At the Debt Connection Symposium in Las Vegas Wednesday, Manny Newburger, of Baron & Newburger, PC, moderated a panel session that included Attorney General staff from Colorado, Arkansas, and West Virginia. The panel covered a wide range of topics such as potential new enforcement activity, the Foti dilemma, and the most common type of consumer complaints received by each office.
In addition, one state assistant AG asked for the industry’s help in tracking down rogue collection agencies.
Laura Udis, First Assistant Attorney General for Consumer Credit in the Colorado Attorney General’s Office, said her office “may” start requiring licenses for debt collection attorneys. They also “may” begin regulating commercial collectors and process servers. Udis also noted that while the Colorado AG currently has the authority to act only in response to complaints, the office “may” expand into conducting proactive compliance audits in the coming year, mirroring the anticipated supervision at the federal level by the CFPB.
Peggy Matson, Executive Director of the Arkansas State Board of Collection Agencies, said her office has proposed new regulations related to the Federal Debt Collection Practices Act (FDCPA) which are currently in the comment period. She says they are on track to get this done during the current legislature.
Norman Googel, Assistant Attorney General, West Virginia Division of Consumer Protection, reported his office has been and will continue to be occupied with enforcement activity as opposed to pushing new regulation, with the possible exception of new rules relating to debt buyers. “We don’t have to go looking for violations; plenty come in the door to keep us busy,” said Googel.
Newburger asked each of the panel members to comment on the Foti challenge. Udis said Colorado has taken a soft enforcement approach to Foti. They have a modified version of the FDCPA that requires a collector to identify themselves within 60 seconds of confirming a right party. Her recommendation seemed to be to simply not to leave voicemails. She did, however, caution against repeated calls, lest they be viewed as harassment.
Matson said they’ve never had a consumer complaint based on Foti in Arkansas, so they haven’t had to take a position on it, nor do they plan to in the current session.
Googel of West Virginia sympathized with the group, conceding, “You deserve clarity on Foti,” and admitting that this is not his office’s biggest focus. He explained that of more significant concern are repeated calls to wrong or third parties.
Panelists also shared the most common debt collection complaints received by their office.
Udis noted that among legitimate collection agencies in Colorado, they have seen a significant reduction in complaints about calling after hours or collectors threatening consumers. What has cropped up as a repeated issue is phone numbers produced by skip tracing technology that turn out to be for wrong parties. She explained that collectors may note the number is incorrect in the record, and they remove it from their system, but there is not an effective method of getting that number blocked so that it doesn’t come up again in the next skip trace round, starting the process again.
In West Virginia, Googel said they have a major problem with consumers receiving calls, “always on Friday,” from non-licensed agencies threatening arrest. His office receives numerous calls from West Virginia residents afraid that they will be spending the weekend in jail.
Matson said the most common complaints received by the Arkansas AG office is “they were rude to me,” as well as calls from collectors to neighbors, employers, or other third parties.
Newburger asked the panel about the “worst” responses they’ve received from collection agencies regarding specific complaints. The answers included “Thank you for bringing this to our attention; we have closed and returned that account to the creditor,” or comments along the lines of “that was a rogue collector and he’s been fired.” The AG staffers agreed they’d like to see polite and detailed factual responses that specifically address the complaint.
Matson suggested that collection agencies shouldn’t say “we never do that,” in response to a complaint. She also said, “Don’t quote the law to us and tell us it’s not a violation. We know the law.”
Matson explained that their intent in forwarding the complaints is simply to get the collection agency’s side of the story. They recognize that the complaints are not always violations of law, but they have an obligation to assist the consumer and help to reach an appropriate resolution of the issue.
Finally, Googel appealed to the group for help in locating rogue collectors. He noted that his office clearly acknowledges the difference between legitimate debt collection agencies who are trying to comply with the law and rogue agencies – many based in India, he noted, though some are in the United States as well – primarily collecting on Internet payday loans.
“We have a common interest to find these people,” Googel noted. “You are the best skiptracers. We don’t have the resources. We’d welcome your help in locating these companies.”