FTC Updates ARM Industry on Agency’s Workshop at DBA Conference

Thomas Kane, the Federal Trade Commission’s senior attorney, Division of Financial Practices, updated attendees at the 2008 DBA International Conference in Las Vegas on the workshop held last October by the agency.

In his speech, “FTC Update: What the FTC Learned at the Workshop,” Kane recapped some of the major discussions at the agency’s conference on the collections industry last October.

Kane noted that the FTC continues to work on its findings from the conference, “Collecting Consumer Debts: The Challenges of Change.” A release date hasn’t been scheduled. The agency typically provides its annual report to the Speaker of the U.S. House of Representatives in the springtime.  

The workshop provided the FTC with insight on a number of topics, said Kane. He highlighted the increase in the amount of debt that consumers carry, and the new technologies available to debt collectors since the FDCPA was implemented 30 years ago.

"Debt buyers are a huge part of the debt collection process and we have no problem when you do your job. We just want you to comply with the FDCPA standards," Kane said.

However, the FDCPA was written before the modern debt buying industry developed, Kane said, making the need for the workshop evident to the FTC.

"Thirty years ago debt buying didn't exist, 15 years ago it barely existed, and now it's huge," Kane said.

Kane noted that one complaint against debt buyers voiced at the workshop was the failure of debt buyers to verify the existence of delinquent debt. This is problematic in legal proceedings, Kane said, when "attorneys often have no documents when they file suit, and then they just get a continuance or drop the case when consumers show up in court to dispute the case."

Kane also described challenges from the perspective of debt buyers, including increased difficulty of collecting debt from consumers challenged to make their monthly payments. Collectors have also had greater difficulty contacting debtors, given the use of cell phones.

Kane reminded listeners of a notice of proposed change in federal rules regarding the accuracy of consumer report information. The change would give consumers greater authority to directly dispute inaccuracies in their credit report with financial institutions and other entities that furnish information to consumer reporting agencies.

The FTC and the five major federal banking regulators posted the proposed change, sometimes known as the Furnisher Rule, in the Federal Record on Dec. 13, 2007. A comment period expires next Monday, Feb. 11.

The proposal would implement Section 312 of the Fair and Accurate Credit Transaction Act of 2003 (FACT Act), amending the Fair Credit Reporting Act.

The change would put the burden on an agency to prove it can “assure the accuracy and integrity of information furnished” to the credit reporting agencies.