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How will the debt collection industry evolve in 2012?

Dec 05, 2011 Mike Garretson

Debt collection activity has been on the rise in recent years, thanks to the scourge of business and consumer debt left in the wake of the recession. Even so, debt collection agencies have faced an increasingly adverse marketplace, what with new regulations, federal oversight, consumer protection measures and media scrutiny. Accordingly, it may be a good time to review some of the trends debt collectors and accounts receivable professionals can look forward to in 2012. At the helm of the industry will be compliance. As attorneys general ratchet up state-level actions against ARM firms, collectors will need to pay close attention to industry news and new regulations. According to InsideARM, there are currently more than 12,000 court filings from consumer litigation alleging violations of the Fair Debt Collection Practices Act and other statutes. "The ARM industry should be prepared for two primary compliance emphases in 2012 - what I refer to as 'client compliance' and the Consumer Financial Protection Bureau," Kimm Bonn, an industry consultant, told InsideARM. "Client compliance denotes the amount of scrutiny and sensitivity that our clients will continue to exert." This includes reviews or audits of customer complaints and disputes, Bonn added, as well as how they are resolved.