A Powerful Group Aligns Against the ARM Industry
Last week, we ran a press release under the headline “NY Statewide Coalition Urges Legislature to Curb ARM Industry Abuses.” The headline was nothing terribly out of the ordinary; the ARM industry is used to facing opposition from coalitions of concerned citizens and the like.
And to be honest, the content of the release was not startling. It was an announcement in support of new laws in New York that would make it harder for debt buyers to file suit against consumers. While the legislation is misguided, it should be expected that various consumer groups would support such a measure. The release mentioned a group called the New Yorkers for Responsible Lending coalition.
What is surprising, however, is the identity of the actual organization that distributed the release. The above-named coalition did not send it out. It was released by the New York chapter of the American Association of Retired Persons (AARP). This fact should be cause for concern to ARM professionals engaged in policy lobbying.
As far as special interest groups go, few have the clout and power of the AARP. The group claims over 40 million members, and while they all have disparate voting affiliations, the pressure the group can bring to bear on lawmakers is enormous.
In my recollection, there has not been a more powerful membership group to align itself directly against the ARM industry.
The National Treasury Employees Unions, itself quite influential, successfully lobbied the IRS to drop private debt collection vendors from its recovery strategy. But the NTEU is nothing compared to the AARP.
The press release distributed by the group used anecdotal evidence culled from the experiences of two retirement-age New Yorkers to paint a terrible picture of the entire industry. So the group appears to be putting all of its PR might behind the effort.
Ultimately, this impacts regulations in just one state, albeit a rather large one. But it should be noted that an extremely formidable group has aligned directly against ARM interests and that further pressure of its kind may be forthcoming.
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Comment from fingers on June 22, 2010 at 11:27AM EST
run for the hills...old people are coming.
Comment from Anonymous on June 22, 2010 at 11:47AM EST
I am going to pray that it is just because seniors are always victims of scams. They are trying to educate themselves and warn others to make sure they are dealing with a REAL collection agency. I would hope that they will focus on education and encouraging seniors to be careful and be responsible while paying their bills. Not destroying the ARM industry.
Comment from Anonymous on June 22, 2010 at 12:08PM EST
There are twice as many baby boomers as the next generation. Maybe they shouldn't try to quash a growing industry that is part of the hand that will feed them in their old age...
Comment from MJ on June 22, 2010 at 1:05PM EST
Why would the AARP line up against debt collectors? Of all demographic groups, those fitting the profile of an AARP member are probably the least likely to get into collections to begin with. For the most part people on SSI or an otherwise fixed retirement income are not effected by a poor economy unless inflation is out of control, which it isn't. What, then, got the AARP riled up? There must be something more to it...
Comment from Anonymous on June 22, 2010 at 3:24PM EST
I'm not sure this atricle is a good one for the ARM to run. IT assume the AARP has alligned against the ARM industry and does so with little fact other than the AARP's support of new laws in New York that affect purchased debt.
I guess I wonder when the ARM industry is going to seperate our selves from the Debt Purchasers that are truly driving the negative image of our industry.
What should the next arm article be?... Debt Buyers are Barred from claiming participation in the Account Recievable Management Industry.! : )
Comment from Michael Klozotsky, Managing Editor, insideARM.com on June 22, 2010 at 3:38PM EST
Anonymous@3:24PM--
I'm not sure what you mean by "good article." It is an opinion piece--not a news article--written by IA.com's Senior Editor, Patrick Lunsford.
I would suggest, however, that it is note/newsworthy in that a press release supposedly issued by one group was in fact produced by another. Why all the need for subterfuge?
The debt purchasing market is a legitimate segment of the ARM industry (and a supply-side link between credit grantors and contingency collection agencies that work a percentage of that purchased paper).
In my opinion that which affects a part cannot but affect the whole.
Comment from Illinois on June 22, 2010 at 5:25PM EST
Just demanding that prior to the first letter or phone call, the collector- without blushing- could provide a judge sufficient documentation that a debt is valid and that the amount requested is correct would eliminate about a zillion percent of consumer complaints.
Why should seniors line up against debt collectors? These are folks that have paid their way through life, and typically desire no drama in their life. Thus they are most likely victims of debt buyers and the debt buyers collectors. That is, they are less likely to demand documentation that a debt really exists, rather than challenging it. They are more scared of going to court, thus are more likely to pay for the hassle to go away.
Thank you AARP.
Comment from eddie enforcer on June 22, 2010 at 5:32PM EST
Well both my parent's are in the AARP and it took me sending a "love letter" before two different CA's would stop calling thier house looking for me. I had not lived their for 15 years. My parent's told them everytime I did not live there and to please stop calling. The problem is they, like most older people, was they were to nice. I heard it for myself when they called the day after Christmas. Not saying that is the reason but I can assure you my parent's hate CA's and they have perfect credit.
Comment from Albert on June 22, 2010 at 6:45PM EST
Does the proposed law increase the cost for filing based on the number of suits filed? If so, I support this portion as entities that file a large number of lawsuits using courts paid for by the public should have to absorb the associated cost. Otherwise, our industry becomes no better than an entitlement class seeking the government to their work for them without paying the associated costs.
As for the AARP backing this movement in NY, maybe internal policies wherein we as an industry forgo small claims court filings against those over the age of 65 would be an appropiate counter to their support against ARM. Adopting such a policy recommendation and informing the AARP of such adoption may be all it takes to get our wise seniors to stand down.
Comment from Texas on June 23, 2010 at 9:54AM EST
As the economy continues to worsen, more older workers are being displaced. It is very difficult for anyone over 50 years old to find a good paying job these days, and most entry level positions do not want someone that old. 50 is the age to be eligible for AARP, and those of us who are hassled by significant income reductions by a loss of a job and debt collectors are getting more assertive/aggressive in their tactics. I am not afraid to take them to court when they will not supply documentation and just ignore my dispute. I am not the only one. I know the laws and am not afraid to use them.
Comment from Michael Klozotsky, Managing Editor, insideARM.com on June 23, 2010 at 3:16PM EST
Please Note:
insideARM.com will not approve comments that "call out" a list of other posters, groups of people and/or companies, or individuals by name.
The free flow of ideas and meaningful discourse are not advanced by these types of rants.
Thanks, MrK
Comment from Rick Ashley on June 28, 2010 at 3:04PM EST
Come on, these AARP members were quite intelligent and were more than happy to take the loans and credit card. As well, they took loans on their homes, in order to live beyond their means. Now when the note is due, they complain the the bad ol collectors are harrassing them. These folks need to grow up and be accountable for their actions. Go cry on someone elses shoulder, as I've had enough of their whinning. Maybe I send them some cheese to go with their wine.
Comment from anoninlouisville on July 7, 2010 at 12:23PM EST
Many of the debt collection abuses from marginal, unethical firms have deliberately targeted the elderly, the vulnerable and the disabled. The AARP is simply backing legislation that puts more skin in the game of third party debt collectors whose employees are willing to falsely claim an agreement or a debt when they either did not have one or should have known they had a "same name error", or some other mishap. Many of these people don't care who pays--as long as somebody pays.