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IRS to outsource unpaid tax collection; critics worry about scammers

Admin, 1/19/2016


If you owe back taxes to the IRS, you may soon get a call from a private debt collector.

Congress voted to outsource the work, against IRS recommendations, as part of a new highway funding bill that took effect last month. But critics are concerned scammers could easily pose as IRS tax collectors to fraud people out of their money.

2015 ACA International - Chicago, Nov. 4-6

Admin - 10/01/2015


Never has it been more critical to explore ways to capitalize on your business opportunities in this evolving regulatory environment.


  • In-depth education on maximizing your business success in today’s regulatory-heavy environment

  • Provocative discussion and exchange with leading industry experts and peers

  • Latest updates on legislative and regulatory issues affecting our industry

  • Exhibit hall full of solutions that address your changing business needs

  • 5 Tracks: Healthcare Collections, Legal, Creditors, Performance Excellence & Asset Buyers. Enjoy a tailored education experience that addresses your unique business challenges


Tel: (952) 928-8000
Fax: (952) 926-1624

Legislation to Strengthen Consumer Protections Against Predatory Debt Collection Practices

Admin - 18/11/2015


U.S. Sens. Cory Booker (D-NJ) and Mike Lee (R-UT) introduced the Stop Debt Collection Abuse Act of 2015, legislation that promotes fairness and strengthens protections for ordinary consumers against predatory debt collection practices.


“From unpaid traffic tickets to overdue student loans, debts owed to the government have too often become a license for debt collectors to harass and intimidate well-meaning families who are struggling to get by,” said Sen. Booker.

"There is clear need for a consistent standard for debt collectors that contract with the federal agencies," said Sen. Lee. "Just like the Fair Debt Collection Practices Act protects consumers who owe private debts, this bill would protect individuals who owe debts to the Federal from harassment and exorbitant fees."


The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from consumers. Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them. One of the biggest exemptions to the FDCPA, however, are debt collectors acting to pursue a debt owed to state or federal government entities.


The Booker-Lee bill mandates all federal agencies be subject to the same high standards of the FDCPA. Additionally, it requires a first-of-its kind study of debt collection practices at the state and local level, including of the contracting processes and the efforts of some debt collectors to go after low-income families. This important study conducted by the Government Accountability Office (G.A.O.) would examine the practices of debt collection at the local and state level. The bill would also confirm that debt buyers are debt collectors for the purposes of the FDCPA and prevent debt collectors from charging exorbitant and unreasonable fees.



CFPB Now Extends Debt Collection Pre- Rule Activity Through February 2016

Admin, 11/24/2015


As these things tend to happen on Fridays, the CFPB has once again released its latest rulemaking agenda update. The previous update, in May, extended debt collection rulemaking pre-rule activities from April 2015 until December 2015. This latest update, released today, extends debt collection pre-rule activities schedule through February 2016.



According to the CFPB, the Bureau is  now analyzing the results of a groundbreaking nationwide survey related to consumers’ experiences with debt collection. They are also engaged in consumer testing initiatives to determine what information would be useful for consumers to have about debt collection and their debts and how that information should be provided to them.












Study: Researchers Examine Relationship Between Creditors and Third-Party Collectors

Admin, 12/1/2015


A new report from researchers at the Federal Reserve Bank of Philadelphia finds that creditors may be motivated to outsource collections to third-party agencies because it preserves their reputation while still allowing them to recoup money owed by consumers. The report, “The Economics of Debt Collection: Enforcement of Consumer Credit Contracts” by Viktor Fedaseyeu and Robert Hunt, examines the use of third-party collectors by creditors, the impact of collection practices on consumers and regulations in the industry.


The researchers frequently cited ACA International’s 2013 Ernst & Young study on The Impact of Third-Party Debt Collection on the U.S. National and State Economies. By recovering tens of billions of dollars in delinquent consumer debt each year that would otherwise go uncollected, the third-party debt collection industry generates important benefits to the U.S. economy.

Third-party debt collection agencies play an important role in working with creditors and connecting with consumers to come up with workable payment plans that resolve accounts for all parties.

In 2012, there were about 4,000 active third-party collection agencies in the U.S. In 2013, agencies recovered approximately $55.2 billion in total debt, returning about 80 percent of this amount to creditors. Removing these agency earnings from the total debt recovered leaves nearly $44.9 billion in debt that agencies returned to creditors.

The more a creditor gets third-party collection agencies involved, the more they can rely on that agency’s assertive tactics to recoup more money from consumers, according to the report. While Fedaseyeu and Hunt referred to these proactive tactics as “harsh” throughout the report, they clarified that “Harsh does not necessarily imply the use of illegal, unfair or deceptive practices. It might simply reflect a higher propensity to make phone calls or to obtain garnishments, for example.”







Congress Orders IRS To Use Private Debt Collection Companies

Admin, 12/08/2015


On December 4, 2015, President Obama signed into law the Fixing America’s Surface Transportation Act, or “FAST Act.” It provides long-term funding for transportation projects, including new highways, over a period of ten years. And as you would expect in a bill targeting highways and infrastructure, it also requires Internal Revenue Service (IRS) to use private debt collection companies.










Under current law, IRS already has the authority to use private debt collection companies to locate and contact taxpayers owing outstanding tax liabilities and to arrange payment of those taxes. Historically, farming out collection hasn’t worked out for IRS.

Under the new law, there’s little in the way of discretion: IRS is required to use private debt collection companies to collect “inactive tax receivables.”

Inactive tax receivables are defined as any tax debt that has been;


- removed from the active inventory for lack of resources or inability to locate the taxpayer;
- for which more than 1/3 of the applicable limitations period has lapsed and no IRS employee has been assigned to collect the receivable; or

- for which, a receivable has been assigned for collection, but more than 365 days have passed without interaction with the taxpayer or a third party for purposes of furthering the collection.





CFPB Issues Bulletin on In-Person Collection of Consumer Debt

Admin, 12/22/2015


In conjunction with a recent enforcement action, the Consumer Financial Protection Bureau has released Compliance Bulletin 2015-07 regarding in-person collection of consumer debts. The bulletin advises creditors, debt buyers and third-party debt collectors that in-person collection activities pose a heightened risk of violating the Fair Debt Collection Practices Act (FDCPA) and committing unfair, deceptive or abusive acts or practices (UDAAPs) in violation of the Dodd-Frank Act.



The CFPB asserts in the bulletin that first and third-party debt collectors may run a heightened risk of committing or engaging in UDAPPs by conducting in-person debt collection visits at locations such as the consumer’s workplace or home.  The bulletin explains that an act or practice is “unfair” when, “it causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers and is not outweighed by countervailing benefits to consumer or competition.”

The bulletin states that in-person collections may cause or may be likely to cause substantial injury to consumers. For example, in-person collection visits may result in third parties, such as consumers’ co-workers, supervisors, customers, roommates, landlords or neighbors learning that the consumer has debts in collection. The bulletin observes that when such information is revealed to these third parties, it could harm the consumer’s reputation and potentially result in negative employment consequences if the in-person visit takes place at work.

The bulletin asserts that consumers may find in-person collection visits to be inconvenient and that debt collectors should know of this inconvenience, or perhaps have knowledge that a consumer’s employer prohibits the consumer from receiving such communications at the workplace.



Bipartisan Group of Senators Urges Education Department Not to Use Unsolicited Robocalling for Student Loan Debt Collection Without Evidence of Benefits for Borrowers and Taxpayers

Admin, 12/29/2015


In a bipartisan letter sent to the U.S. Department of Education (ED) today, Senators Elizabeth Warren (D-Mass.), Mike Lee (R-Utah), Orrin Hatch (R-Utah), and Edward J. Markey (D-Mass.) raised concerns about the newly-authorized use of unsolicited "robocalling" to collect student loan debt. Federal law has generally protected individuals from automated, unsolicited robocalling by debt collectors and others, but this consumer protection recently was eliminated as it pertains to the collection of debts owed to or guaranteed by the federal government.


"We are concerned that this provision will subject student loan borrowers to a barrage of unsolicited calls - and possibly leave them with no refuge to stop the calls," the senators wrote. They noted that ED has offered no evidence that robocalling will help borrowers choose the right repayment plan and avoid default, or that it will help the federal student loan program by generating meaningful revenue.

"The Department has an obligation to demonstrate with data that the use of this authority will provide net benefits for both student loan borrowers and taxpayers and will not result in potentially abusive debt collection practices. In the absence of such data, the Department should not direct anyone, including third party debt collectors, to use robocalls to collect student loan debt," the letter states. The senators ask ED to explain the steps it will take to generate data on this issue, and request information about the Department's interpretation of its authority under the new law.







CFPB’s Monthly Complaints Snapshot Shows Trends in Debt Collection, Money Transfer Complaints.

Admin, 1/5/2016



The Consumer Financial Protection Bureau released its monthly complaints snapshot Tuesday, focusing on consumer complaints about money transfers. The report also included data that showed a decline in debt collection complaints.

According to the report, debt collection complaints decreased by 7 percent from October to November 2015.












The CFPB received 6,387 debt collection complaints last month, 403 less than the average monthly volume of 6,790. Similar data from Webrecon also shows a decline in debt collection complaints to the CFPB, ACA previously reported.

As of December 2015, the CFPB reports that it has handled 198,778 debt collection complaints and approximately 770,100 complaints overall.





Consumers With Tax Debt Could See Restrictions on Passport Use

Admin, 1/12/2016


Tax debt collected by the IRS could impact consumers’ access or use of their passport. The Fixing American’s Surface Transportation (FAST) Act includes a provision for the IRS to revoke, deny or limit passports for anyone it certifies as having a seriously delinquent tax debt that is more than $50,000, Forbes reports. “It could mean no new passport and no renewal. It could even mean the State Department will rescind existing passports,” according to the article.

Under the new law, the IRS must use private collection agencies to collect “inactive tax receivables,” which often amounts to tax debt the IRS hasn’t collected in the past due to lack of time or resources, ACA International previously reported. Currently, the IRS is unable to collect $380 billion in tax debt – a 23 percent increase since 2009–according to a July report from the U.S. Government Accountability Office.

Consumers with tax debt that may affect their passport use could be contacted by a private debt collector acting for the IRS, according to Forbes. “The five-year spending bill added increased authorization for private IRS collectors. For some tax debts, the law requires—rather than permits—private collectors,” according to the article.



It's already a problem that cost consumers $20 million to $30 million over the last two years, according to government inspectors.

The agency also tried this approach twice in the past. The new law calls for the IRS to enter into contracts with qualified tax collectors by March.



Department of Education Updates RFP for Debt Collection

Admin, 1/27/2015


Interested businesses now have just less than a month to submit offers to Ed.

The U.S. Department of Education is allowing more time for businesses to submit offers of their debt collection services under a Request for Proposal now due by 5 p.m. (EST) Feb. 16.


According to the RFP, Ed plans to award multiple five-year contracts, with the option of extension, to businesses for default collection services.



Questions on the RFP were due Dec. 21, 2015 but the deadline for offers under the RFP was extended to 5 p.m. (EST) on Feb. 16, 2016. The offers were originally due on Jan. 22. 


Ed’s Office of Federal Student Aid originally posted a RFP in July 2013 for a two-phase solicitation to consider “a number [of] changes in vendor compensation under this procurement focused on improving the quality of service borrowers receive,” according to documents posted on the Federal Business Opportunities website. Ed cancelled that RFP on Dec. 11 and almost immediately posted the new one, ACA International previously reported.



ACA International Report: Third-Party Debt Collection Keeps Credit-Based Economy Thriving

Admin, 2/2/2016


By providing a degree of security to lenders while assisting many consumers with payment plans and other options, research shows that debt collectors play a critical role in a healthy U.S. economy that serves everyone.

Consumers, creditors, and the economy as a whole benefit from the existence of the professional debt collection industry, according to the newest white paper from ACA International, the association of credit and collection professionals.














The white paper “The Role of Third-Party Debt Collection in the U.S. Economy” explores the industry’s role in the U.S. economy, focusing on how third-party debt collectors work in tandem with creditors and consumers to ensure that much-needed credit is widely accessible.

Debt collectors can help consumers with a payment resolution plan that works best for them. “There is often the opportunity to negotiate the total outstanding balance, pay a discounted price on the initial balance, or develop a payment plan with the debt collector as a mediator,” the white paper states.

As a result of this help, third-party debt collectors returned nearly $45 billion to the U.S. economy in 2013. That translates to an average savings of $389 for every household because they didn’t have to pay more for goods and services to offset other consumers’ debts.





Total Bankruptcy Filings Continue to Decrease

Admin, 2/9/2016


U.S. bankruptcy filings are 11 percent lower this month than they were in January 2015, according to data provided by Epiq Systems, Inc. and a news release from the American Bankruptcy Institute.

Total filings reached 52,522 in January 2016, compared to the January 2015 total of 59,092, according to the news release. There were an average of 1,694 total filings per day in January, which is also an 11 percent decrease from the 1,906 average in January 2015. Consumer filings in January 2016 were 49,720, 12 percent less than the 56,611 consumer filings in January last year.




Total bankruptcy filings also declined on a month-to-month basis. The filings in January declined 2 percent compared to the 53,829 total filings recorded in December 2015, according to the news release. There were 49,720 noncommercial filings in January, which is 3 percent less than the 51,169 noncommercial filings in December last year.












2016 DBA International Annual Conference

Las Vegas, Feb. 9-11

Admin - 2/9/2016


Visit Debt Logics booth at 19th annual DBA conference.


Aria Resort & Casino Las Vegas, Nevada

IRS Commissioner Pushes Back Timeline for Private Debt Collection Program

Admin, 02/17/2016


Internal Revenue Service Commissioner John Koskinen told the U.S. House of Representatives Appropriation Committee’s Subcommittee on Financial Services and General Government Thursday that the IRS would not met the statutory deadline of March 1 to sign contracts with private debt collection firms to collect unpaid tax debt. Koskinen testified before the subcommittee in a hearing about the IRS’s proposed budget for Fiscal year 2017.

Instead, Koskinen told the subcommittee that by March 1, the IRS would be able to present to Congress a timeline for implementing the public-private partnership with debt collection companies.



A provision in the Fixing America’s Surface Transportation (FAST) Act – signed into law by President Obama in December 2015 –  mandates that the IRS use private collection agencies to collect “inactive tax receivables,” or tax debt the IRS hasn’t collected in the past due to lack of time or resources.

The IRS is currently designing a program to notify taxpayers that their debt has been given to a private collection company. According to Koskinen’s testimony, when a private collection agency receives an account from the IRS, the IRS will first send a letter to the consumer letting him or her know that it turned the account over to a private debt collector. Then, the debt collection company will send a separate letter to the taxpayer confirming this transfer.

Koskinen also said the IRS is holding a bidder’s conference later this month to meet with potential vendors.







BBB Report: Complaints About Debt Collectors Continue to Decline.

Admin, 02/23/2016


The total number of complaints filed by consumers about businesses such as telephone service providers, auto dealers and collection agencies declined in 2015, according to a report with preliminary data from the Connecticut Better Business Bureau released this week.

Consumers filed 19,803 complaints about collection agencies last year, down from 21,603 complaints in 2014, according to the Connecticut BBB report. The top 10 types of businesses consumers file complaints about remains consistent, and collection agencies ranked fifth last year and in 2014.

The most recent national data from the Council of Better Business Bureaus also shows complaints about debt collectors are decreasing and debt collectors still outrank other industries in complaint resolution, ACA International previously reported.

The Council of Better Business Bureaus data from 2014, released in September 2015, shows that debt collectors have dropped to fifth place among the most complained-about service providers by consumers. The BBB’s 2014 Complaint and Inquiry Statistics also show a dramatic decrease in the number of complaints against debt collectors.

According to the national Council for Better Business Bureaus’ data, debt collectors received 21,576 consumer complaints in 2014. Consumers complained more about cellular telephone service and supplies; telephone communications; television – cable, CATV and satellite; and auto dealers – new cars.

The preliminary 2015 data from the Connecticut BBB mirrors the national findings from 2014. Cellular telephone services and supplies ranked first in the number of complaints with 35,871 in 2015 followed by telephone communications with 28,279 complaints, according to the report.

Collection agencies also ranked fourth among businesses that consumers make inquiries about to the BBB, according to the Connecticut report. Approximately 3.2 million consumers made inquiries on collection agencies in 2014 and 2015, it states.







FCC Distributes Rule Internally on Use of Autodialers by Agencies Collecting on Federal Loans

Admin, 3/1/2016


The rule would be a middle ground between stricter FCC rules on autodialers set last year, which ACA is challenging in a lawsuit, and use of the technology by federal student and mortgage loan servicers.
The Federal Communications Commission recently distributed an internal draft of the rule that would allow collection agencies servicing federal student loans or mortgages to use autodialers to contact consumers,Bloomberg BNA reports.

The FCC is said to have disseminated the draft rule on Feb. 17. “The notice of proposed rulemaking seeks to strike a balance between consumer protections and a Congressional directive to allow companies servicing federally issued student loans or mortgages to use autodialers to contact debtors without the need for consumer consent,” according to the article.

In November, President Barack Obama signed a two-year budget deal, the Bipartisan Budget Act of 2015, that includes the provision to use modern dialing technologies when contacting consumers via cell phone about government-related debts.

The FCC must implement the rule by Aug. 2.







February 2016 Commercial Bankruptcy Filings Increase 32 Percent Over Last Year

Admin, 3/9/2015


Total bankruptcy filings in the U.S. declined just 1 percent in February compared to the same month last year, according to data provided by Epiq Systems, Inc. and a news release from the American Bankruptcy Institute. The filings totaled 64,662 in February 2016 compared to 65,064 in February 2015.

Consumer filings also declined only slightly last month to 61,662 from 62,784 in February 2015.

“However, total commercial filings in February 2016 jumped to 3,000, representing a 32 percent increase from the 2,280 business filings recorded in February 2015,” according to the news release.

“February showed that decreases in total filings are starting to level off, and more businesses are turning to the financial relief of bankruptcy,” said ABI Executive Director Samuel J. Gerdano in the news release.

Month-to-month filings show they increased 23 percent in February compared to the 52,542 total filings recorded in January 2016, according to the news release.



ACA International Releases New FCRA Compliance Guide for Debt Collection.

Admin, 03/14/2016


ACA International, the association of credit and collection professionals, has announced the debut of its new ACA International FCRA Compliance Guide for Debt Collection. Available now exclusively in e-book format, the Guide features important information on the relevant regulatory guidance, court decisions, and consumer reporting agency reforms impacting consumer information furnishers.



Credit and collection professionals can access this version of the Guide by purchasing a 12-month subscription. This format ensures current information easily accessible on a computer, tablet, or mobile device and lets readers browse through chapters to quickly find needed information.


The ACA International FCRA Compliance Guide for Debt Collection is available to all credit and collection professionals, regardless of ACA membership status; but members can receive the guide at a discounted rate.



CFPB’s Cordray Hints at Extended Debt Collection Rulemaking Timeline at House Hearing

Admin, 03/22/2016


The Consumer Financial Protection Bureau’s proposed rule regulating the debt collection industry may not be released until next year, at the earliest, CFPB Director Richard Cordray testified in front of the House Financial Services Committee Wednesday.

During the hearing, U.S. Rep. Blaine Luetkemeyer (R-Mo.) criticized Cordray and the CFPB for what he called “regulation by enforcement” in its recent settlement with debt buying company Encore Capital Group. As ACA previously reported, the settlement includes a civil payment and consumer refunds connected to two isolated issues, which are not in current practice and changed some time ago.


Luetkemeyer said the CFPB based this settlement with Encore on a proposed rule that has not yet been enforced, and that preemptive action adds to the confusion about what the CFPB deems an unfair, deceptive or abusive act or practice (UDAAP).


“The notion that because we may issue the [debt collection] rule several years down the road, or maybe next year, we shouldn’t be engaging in UDAAP, I don’t think is a right approach,” Cordray replied.


At the ACA International 2016 Spring Forum and Expo in Las Vegas last week, ACA’s Vice President and General Counsel Rob Föehl alerted attendees to the possibility of an extended timeline for the CFPB’s rulemaking process for debt collection. Föehl said he anticipates that the next step in the rulemaking process, conducting a small business panel to provide feedback on the CFPB’s policy positions, will occur in 2016.






Total CFPB Penalties Top $5B

Admin, 03/29/2013


Since its inception, the Consumer Financial Protection Bureau (CFPB) has penalized a wide variety of companies and people for violating federal consumer financial protection laws. The CFPB has the authority to issue penalties for violations of a range of laws, but the majority of fines issued to date have been for violations of several specific statutes, most often the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.



The damages assessed by the CFPB vary widely from case to case – the Bureau has issued fines ranging from $1 to over $2 billion to different companies in different circumstances. insideARM has tallied up the penalties and found that, to date, the CFPB has ordered over $5 billion in total penalties since opening for business.




Debt collection complaints outstrip those of mortgages: U.S. consumer bureau

Admin, 4/5/2016


Each month the U.S. agency charged with protecting consumers' finances receives thousands of complaints about debt collection, more than those filed about any other area, and most people say companies have pushed them to pay debts that do not exist.

On Thursday, the Consumer Financial Protection Bureau said that on average it receives 6,785 complaints about debt collection each month, followed by 4,210 complaints related to mortgages and 3,287 on credit reporting.


More than a third of the debt-collection complaints, 38 percent, "had to do with both first- and third-party debt collectors attempting to collect on a debt the consumer reported was not owed."

In other complaints individuals said they were not given enough information to verify whether or not they owed the debt being collected. The agency said consumers also had problems with communications from debt collectors.

As of March 1, debt collection represented 26 percent of all the complaints the bureau has received since people began filing complaints in July 2011, "surpassing mortgages as the most-complained-about product or service," it also said.

The two companies raising the most ire were Encore Capital Group and Portfolio Recovery Associates Inc. The CFPB said that last year it took action against the two large debt buyers for "deceptive tactics."



FTC to mail checks to consumers victimized by alleged debt collection scheme

Admin, 04/12/2016


The Federal Trade Commission (FTC) has announced it will mail 1,701 checks to consumers victimized by an alleged debt collection scheme run by Kirit Patel, Broadway Global Master Inc. and In-Arabia Solutions Inc.


The checks amount to $596,000, an estimated 63 percent of total consumer losses from the scheme. Affected consumers can expect $350.39 and should deposit the checks they receive within 60 days of the mailing date.



The defendants purportedly processed payments for payday loan debts that consumers did not actually owe. In September 2015, a federal court banned these defendants from the debt collection business.


The FTC exists to promote competition, as well as to protect and educate consumers.



Florida Better Business Bureau Issues Alert on Fraudulent Debt Collection Calls

Admin, 04/17/2016


The Better Business Bureau serving west Florida has issued an alert about a fraudulent debt collection operation under the name “ACS Inc.,” in which callers contact consumers by phone and email in an attempt to collect a debt they don’t owe.

The BBB has received more than 1,500 complaints from consumers throughout the U.S. about the callers from “ACS Inc.,” who use numerous other fake company names, according to a news release.

ACA member ACS Financial LLC, a small collection agency based in Seattle, said they are in no way affiliated with “ACS Inc.” and they haven’t received any complaints as a result of the fraudulent calls from “ACS Inc.” A majority of ACS Financial LLC’s accounts are in Washington state.

Consumers reported receiving emails and/or phone calls from people claiming to be from a debt collection agency called “ACS Inc.,” according to the BBB. When consumers ask for validation of the debt, the callers refuse to provide the information.

Consumers contacted by “ACS Inc.” also report the callers used threats to get them to make a payment or provide personal information, according to the BBB. “Some consumers have been intimidated to pay or they will be arrested by the FBI, FTC or other law enforcement agencies,” it reports.

Scammers reportedly used multiple phone numbers and email addresses as well as false names when they contact consumers. As of April 14, there were more than 80 phone numbers and 125 email addresses linked to contact from “ACS Inc.”

The BBB found that the phone numbers and emails are used only for a short period of time to prevent consumers and law enforcement from being able to contact them, according to the news release.



Congressional Leaders, Federal Regulators Discuss Critical Debt Collection Issues at Washington Insights Conference

Admin, 04/26/2016


The ACA International Washington Insights Conference wrapped up Thursday with speeches from members of Congress, federal regulators and policy experts.

U.S. Reps. Marsha Blackburn (R-Tenn.) and Andy Barr (R-Ky.) spoke to attendees about congressional efforts to clarify regulations surrounding the Telephone Consumer Protection Act and increase accountability at the Consumer Financial Protection Bureau. Blackburn was the lead sponsor for ACA’s petition to modernize the TCPA through common-sense reforms in a letter sent to Federal Communications Commission Chairman Tom Wheeler in August 2014.


The ACA International Washington Insights Conference wrapped up Thursday with speeches from members of Congress, federal regulators and policy experts.

U.S. Reps. Marsha Blackburn (R-Tenn.) and Andy Barr (R-Ky.) spoke to attendees about congressional efforts to clarify regulations surrounding the Telephone Consumer Protection Act and increase accountability at the Consumer Financial Protection Bureau. Blackburn was the lead sponsor for ACA’s petition to modernize the TCPA through common-sense reforms in a letter sent to Federal Communications Commission Chairman Tom Wheeler in August 2014.

Barr talked about his recent success in getting the House Financial Services Committee to approve the TABS Act, which would subject the CFPB to the appropriations process.  As ACA previously reported, the bill passed the committee on April 13 with a 33-20 vote.

Thursday afternoon, attendees heard from  Christopher Koegel, Assistant Director of the Division of Financial Practices at the Federal Trade Commission, and Tom Pahl, Managing Counsel for the CFPB’s Office of Regulations. Koegel highlighted the FTC’s role in trying to combat debt collection scams while still allowing legitimate collection companies to do business appropriately.

Finally, a panel of attorneys featuring Brian Meledez of Dykema Gossett, Monica Desai of Squire Patton Boggs and Shay Dvoretzky of Jones Day discussed current regulatory developments around the TCPA. When the Federal Communications Commission released its TCPA Declaratory Ruling and Order in 2015, ACA filed suit seeking judicial review of the ruling.







CFPB Releases Proposed Guide for Student Loan Repayment Options

Admin, 05/04/2016


The guide is open for public comment through June 12 and the CFPB continues to monitor the student loan servicing market for developing potential rules for the industry.

The Consumer Financial Protection Bureau has released a new proposed prototype for repayment options student loan servicers will provide to consumers to ensure they have personalized information, as well as clear and up-to-date details on their repayment plans and loans.

The proposed prototype for outlining repayment options includes:

  • Requiring student loan servicers to provide personalized information tailored to borrowers’ specific circumstances that identify their payment amounts under different repayment plans.

  • Describing each repayment plan option in clear language that makes it easier for borrowers to understand and select the best option based on their financial situation.

  • Providing up-to-date information to borrowers when their plans or circumstances change so they can stay current on their payments.

A public inquiry process for the proposed student loan repayment options prototype is underway.  Borrowers, student loan servicers and other interested parties can submit comments on the proposal through June 12, 2016. Ed will finalize the proposed prototype following the public inquiry process and based on the information it receives from the CFPB.


The CFPB used information from its public inquiry on student loan servicing last year to develop the proposed prototype, according to a news release. ACA International submitted comments in response to the 2015 request for information used to inform this proposal and participated in a field hearing on student loan debt last year. In the comments, ACA made clear that respectful communication using the method most likely to reach borrowers is essential for the successful resolution of student loan debt, an outcome that benefits both borrowers and the economy as a whole.





FCC Releases TCPA Proposed Rule on Government Debt Collection Calls

Admin, 05/10/2016


The Federal Communications Commission released a notice of proposed rulemaking Friday, May 6 on the use of modern dialing technologies when contacting consumers via cell phone about debts owed to or guaranteed by the government – such as student loans, mortgages and taxes.


The proposed rule has been anticipated since President Barack Obama signed the Bipartisan Budget Act into law in November last year. Under the Act, autodialed calls “made solely to collect a debt owed to or guaranteed by the United States,” no longer require the prior express consent of the recipient. The Act allows the FCC to limit the frequency and duration of these calls and directs the FCC, in consultation with the U.S. Department of Treasury, to issue a regulation to implement the amendments to the Telephone Consumer Protection Act within nine months of enactment.

ACA International has long advocated that all lawful businesses making non-solicitation, informational calls to consumers should be able to use modern dialing technology to reach consumers in the way they want to be contacted.

In the proposed rule, the FCC broadly seeks comment on several proposals and implementation questions, such as which calls are covered by the phrase “solely to collect,” how it should restrict the number and duration of such calls, and how to implement such restrictions.

Some of the specific proposals on which the FCC seeks comment include:

  • Interpret “solely to collect a debt” to mean only those calls made to obtain payment after the borrower is delinquent on a payment.  Thus, covered calls would begin when a borrower is delinquent on a payment.

  • Include “servicing” calls as covered debt collection calls.

  • Allow calls only to the person or persons obligated to pay the debt “to ensure that a debtor’s family, friends, and other acquaintances will not be subject to non-consent robocalls seeking information about the debtor.”

  • Exclude calls to persons whom the caller might believe to be the debtor but are not. Inadvertent calls to reassigned numbers would have the same one-call safe harbor consistent with the 2015 TCPA Order.

  • Limit calls to three per month for any initiated calls, even if unanswered by a person.  A caller would be able to obtain consent to make additional calls beyond whatever limit is adopted.

Allow consumers to stop covered calls at any time. Stop-calling requests would apply to a subsequent collector of the same debt, and callers would be required to inform debtors of their right to make such a request.







Auto and Credit Card Delinquencies Increase in First Quarter

Admin, 05/17/2016


The delinquency rates remain historically low, while total credit card balances did reach a record to start this year, according to TransUnion.


First quarter serious delinquency rates for auto loans and credit cards increased to some record amounts in the first quarter this year, but the numbers overall remain historically low, according to TransUnion’s first quarter Industry Insights Report released Wednesday.



The serious delinquency rates for auto loans (60 or more days past due) reached 1.12 percent in the first quarter, marking the first time the figure topped 1 percent in the first quarter since 2011, according to a news release from TransUnion.

Serious delinquency rates for credit cards, accounts that are 90 or more days past due) increased to 1.47 percent in the first quarter. This is highest first-quarter amount since the first quarter of 2013, when serious credit card delinquencies were 1.51 percent. First quarter 2014 and 2015 delinquencies remained stable at 1.37 percent, according to TransUnion. Serious credit card delinquency rates, however, continue to remain below the average first quarter rate of 1.52 percent since the beginning of 2011.

“The oil slump continued to impact consumer credit performance in those states [North Dakota, Texas, Oklahoma] with economies more reliant on the energy sector,” TransUnion reports.

But that is only part of the influence.

“An increase of loans to non-prime credit risk borrowers also has pushed these delinquency rates up,” said Ezra Becker, senior vice president of research and consulting in TransUnion’s financial services business unit in the news release. “Despite the delinquency rises in these credit products, overall levels of delinquency remain relatively low from a historical perspective.”

The year-over-year growth in credit card balances, however, is at a record, according to TransUnion.






Data Shows Second Year of Declines in Consumer Debt Collection Complaints

Admin, 05/24/2016

For the second year in a row, complaints against debt collectors have dramatically decreased and debt collectors have earned a higher complaint resolution rate than the all-industry rate, according to the Council of Better Business Bureaus. The BBB’s new data indicates that debt collection complaints have dropped nearly 20 percent in two years.

The BBB’s 2015 Complaint and Inquiry Statistics show that complaints against debt collectors decreased 8.5 percent from 2014 to 2015. Coupled with the 11 percent decrease from 2013 to 2014, debt collectors have made great strides in improving customer service and reducing the number of complaints. Consumers complained more about: cellular telephone service and supplies; telephone communications; television – cable, CATV and satellite; and auto dealers – new cars, the report said.

According to the data, debt collectors received 19,277 consumer complaints nationwide in 2015. While there is room for continued improvement, this number represents a very small fraction of the one billion contacts made by debt collectors with consumers each year. The vast majority of contacts by debt collectors are amicable transactions that help restore consumers’ good financial standing.

In addition, when complaints do occur, they are resolved more frequently than other industries. The BBB data shows that 84 percent of complaints received by debt collectors in 2015 were resolved. In contrast, the average resolution rate for all industries surveyed by the BBB was 79 percent in 2015.

Recovery of consumer debt by third-party debt collectors on behalf of America’s public, private, and nonprofit sectors has significant effects on our nation’s economic health. Debt collectors are essential to helping businesses that extend credit survive. Third-party debt collectors returned nearly $45 billion to the U.S. economy in 2013. That translates to an average savings of $389 for every household that did not have to pay more for goods and services to offset other consumers’ debts. In addition to the economic benefits, third-party debt collectors are engaged in their local communities as valued civic leaders, employers, volunteers, philanthropists, and taxpayers.


CFPB's Latest Regulatory Agenda Signals Slight Delay in Next Step for Debt Collection Rulemaking

Admin, 05/31/2015

In its most recent regulatory agenda, the CFPB announced that it expects to continue “pre-rule” activities related to the debt collection rule making through June 2016, four months later than its previous estimate, but only one month from when the new update was posted.

The Consumer Financial Protection Bureau has once again updated its plans for regulating the debt collection industry in its recently releasedSpring 2016 Regulatory Agenda.  In the latest agenda, the CFPB states that it now expects pre-rule activities for debt collection to last through June 2016.

“Pre-rule” activities refer to the various activities the CFPB takes before issuing a Notice of Proposed Rule making. Initially, after the comment period for the debt collection Advance Notice of Proposed Rule making concluded in February 2014, the CFPB projected that pre-rule activities for debt collection would end in December 2014.  However, since then, the CFPB has repeatedly pushed back the debt collection rule making timeframe, with the latest projection marking the fourth delay. In the previous regulatory agenda, released in November 2015, the CFPB predicted that pre-rule activities related to debt collection would last through February 2016.


CFPB Releases Proposed Rule on Payday Lending and Other Small Dollar Loans

Admin, 06/06/2016

The Consumer Financial Protection Bureau released its long-anticipated proposed rule on small dollar lending Thursday. The rulemaking covers providers of payday loans, auto title loans, deposit advance products, and certain high-cost installment and open-end loans. Among other things, the proposed rule generally requires that a lender must reasonably determine that a consumer has the ability to repay before making a covered loan, as well as restricts lenders from making repeated payment withdrawal attempts from a consumer’s account.


Specifically, the proposed requirements for lenders covered under the rule include:

  • A full-payment test that would require lenders to determine upfront that consumers can afford to pay their loans without reborrowing.

  • A principal payoff option for certain short term loans and two “less risky” longer-term lending options so that borrowers who may not meet the full-payment test can access credit without accumulating debt.

  • Lenders would be required to use credit reporting systems to report and obtain details on certain loans included in the proposed rule.

  • Lenders would have to give consumers written notice before attempting to debit the consumer’s account to collect payment for any loan covered by the proposed rule. After two straight unsuccessful attempts, the lender would be prohibited from debiting the account again unless the lender gets a new and specific authorization from the borrower.


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