Trends in debt collection enforcement

Debt collection agencies have come under intense scrutiny throughout the past several years, as government entities such as the Federal Trade Commission continue to field a high volume of complaints. Experts and advocates often cite the growing number of agencies flooding the market as a result of the record high volumes of debt currently held by consumers and businesses as the reason for increases in complaints.

However, experienced debt collection firms can break the stigma by taking a comprehensive approach to client communications and brand management, as well as strict adherence to the Fair Debt Collection Practices Act. With regulators and law enforcement officials coming down hard on fraudulent or illegal practices in the collections sector, firms need to be especially careful when conducting standard protocols.

Don't overstep bounds

The Morning Call recently reported that federal authorities are beginning to increase the number and intensity of investigations into debt collection complaints, and that officials are weighing new legislation to cut down on the number of firms which violate the FDCPA. One such law had to do with the amount that debt collectors could make in profits from student loan-based accounts.

The news provider explained that the Consumer Financial Protection Bureau, which was formed as part of the Dodd-Frank Wall Street Reform Act several years ago, is becoming the key player in the fight against poor collection practices. Officials from this agency continue to urge collection firms to follow the rules as outlined in the FDCPA, as well as any other best practices recognized in states and local areas.

Still, officials understand the utility of the collection market, as some studies indicate that these firms are most responsible for the accessibility to new credit for businesses and consumers in the United States.

"Debt collection activities play an essential role in this system," said Corey Stone, an assistant director at the Consumer Financial Protection Bureau, according to the source. "Without them, credit would be harder to come by and more expensive. Our job is to assure that consumers are not subjected to collection of debts they do not owe or to debts in the wrong amount or that have already been paid."

The Morning Call added that trade groups and advocates in the debt collection sector are working to find common ground between agencies and federal officials to ensure that all actions are both legal and successful in the coming years.

A vow
The New York Times recently reported that the CFPB, as well as the FTC and other federal regulators or law enforcement officials, have vowed to come down hard on abusive debt collection practices. Agencies need to be specifically focused on the details of communications with clients, such as how frequently calls are made and the language employees are using when talking to consumers or businesses.

All components of the FDCPA should be incorporated into the internal policies at each collection agency, while those which take a more progressive approach to customer relationship management and brand image will likely experience fewer issues in the collection process.