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The right collection transparency can put debtors at ease

Jul 08, 2013 Philip Burgess

The right collection transparency can put debtors at ease

For many Americans, having outstanding debts can be stressful. Often, it can prevent a consumer from purchasing a car, home or other major product that so many connect to success. When debt collection agencies get involved, some debtors panic, as they misconstrue how the industry operates.

However, collection agents can enhance their reputations and boost production if they are as honest and open as possible about the collection process. Many in-debt consumers believe that the industry aggressively seeks to close accounts, placing little value on the standing of the debtor. It's a common misconception that could be easily addressed.

Derek Schmidt, the Attorney General of Kansas, recently released a statement that highlighted a boom in debt collection scams across the state. Most involve phone calls from overseas sources that target residents while they are at work. Some even state that the consumer will be arrested if payments aren't made.

Under the Fair Debt Collection Practices Act (FDCPA), this sort of activity is illegal. To combat the sentiment of fear many consumers hold of collection firms, agents should comply with FDCPA standards and make sure they are addressing debtors in a respectful and helpful tone.

As Schmidt suggested, consumers should avoid taking calls from unknown or unlisted numbers. For this reason, it's important for agencies to follow all industry-wide best practices. Additionally, collectors are required to disclose written proof of debts. Providing such material voluntarily could boost an enterprise's credibility among some consumers.

Consider industry groups

Many industries establish collaborative organizations in which member companies discuss best practices and formulate guidelines for all enterprises to follow. The Omaha World-Herald recently reported that one local debt collection agency is a member of ACA International - a collection industry group.

Its main focus is providing consumers with the knowledge to make better financial decisions, particularly when managing debts. Also, it is creating a system to better resolve complaints from the public, the source stated.

Such organizations may not be a viable option for some debt collection agencies. However, they provide a level of monitoring and credibility that can make consumers feel that their debts are being handled professionally and legally.

Collection agents that fail to act in a respectful manner do little ensure their success. Consumers will avoid working with such individuals, leaving accounts open and collection agents unproductive.