FIRST ARTICLE
There was a mood of disconnect at the Federal Trade Commission workshop on the debt collection industry as consumer advocates on one side and industry reps from collections agencies and law firms on the other discussed the state of the industry.
The consumer advocates were joined by defense attorneys in charging the collection industry with violating the FDCPA and filing masses of lawsuits against consumers.
More than 90 percent of the law suits in a court of Broward County in Florida were filed by attorneys seeking to collect consumer debts, according to Robert W. Murphy, an attorney that represents consumers in Florida.
_We see an explosion of collection lawyers filing lawsuits against consumers,_ said Murphy. Many of the suits are filed with little documentation to prove the consumer owes the debt, he said.
Ira Leibsker, an attorney with Blatt, Hasenmiller, Leibsker, and Moore, LLC, and president of the National Association of Retail Collection Attorneys, said that the vast majority of suits follow the rules. _Yes, we are seeing more suits but not less compliance,_ said Leibsker. Leibsker said law firms have increased their communications with consumers in the last 30 years as they seek to work out a claim.
The National Consumer Law Center has said that a suit should include the consumer's proof of indebtedness; the date the debt was incurred and the last payment; the identity of the original creditor; the amount of the debt principal along with an itemization of all fees and charges; and the chain of the title of the debt if it was sold.
Murphy also charged collectors with routinely violating the FDCPA by continually contacting consumers despite pleas for the calls to stop.
Leaders of collection agencies said that the vast majority of agents act within the FDCPA rule. The idea is to help the consumer pay their bill and leave the collection process. The best way to do that is to work with the consumer, not abuse them, said Mark E. Davitt, president and CEO of Conserve. _We don_t like the cowboys either,_ said Davitt. _This is a consumer service environment. We have to contact the consumer, work with them and do it in a consumer friendly environment._
_There are a small number of violations. But more than 99 percent are in compliance,_ said Robert L. DiGennaro, CEO, Collins Financial Services. _Let_s look at that instead of the less than 1 percent of violations._
Christopher G. Wunder, president and CEO of Receivables Outsourcing Inc. and president of ACA International, noted that a 2006 survey by the Better Business Bureau found that of 280,000 inquiries on collection agencies, about 14,000 were complaints. When these consumers were asked if they were satisfied with the resolution of their complaints, 85 percent said "yes." In comparison, 73 percent of those that complained about other industries were satisfied with the resolution of those complaints, said Wunder.
The FTC has said it convened the two-day _Collecting Consumer Debts: The Challenges of Change_ workshop to get a better understanding of a business that generated nearly 70,000 consumer complaints last year. The agency is also seeking to review the 30-year-old FDCPA in light of the revolution in communications technology of recent years.
SECOND ARTICLE
They could never get on the same page.
A final panel at the Federal Trade Commission_s workshop on collections this week was designed to put a cap on the event with representatives from interest groups coming to some agreement over major topics facing the industry.
But initial consensus gave way to gulfs of disagreement as the panelists began drilling down to the details. Still, the last discussion showed a marked tone of collegiality compared with previous panel debates where consumer advocates threw stories of consumer abuse at collection agency owners at a loss to defend the industry against anecdotal complaints.
Gary E. Wood, president of Collins Financial Services and president of trade group DBA International, applauded the FTC for convening the conference and summed up the positive aspects of the event.
_We agree that we need better compliance (with the rules), better communication and that the FTC enforce the law,_ said Wood. _We may have slipped off on some individual cases but we fight like the devil to keep members from misbehaving._
Peggy L. Twohig, associate director of financial practices at the FTC, charged the final panel made up of representatives from the collection industry, consumer advocates, creditors, state regulators and attorneys with listing the three top topics they would like to see coming out of the workshop.
Rozanne M. Andersen, legal counsel for trade group ACA International, introduced the idea of giving the FDCPA federal preemption, assuring the packed room of attendees that this would not preclude state oversight of collection agencies.
This drew agreement until Colorado state regulator Laura Udis who argued that her state_s rules on the industry often times bettered that of the FDCPA and contended that individual states could act quicker in investigating and enforcing rules.
A suggestion that the rules on communications with debtors be modernized to allow for contact through mobile phone and email drew nods of agreement. The collection industry also asked for clarification on time of contact rules, as a consumer living on the West Coast may have a cell phone number with an East Coast area code. Cell phones and email had yet to be invented 30 years ago when the FDCPA was implemented.
These ideas received push-back from some consumer advocates who contend that allowing for contact by cell phone and email will lead to 24-hour harassment of consumers.
Panelists did agree when Wood suggested greater research on the industry so anecdotal evidence could be replaced with hard numbers. The FTC called the workshop in response to the nearly 70,000 consumer complaints it received on collectors in 2006, the most of any industry. And there was some agreement over the need for improvements in verifying information on the debt and the debtor when collectors seek to take a consumer to court for a debt. Twohig acknowledged that details on consumer information still had to be worked out.
Going forward, the FTC will analyze the information presented at the conference to absorb what was heard, said Twohig. The agency has several options, including proposing that Congress change the law; it can ask for more discussion, whether formal or informal, from interested parties; or it could explore other legal options.
The agency also may participate in Wood_s call for more research though it would have to review the resources it could devote to such a project, said Twohig.
_We will review (the conference discussion), to determine the critical issues and devise a plan,_ said Twohig. _There were a lot of disparate views and a lot of contradiction._
There was a mood of disconnect at the Federal Trade Commission workshop on the debt collection industry as consumer advocates on one side and industry reps from collections agencies and law firms on the other discussed the state of the industry.
The consumer advocates were joined by defense attorneys in charging the collection industry with violating the FDCPA and filing masses of lawsuits against consumers.
More than 90 percent of the law suits in a court of Broward County in Florida were filed by attorneys seeking to collect consumer debts, according to Robert W. Murphy, an attorney that represents consumers in Florida.
_We see an explosion of collection lawyers filing lawsuits against consumers,_ said Murphy. Many of the suits are filed with little documentation to prove the consumer owes the debt, he said.
Ira Leibsker, an attorney with Blatt, Hasenmiller, Leibsker, and Moore, LLC, and president of the National Association of Retail Collection Attorneys, said that the vast majority of suits follow the rules. _Yes, we are seeing more suits but not less compliance,_ said Leibsker. Leibsker said law firms have increased their communications with consumers in the last 30 years as they seek to work out a claim.
The National Consumer Law Center has said that a suit should include the consumer's proof of indebtedness; the date the debt was incurred and the last payment; the identity of the original creditor; the amount of the debt principal along with an itemization of all fees and charges; and the chain of the title of the debt if it was sold.
Murphy also charged collectors with routinely violating the FDCPA by continually contacting consumers despite pleas for the calls to stop.
Leaders of collection agencies said that the vast majority of agents act within the FDCPA rule. The idea is to help the consumer pay their bill and leave the collection process. The best way to do that is to work with the consumer, not abuse them, said Mark E. Davitt, president and CEO of Conserve. _We don_t like the cowboys either,_ said Davitt. _This is a consumer service environment. We have to contact the consumer, work with them and do it in a consumer friendly environment._
_There are a small number of violations. But more than 99 percent are in compliance,_ said Robert L. DiGennaro, CEO, Collins Financial Services. _Let_s look at that instead of the less than 1 percent of violations._
Christopher G. Wunder, president and CEO of Receivables Outsourcing Inc. and president of ACA International, noted that a 2006 survey by the Better Business Bureau found that of 280,000 inquiries on collection agencies, about 14,000 were complaints. When these consumers were asked if they were satisfied with the resolution of their complaints, 85 percent said "yes." In comparison, 73 percent of those that complained about other industries were satisfied with the resolution of those complaints, said Wunder.
The FTC has said it convened the two-day _Collecting Consumer Debts: The Challenges of Change_ workshop to get a better understanding of a business that generated nearly 70,000 consumer complaints last year. The agency is also seeking to review the 30-year-old FDCPA in light of the revolution in communications technology of recent years.
SECOND ARTICLE
They could never get on the same page.
A final panel at the Federal Trade Commission_s workshop on collections this week was designed to put a cap on the event with representatives from interest groups coming to some agreement over major topics facing the industry.
But initial consensus gave way to gulfs of disagreement as the panelists began drilling down to the details. Still, the last discussion showed a marked tone of collegiality compared with previous panel debates where consumer advocates threw stories of consumer abuse at collection agency owners at a loss to defend the industry against anecdotal complaints.
Gary E. Wood, president of Collins Financial Services and president of trade group DBA International, applauded the FTC for convening the conference and summed up the positive aspects of the event.
_We agree that we need better compliance (with the rules), better communication and that the FTC enforce the law,_ said Wood. _We may have slipped off on some individual cases but we fight like the devil to keep members from misbehaving._
Peggy L. Twohig, associate director of financial practices at the FTC, charged the final panel made up of representatives from the collection industry, consumer advocates, creditors, state regulators and attorneys with listing the three top topics they would like to see coming out of the workshop.
Rozanne M. Andersen, legal counsel for trade group ACA International, introduced the idea of giving the FDCPA federal preemption, assuring the packed room of attendees that this would not preclude state oversight of collection agencies.
This drew agreement until Colorado state regulator Laura Udis who argued that her state_s rules on the industry often times bettered that of the FDCPA and contended that individual states could act quicker in investigating and enforcing rules.
A suggestion that the rules on communications with debtors be modernized to allow for contact through mobile phone and email drew nods of agreement. The collection industry also asked for clarification on time of contact rules, as a consumer living on the West Coast may have a cell phone number with an East Coast area code. Cell phones and email had yet to be invented 30 years ago when the FDCPA was implemented.
These ideas received push-back from some consumer advocates who contend that allowing for contact by cell phone and email will lead to 24-hour harassment of consumers.
Panelists did agree when Wood suggested greater research on the industry so anecdotal evidence could be replaced with hard numbers. The FTC called the workshop in response to the nearly 70,000 consumer complaints it received on collectors in 2006, the most of any industry. And there was some agreement over the need for improvements in verifying information on the debt and the debtor when collectors seek to take a consumer to court for a debt. Twohig acknowledged that details on consumer information still had to be worked out.
Going forward, the FTC will analyze the information presented at the conference to absorb what was heard, said Twohig. The agency has several options, including proposing that Congress change the law; it can ask for more discussion, whether formal or informal, from interested parties; or it could explore other legal options.
The agency also may participate in Wood_s call for more research though it would have to review the resources it could devote to such a project, said Twohig.
_We will review (the conference discussion), to determine the critical issues and devise a plan,_ said Twohig. _There were a lot of disparate views and a lot of contradiction._