Cajon CA