I have a collection story about my 90 year old mother in law. One day she receives a notice from a collection agency. My mother in law is listed in the phone book, and her name is similar to the supposed debtor although they live in different parts of the state.
They send a collection notice. We respond that they have the wrong person and sent it certified.
They receive our response, but do not respond.
She continues to get notices and an occasional phone call.
While you might say, just disregard them, this is incredibly stressful to my 90 year old mother in law.
I would like to propose my own solution to the problem and it is self-funding.
1. The consumer disputes with the collection agency via certified mail.
2. If the collection agency doesn't formally cease collections and write a letter acknowledging this within a period of time, the consumer can pay a filing fee ($50-75) and appeal to the CPFB.
3. If the collection agency is found at fault, they $50-$75 fee is refunded to the consumer and the fee plus a penalty will be assessed the collection agency. Failure to pay the fines will result in the collection agency losing their license.
Bottom line: there's need to be some "teeth" in any rules.
Debtors should be able to leave a message for a specific debtor, the name of their company and request a call-back at a specified number. When a consumer returns this type of call, the collector or debtor should be required to give them the mini-Miranda warning. There is no need for collectors to leave messages revealing the nature of their calls. The Health Information Privacy and Portability Act prohibits disclosure of protected information to unauthorized parties and the same should apply to debt collectors.
Bottom line...the new rules that the CFPB comes up with need to be FAIR to BOTH the debt collector and the consumer. While there are collection agencies that abuse consumers and the system, and need to be dealt with, most agencies are simply trying to help collect monies due their clients from consumers who have chosen not to pay. There could be a variety of reasons that they've chosen not to pay; both legit and not legit.
Currently, the playing field favors consumers; more specifically 'consumer attorneys'. Collection agencies can get sued for leaving a message for a consumer WITHOUT disclosing that they owe a debt because uninformed judges have arbitrarily decided that a message that does not disclose any information about a debt is a communication. This completely contradicts current FDCPA law, however, that specifically states that a 'communication' means directly conveying information regarding a debt.
They can also get sued by leaving a 'Foti' message, should that message be overheard by a 3rd party. 'Foti' is NOT law, but rather another judge's uneducated (on FDCPA) opinion / ruling that basically states that 'messages need to give complete information about a consumer debt and that the call is from a collection agency, after allowing unrelated 3rd parties the opportunity to step away from the message retrieval device. This sounds silly, but it's true.
Predatory consumer attorneys use this lack of definition in the law to perform 'Sue and Settle' techniques on collection agencies that make call attempts in one of the above stated procedures; agencies can get sued for trying to contact debtors by both methods.
What's worse, and I personally know consumers that this has happened to, is that these 'supposed' consumer attorneys aren't really acting on behalf of the consumers that they represent. They use these consumers simply as a 'vehicle' to sue an agency where their whole goal is to get thousands of SETTLEMENT dollars in attorney fees as they can while only providing the alleged 'wronged' consumer several hundreds of dollars. They use this 'SUE & SETTLE' business model as a way of extorting money from agencies because they know that an agency would have to spend $30-50K to defend themselves. And, while the agency may be successful in defending themselves, many don't have the monies to spend defending themselves knowing that they cannot recoup these fees & costs from the consumer attorney that filed the frivolous lawsuit in the first place.
Furthermore, somewhere along the way, another uninformed judge made a ruling (NOT LAW) stating that agencies can be sued under TCPA by attempting to contact a consumer about their debt by an auto-dialer calling the consumer's cell phone.
Several things are wrong with this. First, if you read the TCPA in it's entirety, it was meant to stop TELEPHONE SOLICITORS (people trying to sell consumers something), that didn't have any prior relationship with the consumer. Collection agencies are not trying to sell anything. Collection agencies, via BA Agreements, act as an extension of the business office for those creditors that DO HAVE A PRIOR RELATIONSHIP with consumers. As such, the TCPA does not apply. However, judges that are ignorant on the law make their opinion into a ruling which opens the doors for these predator attorneys to use their 'Sue & Settle' techniques.
In conclusion, the CFPB needs to specifically define HOW collection agencies can lawfully contact, and work with, those consumers that owe their clients money. The CFPB needs to 'throw out' ignorant rulings by judges who do not understand the law.
The laws have to be equal on both sides. If not, the CFPB will simply provide consumers a legal avenue to steal from those businesses that they do credit business with by not paying their bills and, subsequently, these businesses not being able to hire debt collectors to help them get the money that they're owed.
The national database and licensing would be a good idea if it were used effectively to weed out the bad collectors and put them (and their corporate officers) out of business permanently. Not those who get caught up in technical violations over mini-Mirandas, but the ones who knowingly commit serious violations of the FDCPA, FCRA, and TCPA. As Tfleeman noted in his very insightful comment above, the "private policing" we have now has not been effective in stopping the worst abuses.
As for the main topic of this page, I think it's far better for a collector to leave a voicemail (with clear identification of the caller and callee) than to call the same number 50 times without leaving a message. The rules should encourage this rather than frustrate it. So, I would favor option #1, with the mini-Miranda deferred until the collector is sure he is talking to the right person.
Tiffany, I think part of the problem is that the 2% of collectors who harass and abuse are responsible for a disproportionate share of the contacts that consumers have with your industry. Everyone (whether they owe a debt or not) has had an encounter with one of these bad apples, and then they want to take out their anger on you. And when you make an honest mistake and get sued for a technical violation, you pay the same penalty as a company that has deliberately harassed someone with 100 phone calls.
TaxGuy
1
I have a collection story about my 90 year old mother in law. One day she receives a notice from a collection agency. My mother in law is listed in the phone book, and her name is similar to the supposed debtor although they live in different parts of the state. They send a collection notice. We respond that they have the wrong person and sent it certified. They receive our response, but do not respond. She continues to get notices and an occasional phone call. While you might say, just disregard them, this is incredibly stressful to my 90 year old mother in law. I would like to propose my own solution to the problem and it is self-funding. 1. The consumer disputes with the collection agency via certified mail. 2. If the collection agency doesn't formally cease collections and write a letter acknowledging this within a period of time, the consumer can pay a filing fee ($50-75) and appeal to the CPFB. 3. If the collection agency is found at fault, they $50-$75 fee is refunded to the consumer and the fee plus a penalty will be assessed the collection agency. Failure to pay the fines will result in the collection agency losing their license. Bottom line: there's need to be some "teeth" in any rules.
View this comment in the discussion thread
bonzarel
2
Debtors should be able to leave a message for a specific debtor, the name of their company and request a call-back at a specified number. When a consumer returns this type of call, the collector or debtor should be required to give them the mini-Miranda warning. There is no need for collectors to leave messages revealing the nature of their calls. The Health Information Privacy and Portability Act prohibits disclosure of protected information to unauthorized parties and the same should apply to debt collectors.
View this comment in the discussion thread
mslade
3
Bottom line...the new rules that the CFPB comes up with need to be FAIR to BOTH the debt collector and the consumer. While there are collection agencies that abuse consumers and the system, and need to be dealt with, most agencies are simply trying to help collect monies due their clients from consumers who have chosen not to pay. There could be a variety of reasons that they've chosen not to pay; both legit and not legit. Currently, the playing field favors consumers; more specifically 'consumer attorneys'. Collection agencies can get sued for leaving a message for a consumer WITHOUT disclosing that they owe a debt because uninformed judges have arbitrarily decided that a message that does not disclose any information about a debt is a communication. This completely contradicts current FDCPA law, however, that specifically states that a 'communication' means directly conveying information regarding a debt. They can also get sued by leaving a 'Foti' message, should that message be overheard by a 3rd party. 'Foti' is NOT law, but rather another judge's uneducated (on FDCPA) opinion / ruling that basically states that 'messages need to give complete information about a consumer debt and that the call is from a collection agency, after allowing unrelated 3rd parties the opportunity to step away from the message retrieval device. This sounds silly, but it's true. Predatory consumer attorneys use this lack of definition in the law to perform 'Sue and Settle' techniques on collection agencies that make call attempts in one of the above stated procedures; agencies can get sued for trying to contact debtors by both methods. What's worse, and I personally know consumers that this has happened to, is that these 'supposed' consumer attorneys aren't really acting on behalf of the consumers that they represent. They use these consumers simply as a 'vehicle' to sue an agency where their whole goal is to get thousands of SETTLEMENT dollars in attorney fees as they can while only providing the alleged 'wronged' consumer several hundreds of dollars. They use this 'SUE & SETTLE' business model as a way of extorting money from agencies because they know that an agency would have to spend $30-50K to defend themselves. And, while the agency may be successful in defending themselves, many don't have the monies to spend defending themselves knowing that they cannot recoup these fees & costs from the consumer attorney that filed the frivolous lawsuit in the first place. Furthermore, somewhere along the way, another uninformed judge made a ruling (NOT LAW) stating that agencies can be sued under TCPA by attempting to contact a consumer about their debt by an auto-dialer calling the consumer's cell phone. Several things are wrong with this. First, if you read the TCPA in it's entirety, it was meant to stop TELEPHONE SOLICITORS (people trying to sell consumers something), that didn't have any prior relationship with the consumer. Collection agencies are not trying to sell anything. Collection agencies, via BA Agreements, act as an extension of the business office for those creditors that DO HAVE A PRIOR RELATIONSHIP with consumers. As such, the TCPA does not apply. However, judges that are ignorant on the law make their opinion into a ruling which opens the doors for these predator attorneys to use their 'Sue & Settle' techniques. In conclusion, the CFPB needs to specifically define HOW collection agencies can lawfully contact, and work with, those consumers that owe their clients money. The CFPB needs to 'throw out' ignorant rulings by judges who do not understand the law. The laws have to be equal on both sides. If not, the CFPB will simply provide consumers a legal avenue to steal from those businesses that they do credit business with by not paying their bills and, subsequently, these businesses not being able to hire debt collectors to help them get the money that they're owed.
View this comment in the discussion thread
sw_in_the_midwest
4
The national database and licensing would be a good idea if it were used effectively to weed out the bad collectors and put them (and their corporate officers) out of business permanently. Not those who get caught up in technical violations over mini-Mirandas, but the ones who knowingly commit serious violations of the FDCPA, FCRA, and TCPA. As Tfleeman noted in his very insightful comment above, the "private policing" we have now has not been effective in stopping the worst abuses. As for the main topic of this page, I think it's far better for a collector to leave a voicemail (with clear identification of the caller and callee) than to call the same number 50 times without leaving a message. The rules should encourage this rather than frustrate it. So, I would favor option #1, with the mini-Miranda deferred until the collector is sure he is talking to the right person.
View this comment in the discussion thread
sw_in_the_midwest
5
Tiffany, I think part of the problem is that the 2% of collectors who harass and abuse are responsible for a disproportionate share of the contacts that consumers have with your industry. Everyone (whether they owe a debt or not) has had an encounter with one of these bad apples, and then they want to take out their anger on you. And when you make an honest mistake and get sued for a technical violation, you pay the same penalty as a company that has deliberately harassed someone with 100 phone calls.
View this comment in the discussion thread