Two news items were released yesterday by the Federal Trade Commission (FTC) Office that should be reviewed by the ARM industry.

First, Chris Koegel, Assistant Director, Division of Financial Practices, at the FTC published a blog, A Year in Debt Collection. The blog is essentially a “year in review” for 2015 activities at the FTC. Koegel noted: “During 2015, the FTC made a plan to address some new and troubling issues in debt collection. Throughout the course of the year, we stuck to that plan – bringing a record number of new cases, banning bad debt collectors, talking with industry, and finding new ways to do outreach.”

During 2015, the FTC coordinated the first federal-state-local enforcement initiative (Operation Collection Protection) against debt collectors – including actions by more than 70 different partners – they also filed 12 new cases against 52 different defendants. The FTC also resolved 9 cases, obtaining nearly $94 million in judgments.

The FTC also added to their list of banned debt collectors in 2015 – and published the list.

Finally, Koegel wrote: “One of the really important things we did this year was talk with the debt collection industry. The Debt Collection Dialogues kicked off in Buffalo, and then continued in Dallas and Atlanta. At all three, to sold-out houses, we brought together the debt collection industry with the state and federal agencies that regulate them – allowing all perspectives to be heard.”

The FTC announced that it has sent a summary of its 2015 work on debt collection practices to the Consumer Financial Protection Bureau (CFPB) for inclusion in the CFPB’s annual report to Congress on the Fair Debt Collection Practices Act (FDCPA) as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. A copy of the summary can be found here. The FTC and the CFPB share enforcement responsibilities under the FDCPA.

In addition to discussion of the items mentioned in Koegel’s blog some of the other 2015 FTC activity in the summary included:

  • Prosecution of a sweep of cases against collectors that used unlawful text messages to collect debts;
  • Banning 30 companies and individuals that engaged in serious and repeated violations of law from ever working in debt collection again; and,
  • Filing three amicus briefs, two of them jointly with the CFPB, on key debt collection issues.

insideARM Perspective

The Koegel blog was a thoughtful and thorough review of FTC activity in 2015. insideARM applauds the FTC efforts to rid the industry of “bad actors.”  Though, it could be argued that, for the most part, the “bad actors” were not truly members of the ARM industry or community. Rather, these “bad actors” are individuals that use debt collection as a “cover” or “disguise” for fraudulent and criminal activity. insideARM also supports the publication of the list of banned individuals and companies. We hope these individuals don’t reappear with a new company name in the future.

insideARM also wishes to thank the FTC for holding the Debt Dialogues in 2015. There is a significant lack of trust by consumers in the debt collection environment right now. The Debt Dialogues could lead to ideas to restore that lost trust. The debt collection industry serves an important role in the financial services ecosystem.  We need to work together to make the system work better.

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