ACA International announced Wednesday it "strongly disagrees" with a National Consumer Law Center (NCLC) report on student loan collections, calling it an "inaccurate portrait of debt collection created to further its agenda."
“In recovering delinquent or defaulted student loan debt on behalf of the Department of Education, collectors are proud of their exceptional customer service and efforts to return tax dollars to American taxpayers,” said ACA CEO Pat Morris. “Our members have a fundamental belief that consumers, regardless of the type of debt being collected, deserve to be treated respectfully and lawfully.”
ACA, based in Minneapolis, is the largest association representing collection agencies and creditors.
“We take consumer complaints very seriously and agree on the importance of protecting consumers against businesses that engage in deceptive, unfair or abusive practices,” said Morris.
ACA officials say the report relies more on assumption and personal opinion than fact and "fails to paint a clear picture about consumer complaints against the third-party debt collection industry."
NCLC's report listed five recommendations it would like to see implemented regarding student loan collections:
1. The U.S. Department of Education must create an accessible collection agency complaint system.
2. The Department of Education must change its commission system to incentivize quality service.
3. The accessibility of the complaint system should be considered in evaluating agencies.
4. Increase enforcement and oversight of the private collection agencies.
5. Private collection agencies must work to resolve complaints.
The Department of Education contracts with 23 private debt collection companies to collect overdue and unpaid student loans.
In a news release Wednesday, ACA focused on the points regarding complaints:
More debt volume = more contacts = more complaints. Student loan debt now outpaces credit card debt. This increase, along with an increase in volume of delinquent or defaulted debt as a result of the economy, is prompting more consumer contact from collectors than ever before.
Consumer complaints are rising overall, not just for debt collection. Since 2001, overall FTC complaint volume for all industries rose from 325,000 complaints to 1.8 million. In 2002, the Better Business Bureau received 626,000 complaints, of which 10,000 were collection agency related. In 2011, complaints rose to 895,000 overall, of which 17,500 were collection agency related.
New technology has made it easier for consumers to submit complaints. Consumers now have more opportunities to file complaints online or with smartphone applications that make the process far easier than ever to record a complaint for any reason. One new application boasts that it has sent more than 214,000 complaints to the FTC since its inception.
Collectors want to resolve consumer complaints. Debt collectors want to work with consumers to resolve complaints but can’t under the current FTC model. ACA members plan to work closely with the Consumer Financial Protection Bureau to resolve issues presented through the bureau’s proposed complaint resolution system for debt collection complaints.
According to the BBB, which has a complaint resolution model, debt collectors resolve 83% of the complaints received; significantly higher than other industries.
ACA provides information and resources for consumers at www.askdoctordebt.org. Questions are answered by collection experts, and consumers are not asked to register, provide any personal information or pay.
