Moderator: Corey Stone, CFPB
- Chad Benson, CBE Group
- Ian Lyngklip, Lyngklip & Associates
- Richard Munroe, Capital Financial Group
- Manuel Newburger, Barron & Newburger
- Denise Norgle, TransUnion
What are steps collection agencies currently take when verifying disputed debts?
What are the cost benefits of taking these steps?
How does info degrade?
- Complaints are down in our industry.
- Can we find a way to continue to improve the consumer experience?
- Lots of different systems under the construct of one process.
- The system as a whole is fundamentally working for the population.
- Standards are extremely important.
- Consumer attorney
- We’re talking about injecting bad debt — debt that isn’t owed, is time-barred, out of stat — into the system. It’s toxic to the system.
- We have a legal landscape to help us. We know what accurate data is.
- Obligation to only supply accurate and true data.
- When subscriber code/account code change, we relegate consumers to having to re-verify-re-dispute.
- Most important fix: consumers must be allowed to correct a credit report.
- Data conformity is not a surrogate for accuracy.
- DBA is insisting on standards.
- Bad/toxic debt does none of us any good.
- Disputes exist. They need to be handled via best practices and standards.
- Is a general denial a dispute?
- Degree of verification, etc. — this definitional issue becomes very important.
- If we don’t have clearly defined standards and guidelines, you won’t have compliance.
- There needs to be a level playing field: What’s good enough for a failed bank needs to be good enough for a thriving bank.
- Document retention should be seven years.
- Needs a regulatory push.
- Our overarching goal is accuracy of data.
- The more information we can get, the better the chance we have to get it right.
- The more consumer data we have, the better chance of connecting consumer accounts to the correct consumer.
- The number one dispute from consumers is: We don’t recognize the debt.
When’s an FDCPA dispute a dispute?
- If a consumer contacts an agency or debt buyer, the process for stopping collections at that time is of most importance.
- As well as the steps for investigation. We’d return that account to the creditor.
- You have to be communicating with the consumer — talking about the issuer, the balance.
- [When do you know it's a dispute that you need to resolve? Is there a clear definition?] No. The challenge is being able to walk through the conversation. You can’t point to one thing. There are multiple aspects.
- The quality is not the issue. It’s not what we came here to discuss.
- We have to make a process that works for the majority of consumers.
- [The consumer reporting fallout is important, but earlier in the process: what's a dispute?] If someone says I dispute the debt, then the debt is disputed.
- As part of verification process, it’s at that point that you go through research.
If you’re a debt buyer, and you receive data, and that’s the data you rely on to investigate — have you satisfied the requirement?
- You can only work with the data you have.
- I’m not familiar with as-is sales.
- You may find a lack of some data.
- Portfolios can change dramatically.
- Banks typically not selling disputed accounts; DBA against selling disputed accounts.
- The original trade-line is still there.
- Over last five years seen marked improvement in how debt buyers code accounts.
- By the same token, the banks are doing a terrible job.
- The consumer needs the right/ability to fix his credit report.
- Consumers do have more remedies to remove items from their report.
- We can change and delete information.
- In terms of the remedies: there are a lot of times where we’re in a lawsuit with the original creditor and the debt collector. We can suppress a item on a credit report until that issue is resolved.
What do we know about that forwarding about information around disputes?
- Mine are required to report/communicate disputes.
- When we’ve exhausted information available to us, we will close that account.
1) What form of review do you propose from/by creditors/debt buyers to ensure accuracy?
- Depends on context.
- In fair credit context: consumer writes a dispute to credit reporting bureau, bureau contacts collectors.
- Just verifying data isn’t meaningful
2) What are best practices for recognzing when a dispute falls under FDCPA, FCRA, or both?
- FDCPA is easy. If consumer says “I dispute ” then it’s an FDCPA dispute.
- FCRA and data-furnisher rule: there are procedures in place.
3) What is the obligation of a collection agency in the event of a dispute? (I.e.: interest, fees, etc.)
- If they’re trying to collect, they should be in a position to explain it to a consumer.
- Additional interest can be itemized.
- A consumer that doesn’t recognize a balance: “You’re not a customer any more and we don’t have to service you.”
- Collection agencies are not there to drive level of consumer customer service.