September 27, 2015Denver, Colorado

An Industry Perspective

2015 NACARA Annual

Conference

SpeakersDebra Ciskey

Compliance Officer, Wakefield and Associates

ACA International Board of Directors

David Cannella CEO, Credit Service Company, Inc.

Associated Collection Agencies, Inc. (CO, WY, NM Unit)

Andrew MaddenDirector State Government Affairs, ACA

International

 

• Education, Advocacy & Member Service

• Offices in Minneapolis and Washington, D.C. • Third-party collection agencies, law firms, asset buying

companies, creditors and vendor affiliates, representing more than 230,000 industry employees

• 40 State Units (50 states)

• One International Unit (60+ countries)

ACA International

Failure to Recover Consumer Debt

• Higher Taxes

• Government Budget Shortfalls

• Business Closures

• More Layoffs

• Higher Prices for Consumers

• Less Available Consumer Credit

Vital to Economic Health

Paid $2.6 Billion in

Taxes

Provided 136,110

Jobs

Recovered $55.2 Billion in 2013

Gave $130 Million in Charity

Third Party Debt Collection

http://www.acainternational.org/economicimpact.aspx

Economic Impact Study

• Conducted by Ernst and Young

• Surveys the Impact of Third-Party Debt Collection

• Get Your State and National Data

Taking Complaints Seriously

Debt collection is a consumer relations based industry.

Third-party consumer debt collectors make approximately one billion contacts to consumers per year.

The CFPB Annual Report on the Fair Debt Collection Practices Act (“FDCPA”) stated that 77 million individuals had a debt that was subject to the collections process in 2014

During that time, 88,300 complaints were filed with the Bureau regarding debt collectors.

Based on this data, in 2014, over 76.9 million Americans with debts in collections did not file complaints.

This means that the percentage of consumers who filed complaints with the Bureau was approximately one tenth of 1% of all consumers with debts in collections.

FCC Declaratory Ruling on the TCPA

In January 2014, ACA filed a Petition for Rulemaking with the FCC asking for clarification of the TCPA

Clarify that just because a predictive dialer CAN be an Automatic Telephone Dialing System, not every predictive dialer MUST be an ATDS covered by the TCPA

Confirm that “capacity” means the “present ability” of the dialing system

Prior express consent should attach to the person incurring a debt, not the wireless number

Establish a safe harbor for “wrong number” calls

FCC Ruling Highlights

Autodialers: “Capacity”

The capacity of an autodialer is not limited to its current configuration but includes its potential functionalities, i.e. its future ability to be modified to have the requisite capacity

All predictive dialers are categorically an ATDS, regardless of whether they possess the statutory elements at the time a call is made

Manual dialing raises concerns if the equipment that is being used to manually dial could theoretically be modified to be an ATDS

 

Consent: Reassigned Numbers

Interprets “called party” as the subscriber or customary user

Rejects the “intended recipient” approach

Callers now have a one attempt to gain actual or constructive knowledge of reassignment

ACA’s Response

On July 10, ACA International filed a suit in

the United States Court of Appeals for the

D.C. Circuit seeking judicial review of the

Federal Communications Commission’s

Declaratory Ruling and Order Adopted on

June 18 on the Telephone Communications

Protection Act.

Consumer Education

Ask Doctor Debt website launched in 2009

Target audience = general consumers

Content constantly reviewed to reflect changes in regulations and consumer needs

Re-brand scheduled for 2015/2016 www.askdoctordebt.org

Create the Online Consumer Debt Knowledge Center

Number of Percentage of Employees all U.S. ACA members

1 – 25……………..….……………….…..….77%

25 – 99 …………..…..………………………. 17%

100+ ……………………………...………….. 6%

Collection Agencies by size (ACA members only)

A Diverse Industry

Cost of Compliance

Can be directly related to the volume of consumer contacts and whether the agency is a

data furnisher.

Responding to direct disputes and eOscar disputes

FTE(s) to evaluate calls and provide feedback

Complaint investigation and responses

Policy maintenance

Development and distribution of training

Data analysis and reporting

Client interface and training

Complaint HandlingBetter Business Bureau data:

Debt collection ranks 5th in financial services for generating complaints

Dramatic decrease—11% from 2013 to 2014

Debt Collectors resolve 82% of complaints, compared to 78% for all other industries

Causes of Complaints(Unscientific)

No contact prior to credit reporting

Payment of debt did not result in credit deletion

“They call me every day, multiple times per day.”

Prior dispute with creditor

Escalated conversation with collector

CFPB Complaints

163,000 complaints since database started accepting debt collection complaints in 2012

Debt collectors have responded to 90% of complaints

60+ percent of consumers did not dispute responses of debt collectors

Complaints are not verified for accuracy nor indicative of wrongdoing.

The Complaint Process1. Complaint intake occurs: search for the account, secure it from

further treatment

2. Analyze allegations in complaint

3. Compare allegations to treatment history

4. Review all account activity, including collector notes

5. Review correspondence from consumer, if any

6. Review recorded phone calls, if any

7. Seek validation or further information from creditor

8. Determine best avenue to resolve consumer’s complaint

9. Compose response, send to regulator

10. Close loop on issue—depends on outcome of investigation

11. Track complaint and issues, include in next regular analysis

12. Communicate to Executives

Complaint Prevention

Compliance training, monitoring, and feedback

Customer service training and deescalating angry consumers

Positive feedback for well-executed calls, even if they did not result in payment

Resolution does not always = payment

Consumer Education

Provide consumers factual information about the credit reporting process

Make licensure information easier for consumers to locate on your website

Help consumers understand the Do Not Call registry, including that in your state if applicable

Opportunities If your office does not seek complaint responses

from debt collectors, maybe you should

It is in everyone’s best interest to resolve consumer complaints

Complaints give us the opportunity to confirm that our systematic processes are working, and discover processes that may be broken

Dialog with industry members is positive and constructive

Associated Collection Agencies

Established in 1923 A State Unit of ACA International Over 80 members representing Colorado, New Mexico

and Wyoming. We want to be resource for you (tours, meetings, open

dialogue…)

Economic impact of Colorado based

agencies

Returning Assets Gross Revenue: $1.6 B Commission: $303 M Net Revenue: $1.3 B

Providing Jobs Direct Jobs: 3,968 Total Jobs: 6,457

Making Payroll Direct Payroll: $225 M Total Payroll: $389 M

Paying Taxes Direct State / Local: $23.2 M Total Federal: $40.6 M

The Role of the Colorado Collection Agency Board

A 5-member advisory board appointed by the governor to provide advice to the Administrator of the Colorado Fair Debt Collection Practices Act. Members represent the third-party debt collection industry and the public.

The Industry welcomes the opportunity to be a resource.

Need for TCPA Reform

Questions?

Thank You