An important discussion focused on the National Debt Buyer Certification Program to be launched by DBA International. One consideration was, “How can we allow companies of all sizes to compete, while ensuring that the certification process is strong enough to provide minimum operating requirements for those who do?” Depending upon the finalized certification process, the consensus seemed to be that restricting issuers and resellers of debt to this “approved and vetted group” would go a long way toward ensuring a vital recovery process for all involved.
FTC regulations are necessitating that, as an industry, we create self-policing standards. The Certification Program is intended to be a comprehensive resource for DBA member companies to receive training and continuing education that ensures they are adhering to best practices, the DBA Code of Conduct, and state and federal regulatory standards. DBA members that complete the Certification Program and demonstrate full knowledge of the laws and best practices will receive the designation of “Certified Debt Buyer” (CDB).
Attendees suggested that a debt buying entity and at least one employee should become certified. Other standardization topics included the level of education/knowledge, possible testing and cost (if too high, won’t allow new people into the industry). The next step is for the Certification Task Force to approve and submit the suggestions to the DBA Board. Attendees I talked to are in favor of some standardization and accreditation, including a minimum level of knowledge of the rules, in order to ensure that all act lawfully and thereby improve the overall reputation of debt buyers. They agree that most are providing a valuable service respectfully and lawfully. There are just a few “bad actors” that need to be prevented from unlawful behavior.
The information presented on FTC complaints was very favorable to the industry. The “article” is quite different than the “headline,” one attendee said. The “headline” is that Debt Collection has the most complaints of any industry. The reality is that of the 178,000 complaints reported, 28,000 were from “name unknown” companies. The report said that there were complaints about 54,000 unique companies. This has to be invalid information, because there aren’t that many companies in the industry. The correct information is that 59 percent of the complaints were from government or fictitious agencies (e.g., companies in India). Only 11,000 were actual debt buyers, or six percent of the total. The report also doesn’t differentiate between an inquiry and an actual complaint.
Statistics say that 30 million people in the U.S. have at least one delinquent or charged-off account. We should take 11,000 complaints or inquiries seriously, but that number is not nearly as bad as the original statistics would have people believe. When questioned about the discrepancies, a CFPB representative said, “All the FTC is doing is gathering information.” But they are publishing incorrect information, too, and giving the industry a bad name that it doesn’t deserve. One person surmised that in a month of what it cost the government to look into this, we could have paid off all the people’s debts who complained!
Banning the resale of accounts.
There is an undercurrent in the industry regarding the banning the resale of accounts. Issuers are beginning to prohibit it in their contracts. There has been a lobbying effort from some of the “registry” companies, along with some of the “buy and hold” debt buyers, pushing this agenda in the name of risk mitigation. Some are saying that this raises anti-trust issue.
One person I spoke with commented that if banks include a “no resale policy,” there could be concern regarding whether or not there was ever a “sale” or properly transferred titles of the accounts in the first place. If assets are not transferred with the ability to resell, there is a strong argument that there is no difference between an “inability to resell” and a “lease” agreement with the bank. Furthermore, in this scenario, a consumer group might suggest that the bank still maintains the same levels of responsibility, based upon the fact that the downstream buyer cannot resell the accounts, hence increasing the level of risk for the banks directly.
We encourage other debt buyers to let your voices be heard by commenting here regarding these topics and continuing the discussion!
by Beverly Unrath