John Tonetti: Flow During the Debt Cycle

  • Email
  • Print
  • Printing Articles

    1. Click here to print!
    2. ...or print directly from your browser by choosing File > Print... from the menu or by pressing [Ctrl + P]. Our printer-friendly stylesheet will make sure extraneous website stuff isn't printed.
    3. You're done!

    Close this message.

  • Comments
  • RSS

These are bullet points from John Tonetti’s presentation at the CFPB’s “Life of a Debt” roundtable.

  • Name, address, credit history are all obtained by the original creditor.
  • Creditors may report to consumer reporting agencies; those agencies may share information back to the original creditor.
  • When it works right, those first two bullets are sort of a continual loop.
  • However: when a debt falls past due…
  • Some, but not all, of a consumer’s info is shared with an external/third-party collector.
  • Information that a consumer may have shared with the original creditor may not make it to the collection agency.
  • So, a consumer is being contacted by an entity with whom she has no relationship — until now.
  • Any updates from the collector to the creditor — or the creditor to the collector — is often severely hampered by lag.
  • Most companies have a mechanism to correct errors.
  • The FTC found limits to the types of documents a debt buyer can receive — and how much it would cost for the buyer to get the full complement.
  • No federal requirement that the original creditor be disclosed in a G-notice.
  • A collector the consumer has never heard of for a creditor the consumer has never heard of on a balance the consumer does not recognize — all from a lack of shared data.
  • Banks want audited financials, processes for document handling, resale restrictions.
  • Agencies are feeling pressure from reductions in market share, increased scrutiny, eroding margins, and loss of autonomy.
  • Consolidation to improve economies of scale.

Continuing the Discussion

We welcome and encourage readers to comment and engage in substantive exchanges over topics on Users must always follow our Terms of Use. Also know that your comment will be deleted if you: use profanity, engage in any kind of hate speech, post an incoherent or irrelevant thought, make a point of targeting anyone, or do anything else we find unsavory. Your comment will be posted under your current Display Name, shown below. If you'd like to change your Display Name, you must update it on the My Profile page.

Leave a Reply