FTC Remains Top Cop as ACA Floats Self-Reg Concept

The Federal Trade Commission weighed in today on the idea of trade organization ACA International to establish itself as a self-regulatory organization, emphasizing that the FTC would be the primary enforcer of the FDCPA and federal rules covering collections agencies.

Thomas Kane, senior attorney of the FTC’s division of financial practices, told insideARM.com that there would be no change in the FTC’s role in collecting complaints, educating collectors, and bringing enforcement actions against collectors that violate the FDCPA or the FTC act.

Kane said the FTC has held discussions for the past year or so with the ACA to find ways the organization could address consumer complaints. The ACA announced last week during the organization’s annual convention in Chicago an enhanced code of ethics for its members. Two of the key provisions include requirements that ACA members “make efforts to resolve consumer complaints … [and] designate a contact person …to resolve consumer complaints.”

Kane said the FTC applauds the ACA’s enhanced ethics code but cautions that “to be effective it must have real teeth.”

Last week, Rozanne Andersen, the ACA’s general counsel and senior vice president of legal and government affairs, brought up the self-regulatory concept during a convention seminar updating members on some of the top regulatory issues facing the organization.

Andersen told insideARM.com today that shifting to the self-regulatory format would give the ACA the ability to create a consistent means by which consumer complaints and potential law violations are resolved.

“We would like the opportunity to help consumers resolve complaints and law violations,” said Andersen. “The passage of the enhanced ethics code by the board has set the stage for broad-based self regulation of the industry.”

Andersen stressed that the SRO framework doesn’t change the FTC’s role overseeing the industry. “The FTC is the chief enforcement body and law enforcement authority for this industry,” said Andersen. In addition, becoming an SRO would not supersede state regulations, she noted.

Andersen says there are several levels to the self-regulatory format. One level includes internal ethics procedures, while the next step would entail hiring a third party to enforce those procedures. Andersen said the ACA is considering hiring the Better Business Bureau as that third party.

The ACA is looking at the National Automobile Dealers Association and the Association of National Advertisers as possible models in creating its SRO framework, Andersen said. For example, the auto group implemented the so-called “Lemon Laws” that give consumers certain rights in returning a recently purchased car with problems.

The Minneapolis-based ACA is a collection industry trade organization with 5,500 members worldwide.