Dec 21, 2018 Phil Burgess
The debt collection industry has expanded rapidly following one of the worst financial crises in the history of the United States that led to record volumes of outstanding credit held by businesses and consumers. While many agencies, especially those that have been around for decades, have kept up with best practices and obliged regulatory compliance, backlash continues to intensify because of illegal or fraudulent activities in certain firms.
The American Association for Retired Persons (AARP) recently announced that it has launched an attack on New York debt collectors who have broken the statutes of the Fair Debt Collection Practices Act (FDCPA), as well as those who have bent the rules too far. The AARP is the latest in what seems to be a never-ending stream of nonprofit consumer advocacy groups and federal agencies that wish to reshape the collection industry.
While debt collection agencies that follow the laws by the books do not have much to worry about, the latest affront on the industry could have implications for businesses that outsource certain related processes to other firms. The source explained that millions of consumers are sued for debts they simply do not owe every year, and that this is a major economic and social issue.
Agencies that do not follow strong chain-of-custody tracking practices and completely ignore the FDCPA can be a liability for their clients, and as such should be avoided. The AARP noted that it wishes to focus on activity in New York to try and reduce the amount of times agencies get the wrong information or take incorrect actions against debtors.
Debt collection agency leaders should be especially vigilant when writing policies, training employees and overseeing daily operations, as the mistake of just one staff member can lead to a variety of headaches and lost face.