Debt collection

The use of data and analysis in collections has come a long way. The best collectors not so long ago would rely on the magical powers of knowledge and instinct to determine the accounts that were the most apt to pay and, if so, how to best secure payment.

Portfolio Recovery Associates Inc., a Norfolk, Va. debt buyer, announced today that it has acquired a controlling interest in the assets of Claims Compensation Bureau (CCB), a company that specializes in recovering funds and processing payments owed under class-action settlements.

The deadline to become compliant with the final rule on the “ability to pay” amendments to Regulation Z stemming from the CARD Act of 2009 passed last month. Financial institutions are breathing a sigh of relief and getting on with their business.

Mortgage modifications made permanent jumped 45% in February, according to newly released U.S. Treasury Department data.

U.S. revolving credit, 98% of which is credit card debt, fell to $864.4 billion in January from a revised total of $866.1 billion in December, marking the 16th consecutive month that saw Americans shed credit card debt, according to the Federal Reserve's latest G.19 report.

LifeLock Inc. agreed today to pay $11 million to the Federal Trade Commission and $1 million to a group of 35 state attorneys general to settle charges that the company used false claims to promote its identity theft protection services.

An estimated 764 different collection agencies and creditors are named in 899 consumer statute lawsuits filed nationwide in February, according to data from U.S. District Court complaint dockets. The numbers are up from a month earlier when 712 agencies and creditors were named in 851 lawsuits, according to research firm WebRecon LLC, which compiles the monthly data.

The state of New Jersey's Assembly Consumer Affairs Committee on Thursday approved a law designed to help consumers combat wrongful collection practices. The issue now moves to the full Assembly for a possible floor vote at an as-yet-unscheduled time.

Advantage Credit Repair LLC in Chicago and Mark D. Solomon, company president and owner, agreed to settle Federal Trade Commission charges filed last year for falsely claiming the firm would improve consumers' credit ratings.

Linda Almonte, a former assistant vice president at JP Morgan Chase, has filed a lawsuit against the banking giant claiming that its credit card unit misrepresented information about a portfolio of card debt for sale.

Credit Bureau Collection Services, a Columbus, Ohio collection agency, will pay a civil fine of $1.1 million to settle Federal Trade Commission charges that it violated federal law by inaccurately reporting credit information and pushing consumers to pay debts they often did not owe, FTC officials said today.

A Washington, D.C. lawyer, accused late last year of collecting more than $1.2 million from homeowners with false promises to arrange loan modifications, has been charged with bank fraud after depositing $2.4 million in counterfeit checks at several banks.

TransUnion reports that customers at least 60 days past due on their mortgage payments rose to a new record in the fourth quarter.

Legal collection giant Mann Bracken LLP, at the firm's request, will be placed into receivership and liquidated rather than filing for bankruptcy protection, according to Montgomery County (Md.) Circuit Court officials.

With more borrowers making hard choices about the bills that are most important to pay, more collection shops are adopting a kid-gloves approach to recoveries.

Alabama Attorney General Troy King's office and the Alabama Securities Commission announced this week the permanent shutdown of what they call one of the largest debt settlement schemes in the nation.

In less than two years, the financial world witnessed the collapse of some of the most trusted industry icons, mergers and acquisitions of many of the largest banks and government bailouts - namely TARP.

An estimated 293 different collection agencies and creditors are named in 436 consumer statute lawsuits filed nationwide in the first half of February, according to data from U.S. District Court complaint dockets. The 15-day total trails the pace established in January. In that month, 712 collection agencies and creditors were named in 851 lawsuits.

Editor's Note: This is an updated version of a column published by Collections & Credit Risk last month.

Minnesota Attorney General Lori Swanson filed lawsuits Thursday against six debt settlement companies, alleging they violated a state law passed last August that requires them to be licensed in Minnesota and cap the fees they can charge. The law generally caps the origination fee paid by the consumer at between $200 and $500. Monthly fees are capped at between $50 and $75.