It's that time of the year again. We find ourselves making our lists and checking them twice. As December draws to an end and we look forward to what's coming in 2012, it's time to spread some holiday cheer by sharing what's on the wish list of the nation's more than 150,000 collectors.
While we couldn't possibly capture and address every last wish, we've wrapped up a few of those desires below that your fellow debt collectors would like to find under their tree this year, courtesy of an unscientific survey.*
1. A friend at the Consumer Financial Protection Bureau, or CFPB. Congress in 2010 established the bureau to protect consumers by carrying out federal consumer financial laws; its oversight includes the debt-collection industry. The CFPB hasn't done much yet because the Senate hasn't confirmed President Obama's nominee as director - Richard Cordray, the head of the bureau's Enforcement Division.
But, let's not kid ourselves. The bureau wasn't created to protect the collection industry. That probably explains why the industry - represented by the Association of Credit and Collection Professionals, DBA International and the National Association of Retail Collection Attorneys - has no representation or consultant to the bureau. And the bureau staff so far has little, if any, industry experience, even though the CFPB will be working with the industry to create standardized documentation standards for collection litigation in all states.
2. Ability to communicate with debtors using the technology they prefer. Existing law passed 33 years ago, along with the Telephone Consumer Protection Act, effectively limits collection agencies to using the postal service and landline phones to communicate with debtors. (They can call a debtor's cell phone but the calls must be made by humans, not computers.)
Back in 1978, communicating by e-mail, cell phones, texting, the web or modern social media, such as Twitter or Facebook, just wasn't available.
The industry would like the CFPB to approve communications with consumers using the technology the consumers prefer. Times have changed, and 27% of consumers only use a cell phone at home. And texting or e-mailing is a much more efficient way of reaching people.
President Obama favors allowing his political fundraiser to make dialer calls to cell phones to collect on debt. Why not us, too?
As for voicemail, collectors would like standardized language approved so when they leave a voicemail message, they know they won't violate any laws or damage a consumer's privacy.
3. Regulatory reform to curb frivolous lawsuits. Let's face it. With joblessness high, some debtors and their lawyers are filing frivolous lawsuits against collection agencies. Or worse, they're simply making a demand for money via an attorney. Sadly, many of these claims are settled to avoid the high cost of fighting lawsuits and, yes, spreading the nasty name-calling against the industry. This costs the industry money and, ultimately, jobs.
Through mid-November, 10,402 cases were filed in U.S. District Courts, alleging violations of the Fair Debt Collection Practices Act, with the highest filings in California, Florida, New York, Pennsylvania and New Jersey. And data suggests that as many as one-third of FDCPA lawsuits are filed by people who have filed at least one lawsuit before.
One former collector is keeping a registry of those who file multiple frivolous lawsuits.
So, how about tort reform with a provision that the loser pays court fees. Question: What will the CFPB do on this issue?
4. Speed up access to credit to worthy applicants. After the financial-industry crisis, banks and other lenders to mortgage, loan and credit card applicants tightened their underwriting standards. Most of those changes have proved beneficial to curbing risky loans.
Still, lengthy delays in approving credit access to mortgage and other loan applicants who meet all the conditions for such credit are hurting the economy.
The government in October moved to help homeowners refinance their mortgages at current rates even though their homes don't meet current standards set by most lenders. Such assistance should be accorded to more qualified applicants for credit cards, auto and other loans. Stories mount of people who can't refinance their auto loans even though they have sufficient cash on hand and good credit scores.
To be sure, bankcard originations are on the upswing, rising 27% in the first six months of 2011. New bankcard accounts for subprime borrowers climbed 64% in the first half to 5.4 million and now represent nearly one-third of all new bankcard holders. Still, worthy mortgage-loan applicants should receive similar assistance to speed up decisions on their individual cases.
5. Better solution for obtaining documented proof-of-loan information about debtors.
Such documentation being more readily accessible from a creditor would allow for easier compliance "serve first" laws and rules, such as those in North Carolina. These restrictions allow direct debt collectors to present better proof of an existing debt, including the fact that they own the debt they're trying to collect - information isn't readily available now.
As a result, the regulations and laws have noticeably slowed the collection of legitimate obligations.
Documentation could be digitized, speeding accessibility to it, when necessary. Unfortunately, collectors don't always have that documented proof now. That's why requiring creditors to make it available would allow collectors to do their job more efficiently.
In the meantime, the industry is ramping up its lobbying, primarily at the state level, in an effort to modify the state bills, and has hired former Georgia Attorney General Thurbert Baker to spearhead the drive. At the federal level, the question arises: Will the CFPB also mandate the requirement to have documented proof-of-loan information or will it put pressure on the creditors to make it more readily available?
Oh, yes, one more wish could always grace a Collector's Wish List. Please pay them a little respect.
* Thanks to Bill Barnshaw of MRS Associates, Inc.; Steve Kusic of National Recovery Agency; Nick Machol of Machol & Johannes; and Matthew Maloney of First Financial Asset Management for their holiday wish list contributions.
David Ingram is Senior Marketing Director at Experian.