How debt collectors can combat industry scammers
Oct 05, 2013 Philip Burgess
Any industry that is rife with scams and fraudulent activities will suffer from a lack of trust among the general public. This is the current state of affairs for the reputable debt collection agencies in the United States. False collection groups have become increasingly active, taking advantage of consumers by accessing their bank accounts and making individuals pay for debts they do not own.
It's a major problem for the industry and a number of business advocacy groups have warned debt collectors about the negative trend. The Tucson Citizen recently reported that various Better Business Bureaus - including the Southern Arizona chapter - have noticed a sharp increase in collection scams in recent months.
Certainly, educating individuals would help, but it is hardly the only step that should be taken to combat these scams. In addition to the BBB's actions, there are a number of strategies collection agencies can employ to ease consumers' concerns and outline their legitimacy. Not only will help professionals close accounts, it may enable them to promote the overall reputation of the industry.
Get information ready
As consumers become more educated, they will likely start to ask for credentials from collectors when they make initial contact. For this reason, insideARM suggested that collectors should have easy access to their credentials and be ready to divulge all relevant information relating to an agency's operations. This includes the company's name, address and contact information. Also, agents should be ready to send borrowers a validation notice that complies with the Fair Debt Collection Practices Act (FDCPA).
Consider statutes of limitations
Each state has different statute of limitations that regulates the collection of outstanding debts. What is allowed in one state may not be applicable in another. For this reason, it's important to know that claims made to consumers are valid. For example, saying that a debt must be repaid is not necessarily true if the statute of limitations has run out. Certainly, these accounts can still be pursued, but it could be a violation of the FDCPA to claim that a debtor must make a payment on an expired debt.
Think about normal procedures
According to insideARM, it may be a good idea for collection firms to analyze their standard policies and procedures due to the latest scams. More consumers are starting to become familiar with the FDCPA, which means violations made mistakenly could land an agency in hot water. Simply because a practice has been in place for a number of years does not mean that it is totally compliant or even legal. To avoid litigation, collection leaders should audit their practices.
Collaborate, don't agitate
One of the best ways for collection agents to show a consumer they are professional is by adopting a constructive and collaborative tone when discussing debts. Making threats and being disrespectful is a surefire way to get a consumer to avoid future calls, making it difficult to close accounts. More importantly, it's illegal under the FDCPA. Therefore, collectors should be ready to warmly greet debtors and inform borrowers they are prepared to construct a payment plan that is reasonable for both parties.
Training never hurts
It may sound like a broken record, but FDCPA compliance is integral to enhancing the reputation of the collection industry. For this reason, it may be important for agency executives to invest in training for employees, even the most tenured professionals. Regularly reviewing the various laws associated with debt collection will only better prepare an agent to address accounts. With so many scams taking place and consumers starting to take note, it's more important to comply with the FDCPA than ever before.