Allow the States and/or local courts administer lawsuits. Regardless of any added rules, documents, etc. none will help increase debtors attending hearings. Since 1964 I have seen no significant increase of consumers attending hearings. I have, however, seen the major reason being attributed to not understanding due process by consumers.
Maybe I missed something but I never received any notice from my original mortgage lender that my mortgage was sold. Maybe that is better since the new "owner" may be a pool of investors.
As to notification my experience was the buyer sent the notice listing the original creditor name. Requiring the seller and buyer to send a notice would cause consumer confusion.
Assuming debtors have a valid address, which is some cases they do not, additional notice that the debt is being assigned to a third party collection entity is no benefit. My experience is intervention to collect by a third party normally occurs when the consumer is over 180 contractual delinquent. Furthermore, if the consumer receives the warning the account would be placed with a third party so how many different contacts would occur??? Many and more confusing to the consumer and agency.
Suspend further action to collect or re-sell. Placing a rule that prohibits a collector from reporting information to a CRA during the 30 day window would be a nightmare from elm street and only cause more problems. Unresolved disputes should not be sold and should be removed from collection..Period.
FDCPA should define what constitutes reasonable period of time. In my experience most attorneys who represent a debtor do not return communication inquiries about representation. In most cases the delay in response may be caused by the debtor paying installment payments to the attorney to file a bankruptcy proceeding. When the debtor does not keep the repayment terms a creditor is presently not notified that the representation has terminated and there is no attorney representation.
If the present mortgage repayment debacle is any indication of noticing or added noticing I think it is much simpler to notify the consumer whom to pay and list the original creditor name. Also, I think it would be a good idea for CFPB and the industry to combine this with FCRA issues. For example, if a consumer today reviews their credit reports the normal term is "sold to another lender" but no name. I have heard similar stories from attorneys who try to match what a consumer lists as a creditor versus what is listed in a credit report. Seems to me that everyone is trying to close the back door but leaving the front door open.
Having been in collections since 1964, my concern of establishing rules may cause more problems for the consumer. I have seen advocates on both sides suggesting changes to the 1977 law and I agree somewhat with both sides. It is time the law must change and have clarification to the reality that technology has changed, the consumer has changed and collection has changed. It is certain that neither side is going to agree with all of the changes but isn't it time to at least move both to the middle that really serves the consumer? Rules are made on conditions and conditions change, and therefore so must the rule of law. Today we have an outdated law and are seeing state laws change as well and compliance to each is not working.
I believe email and texting would improve communications between both. In my experience consumers today use both more than land line phones. There will be arguments of potential abuse but creating more effective communication is a plus to both sides. In a sampling last year, I used 100 accounts to track and found that only five consumers responded to the initial notice and three of them questioned the balance and/or creditor named. Once telephonic communication began 10 accounts made repayment arrangements. This left 85 accounts or 85% "no result". However, the advice to contact via email on the company web site included in the second notice found 17% contacted via email. While the sampling is very small, it suggested that consumers use email versus verbal contact. I have seen different arguments that suggest a consumer must provide written authorization to be contacted via cell or email but possibly the option to contact via email rather than by phone may help improve communication and possibly reduce lawsuits against the consumer. Clarification is important for each but when one thinks that no contact by the consumer can and usually means another option by the creditor to file a lawsuit is increased, so the reality of today is how consumers communicate and the answer is using cell and emails.
I would suggest a review of the language already published in the Federal Rules of Bankruptcy BR 3001( effective date 12/1/2012) relating to documentation. Based upon my participation with the Rule and numerous comments/hearings, I believe some time can be eliminated without re-inventing a different set of standards. Bankruptcy involves collection and involves consumers including attorneys on both sides as well. I recommend another examination of the "validation" notice language and the litany of interpretations of the language. If the notice is sent and certainly should be, what happens if there is no response from the debtor? Can the debtor say the notice was not received and if the collector does not get a response after 30 days is this an admission the debt is valid?
I would suggest a visit to the Federal Bankruptcy Rule 3001(effective 12/1/2012) and comments made during the proposed period, plus the hearing presentation statements published and are available. The Rule already addresses documentation issues.
I again see that attaching all of the proposed documentation to the validation notice is not productive for the consumer or the sender. I do believe additional documentation as to chain of title be available if a consumer is being sued in Court.
First, a third party collecting on behalf of a lender isn't, nor should be, defined as a furnisher of information. While the FDCPA requires notice specific to the validity of the debt, the FCRA has requirements for users of consumer reports. Combining two statue requirements in the initial notice of a debt serves no purpose. Sending during the 30 day notice would create confusion in the event the consumer responds, for example, to the validity of the debt and does not include a request about a credit report accuracy. I believe the issue is whether a third party debt collector or debt buyer should report an account to a credit reporting agency which would overlap the original lender's last report on the consumer account. In my opinion they should not. I have seen confusion due to lack of rule clarity. For example, if a consumer files a bankruptcy petition who should report that event? If a third party opts to report then the third party would be required to report events that take place during or after the bankruptcy filing. To date, Title 11 offers no direction to reporting and neither does the FCRA other than a credit reporting agency removing after 10 years.
Maybe a definition of "bad check". If a consumer sends a post dated check(s) and it bounces then it may not fall under the bad check enforcement. Also, consumers use ACH capability to repay a debt, so if the amount is not available, then this may also not fall under bad check enforcement. My experience is more consumers use ACH rather than personal check distribution. there are numerous reasons why checks bounce so I suggest a look see as to determining the reason or cause why the check bounced.
If surviving spouses signed or agreed to a contract or extension of credit then they are obligated to repay in my opinion. Also, certain states that have community property laws may require a spouse to repay a debt even though they did not sign the contract. I believe the executor or administrator should investigate whether any debt was disputed or possibly fraud. To start they should obtain a credit report for starters regardless whether collectors disclose either way. If a collector knows a service member passed away, then the spouse, executor, administrator should not be contacted and the account closed law or no law as I have seen this type of issue arise over the years and have seen and approved accounts closed in the event a service member passed away.
The CFPB doesn't need to craft rules to encourage non-litigation alternatives or not to sell to those who utilize litigation models. BillBartmann's data is suspect as to 10M lawsuits filed yearly and likely his models comparing litigation and non litigation data has not been published. The facts are consumers need to reach out and communicate to a lender, agency, or debt buyer rather than not communicating at all. Debts not repaid usually result in the debt being charged off so the consumer had a minimum of 180 days to seek alternative repayment options. Lenders, collection agencies and debt buyers have a right to sue a legal debt just like the IRS. Keep in mind that judgments last longer than open credit accounts looking at statute of limitations. To BillBatram's comment that filing bankruptcy creates hell as far as FICO scores, consumers face that issue with non payment of debt and bankruptcy is an alternative for a consumer to have a fresh start. That was the intent of the bankruptcy law and still is. Consumers with little or no hope to repay debts care more about moving forward with their lives instead of worrying about FICO SCORES.
The data is difficult to obtain and likely not attainable considering lawsuits can be filed in magistrate, county, state, and federal courts. Also the data could be inaccurate since a case can be postponed and renewed later. I do not know if there is any central data base for either court. Also, lawsuits are filed in bankruptcy proceedings as well so these would need to be considered as well. This is why I am concerned when numbers just get tossed out without and substance verification.
Based on my experiences I would estimate about 1.5% of delinquent accounts were forwarded to filing a lawsuit.
Since the UCC and to the best of my knowledge, State laws do not define reasonable period of time, this is a problem and has been a problem for most lenders and third party collectors based on me experience of over 40 years. Consumers should be able to seek assistance from an attorney and be required to provide the attorney contact information to a collector, unless the attorney has not already. The attorney should be required to notify all creditors of representation within 20 business days of the consumer's signed agreement of that representation. While most attorneys do notify lenders and/or third party agencies some do not and some do not respond to inquiries concerning representation. After the first lender/third party inquiry the attorney should be required to notify the lender and/or agency within 10 business days in writing of representation.
The attorney should be required to notify a lender and/or third party within 7 business days that representation of the debtor has been terminated. It should not be a violation for a lender or third party to contact the debtor after 30 days to only determine if the debtor has continued representation of an attorney if there has been no communication provided by the attorney after 30 days of the initial notification in writing of representation.
I have experienced no communication after the initial notice by the debtor and/or attorney received over 60-90 days and even six months.
If non profit credit counseling agencies can send notification to lenders and third party collectors for representation of a consumer to reduce payments after an initial meeting I believe attorneys should be able to notify in the time periods specified.
Setting rules of notification time frames would benefit all parties.
I believe the most significant problem is due to financial institutions having two systems that are not fully integrated. One is the system of record that contains account level information and the second is a charge off system that is used to track events that occur after the account is charged off. Events that occur on the charge off system are normally not reported to the system of record. Also, charged off system does not or is not used for credit reporting. The second problem is a result of mergers and/or acquisitions where the financial institution only converts the system of record and not the acquired charge off system. This leaves a void as to the particular status after the account was charged off. As accounts are outsourced or purchased the reliance of information resides on the system of record and NOT the charge off system. The third problem involves a consumer who has more than one account with the original lender so the risk of one account going to a different agency or debt buyer is highly likely. Even if access by the debt buyer and collector is available, the events that took place on the account are normally not recorded in the system of record and the charge off system may have been decommissioned. As to the issue of credit reporting of disputes depends upon whether an agency or debt buyer furnish data to a credit reporting agency. The amount of consumer data currently and in the past reported to credit reporting agencies may not be accurate specific to charged off accounts and to require a chain of title would be expensive and the likely hood of accuracy would still not be achieved. Going forward I think the first focus must be on credit reporting accuracy.
I see a some potential risks. First, disclosure requirement to the consumer the account information is in a central depository. Secondly, what if the notice is not sent and/or the information in the central data base is not accurate, who has the liability. Third, the central depository could be used as a means to support class action lawsuits or be a basis of a lawsuit. An alternative is already available but needs to be corrected and a national uniformity of information provided: Credit Reports. Credit reporting agencies, furnishers, and consumers need to have better accuracy across the board. Stop the finger pointing and excuses, in my opinion.
A recent case filed by the Colorado Attorney General in the District Court 11/25/2013 against four entities encompasses what is wrong from selling debt by two financial banks, to a debt buyer, and then collection by an agency and law firm on why oversight/rules/actions must take place and should have been in the past. Two important points. First the complaint is an allegation as of now. The second is the complaint isn't representative of the number of debt buyers and collection agencies/law firms in my opinion. It does reflect why rules must be established and enforced against those who do not conform to the laws and regulations. It also shows the need of better controls and due diligence by banks who sell accounts and be held accountable even though the accounts change ownership. It is long overdue to place accountability and responsibility to bad players, and include individuals who manage the enterprises from start to finish.
I would take a hard look at 'credit reporting' from what is being reported by a creditor and then what is reported by a debt collection or debt buying company. For example, if a creditor obtains a judgment amount greater than the account balance, that amount is likely not reported because creditors seldom have system capabilities to make adjustments to accounts.
RBell
1
Depending on the nature of the suit the closest court location to the debtor's home address.
View this comment in the discussion thread
RBell
2
Allow the States and/or local courts administer lawsuits. Regardless of any added rules, documents, etc. none will help increase debtors attending hearings. Since 1964 I have seen no significant increase of consumers attending hearings. I have, however, seen the major reason being attributed to not understanding due process by consumers.
View this comment in the discussion thread
RBell
3
No federal rules. Allow States continued enforcement of their state laws.
View this comment in the discussion thread
RBell
4
Maybe I missed something but I never received any notice from my original mortgage lender that my mortgage was sold. Maybe that is better since the new "owner" may be a pool of investors. As to notification my experience was the buyer sent the notice listing the original creditor name. Requiring the seller and buyer to send a notice would cause consumer confusion.
View this comment in the discussion thread
RBell
5Assuming debtors have a valid address, which is some cases they do not, additional notice that the debt is being assigned to a third party collection entity is no benefit. My experience is intervention to collect by a third party normally occurs when the consumer is over 180 contractual delinquent. Furthermore, if the consumer receives the warning the account would be placed with a third party so how many different contacts would occur??? Many and more confusing to the consumer and agency.
View this comment in the discussion thread
RBell
6
Suspend further action to collect or re-sell. Placing a rule that prohibits a collector from reporting information to a CRA during the 30 day window would be a nightmare from elm street and only cause more problems. Unresolved disputes should not be sold and should be removed from collection..Period.
View this comment in the discussion thread
RBell
7FDCPA should define what constitutes reasonable period of time. In my experience most attorneys who represent a debtor do not return communication inquiries about representation. In most cases the delay in response may be caused by the debtor paying installment payments to the attorney to file a bankruptcy proceeding. When the debtor does not keep the repayment terms a creditor is presently not notified that the representation has terminated and there is no attorney representation.
View this comment in the discussion thread
RBell
8
CFPB should not issue any rule that belongs to State law or under authority by the State.
View this comment in the discussion thread
RBell
9
If the present mortgage repayment debacle is any indication of noticing or added noticing I think it is much simpler to notify the consumer whom to pay and list the original creditor name. Also, I think it would be a good idea for CFPB and the industry to combine this with FCRA issues. For example, if a consumer today reviews their credit reports the normal term is "sold to another lender" but no name. I have heard similar stories from attorneys who try to match what a consumer lists as a creditor versus what is listed in a credit report. Seems to me that everyone is trying to close the back door but leaving the front door open.
View this comment in the discussion thread
RBell
10
Having been in collections since 1964, my concern of establishing rules may cause more problems for the consumer. I have seen advocates on both sides suggesting changes to the 1977 law and I agree somewhat with both sides. It is time the law must change and have clarification to the reality that technology has changed, the consumer has changed and collection has changed. It is certain that neither side is going to agree with all of the changes but isn't it time to at least move both to the middle that really serves the consumer? Rules are made on conditions and conditions change, and therefore so must the rule of law. Today we have an outdated law and are seeing state laws change as well and compliance to each is not working.
View this comment in the discussion thread
RBell
11
See my prior comment in number one.
View this comment in the discussion thread
RBell
12
I believe email and texting would improve communications between both. In my experience consumers today use both more than land line phones. There will be arguments of potential abuse but creating more effective communication is a plus to both sides. In a sampling last year, I used 100 accounts to track and found that only five consumers responded to the initial notice and three of them questioned the balance and/or creditor named. Once telephonic communication began 10 accounts made repayment arrangements. This left 85 accounts or 85% "no result". However, the advice to contact via email on the company web site included in the second notice found 17% contacted via email. While the sampling is very small, it suggested that consumers use email versus verbal contact. I have seen different arguments that suggest a consumer must provide written authorization to be contacted via cell or email but possibly the option to contact via email rather than by phone may help improve communication and possibly reduce lawsuits against the consumer. Clarification is important for each but when one thinks that no contact by the consumer can and usually means another option by the creditor to file a lawsuit is increased, so the reality of today is how consumers communicate and the answer is using cell and emails.
View this comment in the discussion thread
RBell
13
I would suggest a review of the language already published in the Federal Rules of Bankruptcy BR 3001( effective date 12/1/2012) relating to documentation. Based upon my participation with the Rule and numerous comments/hearings, I believe some time can be eliminated without re-inventing a different set of standards. Bankruptcy involves collection and involves consumers including attorneys on both sides as well. I recommend another examination of the "validation" notice language and the litany of interpretations of the language. If the notice is sent and certainly should be, what happens if there is no response from the debtor? Can the debtor say the notice was not received and if the collector does not get a response after 30 days is this an admission the debt is valid?
View this comment in the discussion thread
RBell
14
I would suggest a visit to the Federal Bankruptcy Rule 3001(effective 12/1/2012) and comments made during the proposed period, plus the hearing presentation statements published and are available. The Rule already addresses documentation issues. I again see that attaching all of the proposed documentation to the validation notice is not productive for the consumer or the sender. I do believe additional documentation as to chain of title be available if a consumer is being sued in Court.
View this comment in the discussion thread
RBell
15
First, a third party collecting on behalf of a lender isn't, nor should be, defined as a furnisher of information. While the FDCPA requires notice specific to the validity of the debt, the FCRA has requirements for users of consumer reports. Combining two statue requirements in the initial notice of a debt serves no purpose. Sending during the 30 day notice would create confusion in the event the consumer responds, for example, to the validity of the debt and does not include a request about a credit report accuracy. I believe the issue is whether a third party debt collector or debt buyer should report an account to a credit reporting agency which would overlap the original lender's last report on the consumer account. In my opinion they should not. I have seen confusion due to lack of rule clarity. For example, if a consumer files a bankruptcy petition who should report that event? If a third party opts to report then the third party would be required to report events that take place during or after the bankruptcy filing. To date, Title 11 offers no direction to reporting and neither does the FCRA other than a credit reporting agency removing after 10 years.
View this comment in the discussion thread
RBell
16
Maybe a definition of "bad check". If a consumer sends a post dated check(s) and it bounces then it may not fall under the bad check enforcement. Also, consumers use ACH capability to repay a debt, so if the amount is not available, then this may also not fall under bad check enforcement. My experience is more consumers use ACH rather than personal check distribution. there are numerous reasons why checks bounce so I suggest a look see as to determining the reason or cause why the check bounced.
View this comment in the discussion thread
RBell
17
If surviving spouses signed or agreed to a contract or extension of credit then they are obligated to repay in my opinion. Also, certain states that have community property laws may require a spouse to repay a debt even though they did not sign the contract. I believe the executor or administrator should investigate whether any debt was disputed or possibly fraud. To start they should obtain a credit report for starters regardless whether collectors disclose either way. If a collector knows a service member passed away, then the spouse, executor, administrator should not be contacted and the account closed law or no law as I have seen this type of issue arise over the years and have seen and approved accounts closed in the event a service member passed away.
View this comment in the discussion thread
RBell
18
The CFPB doesn't need to craft rules to encourage non-litigation alternatives or not to sell to those who utilize litigation models. BillBartmann's data is suspect as to 10M lawsuits filed yearly and likely his models comparing litigation and non litigation data has not been published. The facts are consumers need to reach out and communicate to a lender, agency, or debt buyer rather than not communicating at all. Debts not repaid usually result in the debt being charged off so the consumer had a minimum of 180 days to seek alternative repayment options. Lenders, collection agencies and debt buyers have a right to sue a legal debt just like the IRS. Keep in mind that judgments last longer than open credit accounts looking at statute of limitations. To BillBatram's comment that filing bankruptcy creates hell as far as FICO scores, consumers face that issue with non payment of debt and bankruptcy is an alternative for a consumer to have a fresh start. That was the intent of the bankruptcy law and still is. Consumers with little or no hope to repay debts care more about moving forward with their lives instead of worrying about FICO SCORES.
View this comment in the discussion thread
RBell
19
The data is difficult to obtain and likely not attainable considering lawsuits can be filed in magistrate, county, state, and federal courts. Also the data could be inaccurate since a case can be postponed and renewed later. I do not know if there is any central data base for either court. Also, lawsuits are filed in bankruptcy proceedings as well so these would need to be considered as well. This is why I am concerned when numbers just get tossed out without and substance verification. Based on my experiences I would estimate about 1.5% of delinquent accounts were forwarded to filing a lawsuit.
View this comment in the discussion thread
RBell
20
Since the UCC and to the best of my knowledge, State laws do not define reasonable period of time, this is a problem and has been a problem for most lenders and third party collectors based on me experience of over 40 years. Consumers should be able to seek assistance from an attorney and be required to provide the attorney contact information to a collector, unless the attorney has not already. The attorney should be required to notify all creditors of representation within 20 business days of the consumer's signed agreement of that representation. While most attorneys do notify lenders and/or third party agencies some do not and some do not respond to inquiries concerning representation. After the first lender/third party inquiry the attorney should be required to notify the lender and/or agency within 10 business days in writing of representation. The attorney should be required to notify a lender and/or third party within 7 business days that representation of the debtor has been terminated. It should not be a violation for a lender or third party to contact the debtor after 30 days to only determine if the debtor has continued representation of an attorney if there has been no communication provided by the attorney after 30 days of the initial notification in writing of representation. I have experienced no communication after the initial notice by the debtor and/or attorney received over 60-90 days and even six months. If non profit credit counseling agencies can send notification to lenders and third party collectors for representation of a consumer to reduce payments after an initial meeting I believe attorneys should be able to notify in the time periods specified. Setting rules of notification time frames would benefit all parties.
View this comment in the discussion thread
RBell
21
I believe the most significant problem is due to financial institutions having two systems that are not fully integrated. One is the system of record that contains account level information and the second is a charge off system that is used to track events that occur after the account is charged off. Events that occur on the charge off system are normally not reported to the system of record. Also, charged off system does not or is not used for credit reporting. The second problem is a result of mergers and/or acquisitions where the financial institution only converts the system of record and not the acquired charge off system. This leaves a void as to the particular status after the account was charged off. As accounts are outsourced or purchased the reliance of information resides on the system of record and NOT the charge off system. The third problem involves a consumer who has more than one account with the original lender so the risk of one account going to a different agency or debt buyer is highly likely. Even if access by the debt buyer and collector is available, the events that took place on the account are normally not recorded in the system of record and the charge off system may have been decommissioned. As to the issue of credit reporting of disputes depends upon whether an agency or debt buyer furnish data to a credit reporting agency. The amount of consumer data currently and in the past reported to credit reporting agencies may not be accurate specific to charged off accounts and to require a chain of title would be expensive and the likely hood of accuracy would still not be achieved. Going forward I think the first focus must be on credit reporting accuracy.
View this comment in the discussion thread
RBell
22
I see a some potential risks. First, disclosure requirement to the consumer the account information is in a central depository. Secondly, what if the notice is not sent and/or the information in the central data base is not accurate, who has the liability. Third, the central depository could be used as a means to support class action lawsuits or be a basis of a lawsuit. An alternative is already available but needs to be corrected and a national uniformity of information provided: Credit Reports. Credit reporting agencies, furnishers, and consumers need to have better accuracy across the board. Stop the finger pointing and excuses, in my opinion.
View this comment in the discussion thread
RBell
23
A recent case filed by the Colorado Attorney General in the District Court 11/25/2013 against four entities encompasses what is wrong from selling debt by two financial banks, to a debt buyer, and then collection by an agency and law firm on why oversight/rules/actions must take place and should have been in the past. Two important points. First the complaint is an allegation as of now. The second is the complaint isn't representative of the number of debt buyers and collection agencies/law firms in my opinion. It does reflect why rules must be established and enforced against those who do not conform to the laws and regulations. It also shows the need of better controls and due diligence by banks who sell accounts and be held accountable even though the accounts change ownership. It is long overdue to place accountability and responsibility to bad players, and include individuals who manage the enterprises from start to finish.
View this comment in the discussion thread
RBell
24
I would take a hard look at 'credit reporting' from what is being reported by a creditor and then what is reported by a debt collection or debt buying company. For example, if a creditor obtains a judgment amount greater than the account balance, that amount is likely not reported because creditors seldom have system capabilities to make adjustments to accounts.
View this comment in the discussion thread