Jeff Dickey is the EVP of Marketing and Sales for Persolvo Data Systems in Irvine, CA. Persolvo is the largest aggregator of debt settlement account information of consumers enrolled in debt settlement programs. Persolvo’s web-based collection system, CONCERTO 3.0, allows creditors, collectors and debt buyers to locate, analyze and settle debts with hundreds of debt settlement companies in a secure, compliant manner.
In each of the past two years, insideARM.com has conducted a survey of the ARM industry to better understand how these companies are utilizing debt settlement providers to increase collections. In each of these surveys, roughly 50% of survey respondents indicated that they now engage debt settlement providers as part of a strategy to locate collection accounts and increase collections through the use of these third party service providers. While this adoption is significant, still, roughly half of the firms responding to the surveys each of the past two years indicated that they still did not work with debt settlement companies as part of their collection strategy.
We here at Persolvo were very interested in the process insideARM used, and the conclusions it reached in its investigation into the FTC’s complaints data. The debt settlement industry finds itself in similar waters. Historically, the debt settlement industry has enjoyed a less than stellar reputation in the eyes of most ARM professionals. While that’s softening a little, in our most recent survey of ARM professionals, over 30 percent of those who do not use a debt settlement company as part of their complement of services said it was due to “legal concerns (FDCPA) about dealing with third parties.”
There has been a great deal of prognostication on this site and others as to what impact CFPB supervision will have on the ARM industry. One thing that hasn’t been covered is the impact on service providers to the larger market participants.
For more than a year now, ARM industry participants have been reading about initiatives by the CFPB to further regulate various aspects of the financial services industry. One of these initiatives was to create a new tool — an online complaint system — to gather consumer complaints.
I have often wondered how effective this type of online system was for consumers who had initiated a complaint. Well, I recently got a chance to experience the system firsthand…as a consumer.