Mar 07, 2013 Philip Burgess
The credit bubble continues to expand in the United States, leading to increased activity and participation in the debt collection industry. Consumers and businesses hold more outstanding loans today than ever before, while tightening credit has led many lenders to aggressively seek out money owed through collections efforts.
As a result, there has been a recent increase in the number of complaints related to debt collection services, especially as the federal government continues to tighten regulations in the sector. All agencies should ensure that their internal policies are aligned with the Fair Debt Collection Practices Act and remain pertinent in light of new regulations and best practices.
Breaking the stigma
InsideARM recently reported that media coverage of a debt collection story diverged substantially in the beginning of the year, asserting that one form of coverage explained the situation poorly, while another did so properly. According to the news provider, the story surrounded a woman in Texas who alleged that a debt collection agency had used abusive practices when trying to reach her sister, who had died eight years ago.
The source explained that one national media outlet posited that the Consumer Financial Protection Bureau would be cutting down on scams and fraudulent debt collection activities, though this is not necessarily true. The CFPB was formed to oversee activities among the largest, multi-million dollar collection agencies, whereas curbing fraudulent agencies are the responsibility of other entities.
InsideARM noted that a local news station conducted adequate research and found that the complaint itself might have not been accurate, as no records in the Better Business Bureau could validate the allegations, and thus concluded that it was a scam. The source sided with the sound reporting of the local news station, while asserting that the national media outlet only did more to fuel the stigma facing the industry.
Diligence, responsibility breaks stigma
Debt collection agencies have to work against a variety of complexities and difficulties today, especially as the fraudulent or abusive actions of a few have led to widespread negativity among businesses and consumers when approaching such firms. Managers and executives in these agencies need to ensure that they are going the extra mile to ensure legality and adherence to best practices to avoid issues in the future.
Any businesses that do not feel entirely comfortable with the debt collection process should consider outsourcing the tasks to a firm that specializes in the activities, as this will ensure lawful and customer-friendly efforts, thus maintaining strong brand reputations.