News & Resources

Slowing down is the best practice for debt collectors

Jun 10, 2013 Philip Burgess

Debt collection buyers that rapidly process debtors' accounts are at risk for making mistakes. Recently reported by, millions of debt collection cases could still be subject to litigation even if it's already been challenged in court. This is due to examiners quickly scanning documents relating to debt cases and approving that the information therein is correct without thoroughly checking. It's led to many erroneously signed affidavits.

In fact, one debt collection firm was cited by the article as having some employees churn out 200 to 400 signed affidavits per day. Instead of accurately processing these debt instances, the firm is now involved in a lawsuit that encompasses 1.4 million cases.

Industry leaders claim that the issues have been addressed since the affidavit problem arose in 2009 and it very well may be. However, if debt collection services are not properly processing from day one, they open themselves up to be challenged in court. Even if they win those cases, the headaches and legal fees are not worth the sloppy mistakes.

The Consumer Financial Protection Bureau (CFPB) suggest that debt examiners should asses all documents that feature debtor information. This includes all communications between debtors and creditors, from physical documents to voice recordings or phone calls.

Also, examiners should make themselves aware of all notes that may have been filed by a creditor in the wake of communication with a debtor.

The measures outlined above only apply to entities that are debt collectors, the CFPB states. Debt buyers, creditors and collectors are forbidden from using abusive or deceptive tactics when seeking to amend a debt.

Collectors need to understand the stipulations outlined in various local, state and federal regulations in order to avoid litigation. These enterprises need to make sure each employee is highly trained and knowledgeable of applicable standards.