Inconclusive Close for FTC Workshop

They could never get on the same page.

A final panel at the Federal Trade Commission’s workshop on collections this week was designed to put a cap on the event with representatives from interest groups coming to some agreement over major topics facing the industry.

But initial consensus gave way to gulfs of disagreement as the panelists began drilling down to the details. Still, the last discussion showed a marked tone of collegiality compared with previous panel debates where consumer advocates threw stories of consumer abuse at collection agency owners at a loss to defend the industry against anecdotal complaints.

Gary E. Wood, president of Collins Financial Services and president of trade group DBA International, applauded the FTC for convening the conference and summed up the positive aspects of the event.

“We agree that we need better compliance (with the rules), better communication and that the FTC enforce the law,” said Wood. “We may have slipped off on some individual cases but we fight like the devil to keep members from misbehaving.”

Peggy L. Twohig, associate director of financial practices at the FTC, charged the final panel made up of representatives from the collection industry, consumer advocates, creditors, state regulators and attorneys with listing the three top topics they would like to see coming out of the workshop.

Rozanne M. Andersen, legal counsel for trade group ACA International, introduced the idea of giving the FDCPA federal preemption, assuring the packed room of attendees that this would not preclude state oversight of collection agencies.

This drew agreement until Colorado state regulator Laura Udis who argued that her state’s rules on the industry often times bettered that of the FDCPA and contended that individual states could act quicker in investigating and enforcing rules.

A suggestion that the rules on communications with debtors be modernized to allow for contact through mobile phone and email drew nods of agreement. The collection industry also asked for clarification on time of contact rules, as a consumer living on the West Coast may have a cell phone number with an East Coast area code. Cell phones and email had yet to be invented 30 years ago when the FDCPA was implemented.

These ideas received push-back from some consumer advocates who contend that allowing for contact by cell phone and email will lead to 24-hour harassment of consumers.

Panelists did agree when Wood suggested greater research on the industry so anecdotal evidence could be replaced with hard numbers. The FTC called the workshop in response to the nearly 70,000 consumer complaints it received on collectors in 2006, the most of any industry. And there was some agreement over the need for improvements in verifying information on the debt and the debtor when collectors seek to take a consumer to court for a debt. Twohig acknowledged that details on consumer information still had to be worked out.

Going forward, the FTC will analyze the information presented at the conference to absorb what was heard, said Twohig. The agency has several options, including proposing that Congress change the law; it can ask for more discussion, whether formal or informal, from interested parties; or it could explore other legal options.

The agency also may participate in Wood’s call for more research though it would have to review the resources it could devote to such a project, said Twohig.

“We will review (the conference discussion), to determine the critical issues and devise a plan,” said Twohig. “There were a lot of disparate views and a lot of contradiction.”