One almost universal constant in the industry is that collectors receive a bonus or commission. I have been part of literally hundreds of discussions extolling the virtues of this model or that, and have authored many schemes myself. However, today I propose a new approach. I would suggest the possibility that collectors no longer receive a bonus at all.
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You should probably stop charging convenience fees. You also probably won’t listen to me, or to your compliance team. But convenience fees are proving to be ironically named, and a sure-fire way to involve your agency in a class action lawsuit — at the least.
Collectors on the Department of Education contract tell me the same thing. They have so many options for borrowers; if they could only get them on the phone to discuss! Good collectors are counselors, listening to the consumer and finding the right way to resolve issues. And with student loan repayment options as good as they are- these should all be GREAT conversations with good outcomes for the borrower.
A federal judge in Illinois two weeks ago dismissed an FDCPA class action filed against a debt buyer and its contracted collection agency over the use of the word “transferred” in a collection letter explaining why a new company was attempting to recover the debt. The case had been granted class action status and will be appealed to the Seventh Circuit.
The U.S. Supreme Court has agreed to hear an important case that will decide whether a plaintiff who cannot show any actual harm from a violation of the FCRA nevertheless has standing to sue for statutory damages in federal court. The consequences of the decision will likely extend significantly beyond FCRA litigation and affect numerous other statutes, including the FDCPA and TCPA .
Yesterday the Consumer Financial Protection Bureau (CFPB) issued a report titled “Credit Invisibles” (link to report). The report concludes that one in 10 adults in the United States, or about 26 million consumers, are “credit invisible.” Consumers that are credit invisible do not have a credit history with any of the three nationwide credit reporting […]
Last week insideARM reported on a sharp rise in first quarter earnings for PRA Group (PRAA). On Tuesday of this week (May 12th) in a Form 8-K (Other Events) filing with the Securities and Exchange Commission PRAA reported the following: On May 11, 2015, an unfavorable jury verdict was delivered against Portfolio Recovery Associates, LLC […]
The Second Circuit Court of Appeals ruled yesterday that a debt collector does not violate the FDCPA if it does not advise a consumer of the tax consequences of a settlement offer.
Today the CFPB announced it is launching a public inquiry into student loan servicing practices that can make paying back loans a stressful or harmful process for borrowers. They are seeking information on industry practices that create repayment challenges, hurdles for distressed borrowers, and the economic incentives that may affect the quality of service.
On the same day that the Consumer Financial Protection Bureau (CFPB), the Department of Education, and Department of Treasury release a joint Request for Information (RFI) about student loan servicing, the website MagnifyMoney.com has released the results of a survey of student loan borrowers about their finances. They surveyed 1,000 adults under age 35 who […]
The Commercial Law League of America (CLLA) is pleased to announce that Robert S. Bernstein, of Bernstein-Burkley, P.C., in Pittsburgh, PA, will serve as its 2015-2016 Board of Governors president. This makes Bernstein the only two-term president other than the group’s founder, William Sprague, in 1896. Since joining the CLLA in 1975, Bernstein has held […]
With alarming frequency, patient complaints are making their way up the chain through both for-profit and nonprofit hospitals – all with the support, and in some instances, encouragement, of the Federal government. Hospitals and their service providers are under the mistaken assumption their operations are flying below the CFPB’s radar. Unfortunately, nothing can be further from […]
As big data grows, so does the scale of TCPA violations, and with that the settlements; one of the largest in TCPA history was in the news last week. In a California district court, attorneys who guided consumers in suing a bank for a $32 million settlement were denied a bid to increase their fees to $8 […]
Kaulkin Ginsberg is proud of our longstanding relationship with Rozanne Andersen, Chief Compliance Officer of Ontario Systems. Rozanne’s perspective on the regulatory climate impacting all facets of accounts receivable management (ARM) is unparalleled. The following is an excerpt of her findings written exclusively for KG Prime members. ARM executives are still spinning from the compliance […]
The Consumer Financial Protection Bureau (CFPB) will convene a public field hearing tomorrow in Milwaukee, Wis. to discuss student loans. The field event will feature remarks by CFPB Director Richard Cordray, followed by a panel discussion with consumer groups and industry representatives.
As part of its annual survey of technology adoption in the debt industry, one particular topic jumped out as worth a deeper dive: what are collection agencies doing around payment processing, and what are some pitfalls everyone should be mindful of? This question could not come at a better time — specifically since much has […]
Interactive Intelligence Group Inc., a global provider of collaboration, communications and customer engagement software and cloud services, has released Interaction Collector® for Student Loans. Interaction Collector® for Student Loans helps companies automate the collection process for past-due private and Department of Education student loans. “The flexibility and tracking tools of Interaction Collector® for Student Loans […]
At KM² Solutions, success as a multinational business is grounded in becoming a positive and contributing member of the local communities where the company operates. Its commitment to employees, the environment, and local charitable organizations has become an inalienable part of its operations and strategy. These initiatives are made possible by KM²Cares, the company’s internal […]
Who is your target market? If you answer is “people in the debt industry,” you might be throwing your marketing dollars out the window. Who in the debt industry? What segment? What role? The more you know about your ideal clients and prospects, the more targeted your marketing efforts can be. The more targeted your […]
Collingswood, NJ: Fed Cetera has announced it is seeking minority-owned, small business collection agencies to respond to a Request for Information (RFI) to compete for new business collecting Federal student loans in 2015 and beyond. Such firms may be selected to work as Federal subcontractors on United States Department of Education (ED) Private Collection Agency […]
Even if you aren’t one of the “big guys” you’ll want to be sure to keep yourself out of the headlines. Here are four things that the big agencies do to stay compliant and grow, which you can easily adopt.
Continuing a state regulatory trend, a bill has popped up in the Council for the District of Columbia that would tighten rules related to debt buyers. The complete bill is in the following link: http://lims.dccouncil.us/Download/33762/B21-0190-Introduction.pdf While this bill has quite a way to go before becoming law, we noticed the following elements that are concerning […]
Yesterday the United States Court of Appeals for the Ninth Circuit issued a 3-0 Opinion (add link) in favor of the ARM industry in an FDCPA case entitled Ninth Circuit Opinion in Diaz v Kubler. The appeal involved a suit by a debtor against a debt collector alleging that by sending a collection letter that sought 10 percent interest on the debt the debt collector violated §1692f(1) of the FDCPA and also California’s Fair Debt Collection Practices Act (the Rosenthal Act).
West Virginia had once been described as one of the most treacherous states within which to conduct debt collection business. Collection agencies were frequently sued by consumers for contact after the consumer alleged to have retained an attorney. Some updates to the West Virginia Consumer Credit Protection Act, however, could offer both clarity and protections for collection agencies.
The following is an excerpt from Ontario Systems‘s latest white paper, “Seven Crucial Compliance Conversations for Every Hospital CFO.” Crucial Conversation #2 “Do we credit report? If so, should we stop?” On December 11, 2014, the CFPB conducted a field hearing in Oklahoma City on medical debt collection practices and the relationship between those practices and […]
With Memorial Day quickly approaching, ARMing Heroes (www.armingheroes.org), the collection industry’s charity for military veterans, invites you to publicly honor the dedicated service of a veteran on its Facebook page now until midnight this Monday, Memorial Day. This open invitation may include mentioning a veteran on the page who is still with us, or sharing […]
Republican and Democratic contenders alike recognize the issues associated with the rise in college costs, but they have different viewpoints when it comes to the culprit and solutions to this problem.
[Editor’s Note 1: The following playlist is Tim-Bauer-specific and does NOT represent the (much better) musical tastes of almost anyone else — including a plastic case of goose eggs that can’t even hear music – in this company. THIS IS NOT OUR FAULT.] Hello again everyone. This is my latest blog posting for insideARM. I never […]
John Schanck Chairman of Stellar Recovery announced today Richard Sleeth has joined the company as Executive Vice President of Business Development. Sleeth brings over 12 years of industry experience and has been very successful in working with Fortune 500 Companies. I am extremely excited to join the Stellar Team and look forward to working with […]
A decision will likely impact litigation under the FDCPA, TILA, EFTA and other federal laws, which can expose financial services companies to extraordinary liability even though the injured party has suffered no real loss.