Western States Association of Tax Administrators Conference

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Attending the upcoming Western States Association of Tax Administrators conference coming up October 23th – 26th in Spokane, WA? Stop by and visit Joe Del Bene to drop your business card for some great giveaways, coffee on us and info on how we can help your organization increase recoveries.

 

Regulation F and Debt Collection Practices

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What is Regulation F and How It Impacts Debt Collection Practices?

The Consumer Financial Protection Bureau (CFPB) has recently finalized two rules, known together as Debt Collection Practices (Regulation F), which impacts the Fair Debt Collection Practices Act (FDCPA). This is the biggest change to the debt collection industry since the inception of the FDCPA back in 1978 and went into effect back on November 30, 2021. To help you understand these changes and the impact it has on your current debt collection practices we have provided five key aspects on the new debt collection rule.

1) The debt collection validation notice

When a debt collector first communicates with a consumer, or shortly thereafter, they’re generally required to provide certain information about the debt. When the information is provided in writing or electronically, it is called a validation notice, and it will generally include information like:

  • Name and mailing information of the debt collector
  • Name of the creditor to whom the debt is owed
  • Account number (if any) associated with the debt
  • An itemization of the current amount of the debt that reflects interest, fees, payments, and credits since a particular date that you may be able to recognize or verify with records
  • The current amount of the debt as of when the validation notice is provided
  • Information about the consumers debt collection rights including how to dispute the debt

2) How often can a debt collector call a consumer?

The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from repeatedly or continuously calling consumers with the intent to harass, oppress, or abuse consumers. Under the Debt Collection Rule, collectors are presumed to violate the law if they place a telephone call to consumers about a particular debt more than seven times within a seven-day period, or within seven days after engaging in a phone conversation with a consumer about a particular debt. These call frequency presumptions only apply to calls placed by the collector to the consumer. It is important to note that they don’t apply to text messages, emails, and other types of media.

3) Reporting a consumer’s debt to a credit reporting company

There are certain steps debt collectors must take before they can report a debt to a credit reporting company. They must do any of the following:

  • Speak to the consumer by telephone or in person about the debt
  • Mail a letter or send an electronic communication about the debt and wait for a reasonable amount of time, generally 14 days, in case it is returned as undeliverable

If the debt collector sends a consumer a validation notice, it means that they’ve satisfied their requirement to contact the consumer and, in general, can begin reporting the debt to credit reporting companies, provided they follow other laws about credit reporting.

4) Contacting a consumer on social media about a debt

Debt collectors must follow certain rules if they contact consumers through social media, including:

  • Keeping the messages private – Their messages to consumers must be private and not viewable by the general public or by the consumer’s friends, contacts, or followers.
  • Identifying themselves as a debt collector – If a debt collector attempts to send a consumer a private message requesting to add the consumer as a friend or contact, the debt collector must identify themself as a debt collector.
  • Providing a way for the consumer to opt out of their communications – They must also provide the consumer, in each message, a simple way to opt out of receiving further communications from them on that social media platform.

5) What is a limited-content message?

A limited-content message is a type of voicemail that a debt collector may leave for the consumer that must include specific information. Limited-content messages must include:

  • A business name that does not indicate the caller is a debt collector
  • Telephone number(s) the consumer can use to return the call
  • A request that the consumer reply and the name(s) of who the consumer can contact to reply

There is also some optional information they can include, including suggested dates and time for the consumer to reply. Voicemails that do not follow these rules are not considered limited-content messages.

Importance Of Working with a Compliant Collection Agency

Now more than ever it is important to work with a complaint third party collection agency partner like Integral Recoveries that is well versed with all of the changes that had gone in effect with Regulation F. Integral Recoveries has been providing effective accounts receivable management solutions since 1995. Our mission is to resolve past due accounts utilizing state of the art information gathering, effective negotiations and persistence. We take a strategic approach to debt recovery and every account is researched thoroughly by experienced professionals in order to take the most effective course of action. Contact us if you would like to learn more about our services.

 

 

 

 

Mistakes to Avoid When Putting Together an RFP

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Selecting the right third-party vendor is critical for any organization. Making the wrong decision can led to many long-term negative consequences for your firm. The contracts or agreements that you will enter into with these service providers can last several years and will often require a long-term commitment on your part. This makes the selection process especially important. So how can your organization make sure the procurement process is an open and transparent process? How can you ensure your selection process will lead to a positive outcome?

 

Most industries will make purchasing decisions by issuing a Request for Proposal (RFP). There are many benefits of using an RFP process.

  • Offers a level playing field.
  • Enables focus on specific criteria
  • Offers the potential to discover new vendors.

 

Using an RFP process also allows the procurement process to limit interactions with vendors prior to their submissions and typically any vendor is allowed to submit a proposal. This helps create a competitive and open evaluation process of potential service provider for your organization. While this is a standard procurement practice for many different industries, when writing an RFP, the challenge is knowing what items or value-added services you will need to focus on and gather in the evaluation process. For example, in the collection industry where it is a service-based offering and not a commodity, solely looking at lowest price can often lead to picking the wrong vendor. In many cases it is not an apples-to-apples comparison when only comparing cost.

 

As a resource to assist with the process, Integral Recoveries has identified some specific mistakes that your organization should avoid when putting together an RFP.

 

1) Evaluating Potential Vendors Solely on Price – While price is an important differentiator, it should not be the main factor in selecting a collection vendor. Why? In the collection industry, low price often leads to low rate of return. Integral Recoveries has put together a detailed explanation of “Net Back Dollars” and why it is important in selecting the right collection agency partner. It can be found on our website Learn More About Net Back. It might be in the organizations best interest to set the price they would like to pay for this service in the RFP. With price being constant, this will allow you to focus on other important value-added services that a collection agency can provide to your organization.

 

2) Don’t Disqualify Potentially Good Vendors Based on their Size – Avoid setting stringent qualifications or requirements that can not be met by many vendors. Why potentially disqualify good candidates from the RFP process? For example, only looking at vendors who have a certain annual revenue or a minimum employee head count. A large firm does not always equate to superior performance as well as customer service. In fact, many smaller firms that have fewer clients to service and maintain could provide you with better customer service and a higher rate of return. Integral Recoveries has put together a list of items to help you find the right collection agency that can be found on our website. Finding the Right Collection Agency

 

3)  Limiting Potential Vendors Based on their Location – Location of the collection agency should not be a primary factor that is used for consideration and selection. Most collection agencies do have the ability to operate in other states. Ask if they are licensed and able to collection nationally. Limiting vendors solely based on location can often disqualify potentially good candidates. Remember the goal of an RFP is to create an open and competitive process.

 

4) Implications of Subcontracting or Having Off-Shore Centers – Firms subcontract or have off-shore call centers to reduce overhead costs. If you use a vendor that often utilizes a subcontractor, you have no direct control over the quality of subcontractors’ work which might lead to inferior performance. Does the vendor operate any call centers that are located outside the county? If so, this could create potential issues for your organization such as bad customer service, increasing number of customer complaints or lack of accountability.

 

5) Not Focusing on a Vendors Compliance and Client Retention Policies – It is important to find out if the potential vendor operates in a complaint manner. Will their services be performed in accordance with all federal and state laws and regulations? Does the collection agency maintain an “A+” rating and is an accredited member of the Better Business Bureau? Are they committed to resolve customer complaints or disputes in a timely manner? Have they had any court-litigated actions filed against them or have they had any clients terminate their services early? These are all factors that should be considered when looking at different collection agencies and part of any RFP selection process.

 

Integral Recoveries has been providing effective accounts receivable management solutions since 1995. Our mission is to resolve past due accounts utilizing state of the art information gathering, effective negotiations and persistence. We take a strategic approach to debt recovery and every account is researched thoroughly by experienced professionals in order to take the most effective course of action. Contact us if you would like to learn more about our services.