The collection process doesn”t stop with your placement

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    Do you have a good procedure in place for reporting payments and providing documentation?

    In the July, 2014 CFPB report on complaints, “The debt was paid” was the second highest reason for complaints.  It was a 10% increase from the previous month.  The top five reasons for complaints all had to do with dispute handling and proper payment processing. http://www.insidearm.com/daily/debt-buying-topics/debt-buying/more-consumers-claiming-debt-collectors-calling-about-invalidpaid-debt/

    During the entire time I have been in the collection industry, I have had to face the reality that some companies and institutions are not always proactive about reporting payments or producing documentation in a timely fashion.  I have been told more times than I would like that a prospect has no real system in place to report payments and that if I want to be notified of direct payments we should send them proof of payment.  This is not always easy to procure and as a result, we have delinquent customers who have, in fact paid the bill and we are erroneously attempting to collect from them.  The traditional collection approach put the responsibility on the shoulders of the debtor to prove they paid the bill.  In today’s litigious environment, it is on the shoulders of the creditor and the agency to prove they do owe the bill.  Access sends numerous follow up emails to clients that frequently go unanswered and sometimes are forced to close an account as a dispute after some period of time on hold.  Now, I know that we are all busy and don’t need any more tasks but not responding in a timely manner puts the creditor and the agency at risk.  If the agency simply closes the disputed account after some period of time without resolution, the account may then get placed as a second with another agency and put 2 agencies and the client at risk even more.  The age old rebuttal to my concern is “Well, my other agencies don’t have a problem with it!  First let me say I am not in the business of making it more difficult for you to do business with me.  I am in the business of making sure my client and our company minimizes exposure to lawsuits and complaints while collecting the highest percentage.   

    Sometimes, these same clients are truly concerned about a “Nice People Collect More” approach and a no-complaint policy with their delinquent customers.  The fact is, they too, have a responsibility in the collection process to respond to agency requests to validate debt requests, provide accurate documentation when requested by the delinquent customer/borrower and make sure payments get credited and reported back immediately to stop all collection efforts or provide us with secure system access to check it for them. 

    There is a new climate brewing in the debt collection community that puts more onus on creditors to verify debts prior to placement and also does not immediately exonerate them from potential exposure in the event of a lawsuit or government action.  Led by the efforts of The Consumer Financial Protection Bureau (CFPB) creditors are now being scrutinized more than ever as the CFPB tries to address every possible aspect of consumer complaints and who is at fault.  The public perception of such issues remain steadfast in its pointed determination to require creditors to take complete responsibility for all their business partners and their processes.

    The reason I chose this topic today was because I read about another collection lawsuit in which the delinquent customer was contacted by the agency, promptly paid the creditor and continued to be contacted after the fact. In the lawsuit, it stated that the collector notated in its’ system that the debtor claimed the debt had been paid but continued to make calls to the debtor after a 2 week hiatus. They probably put the account on hold and sent an email to the client requesting verification. They mistakenly assumed the debt was not paid as it had not been reported back as a payment by the client and started calling the debtor again. The debtor filed suit and won in a lower court and on appeal. Part of the agency’s defense was that it never received an update from the client until it proactively contacted them after a BBB complaint. So this begs a question to creditors; is it worth it to have your company and/or your business partner exposed to fines or even bad publicity just because there are no internal resources or processes to address the proper administration of the debt collection process? For my case, I think not. But, next time I bring this up as a mutual concern, please don’t tell me “My other agencies don’t hassle me about this”. Access has your back. We can always figure out a solution to administrative issues that may involve a little more work on our part. I may be the advocate for resolution but I am also the target for punishment. Regardless of my approach or professionalism, I am the most vulnerable scapegoat between all parties. Consequently, I feel compelled to speak to the importance of follow through in the final steps of the collection process.


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3 Responses and Counting...

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