Five New Year’s Resolutions for the Conscious Collector

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Jerry Ashton

Whoa, the conscious collector you say? And resolutions – those annual proclamations that people don’t keep? Does this sound like a bad pairing? Perhaps, even insulting?

Considering our industry’s track record, maybe, maybe not. After all, the industry is coming off a banner year for collections, made possible by hard work and dedication.

However… If there is one thing that today’s collector is conscious of, it is that our industry and the work it performs ranks in status somewhere below that of a used car salesman and slightly above that of a U.S. Congressman – and that is really bad.

As Shakespeare declared, “The fault…is not in our stars, but in ourselves.” Still, it is instructive to look at the external so as to get our bearings. How in the world did we end up here?

Examples of how we have earned our place in the sun. 2011 has been a Record Year for Collection Lawsuits. Lawsuits citing FDCPA violations reached 11,359 from 1/1/11 through 12/15/11 – exceeding last year’s 10,914. Some examples of our discretions:

*The President of an Erie, PA collection agency is accused of using a fake courtroom to intimidate debtors — and invokes the Fifth Amendment.

*A San Diego based debt buyer and its subsidiaries employ collection approaches which investigators claim had “very little information about the debt…provided no supporting documentation…and included no proof that they actually acquired the debt from the original creditor…and also sometimes targeted the wrong individuals for collection and attempted to collect debts that had been fully or partially paid.” Reportedly, the company had ““set aside an additional $500,000 in anticipation of a settlement.”

*A federal court ordered an individual behind a payday lending scheme and two companies he controls to pay $294,536 for illegally trying to garnish borrowers’ wages, and other illegal collection practices.

*There are 30 states that will (sort of) allow imprisonment for unpaid debt – even though this has been illegal in the U.S. since 1833 – and underhanded agencies are taking advantage of loopholes to see the debtor land in the slammer. Even in the case of incomplete or false documentation.

And, a news piece hot off the press on January 1, 2012, “America’s Abusive Debt Collectors” by journalist Gary Rivlin, best-selling author of Broke, USA. To read it is to weep.

So, that’s the “reality” of our work and a view of our world as others see it. Where then, exactly, does “consciousness” or “resolution” come in for a bill collector? It is one thing for any of us to be conscious of our circumstances, but an entirely a different thing to have the resolve (resolution?) to change things. And, why bother?

First, to be conscious is to be awake. This implies awareness and the capacity to make responsible decisions. That’s the operative word – responsible. The Industry is not responsibile for the way things are; however, it is within our responsibility as workers within the industry to not make the way things are worse.

You want positive change? If it is to be, it is up to We. We are responsible.

Now, about those resolutions that can turn things around.

Resolution #1 – I will not work for an agency or debt buyer which employs or encourages duplicity in its collection efforts, i.e., phony courtrooms.

Resolution #2 – I will only work accounts which have supporting documentation. If my agency, or its client, cannot provide that proof – that account is returned with a “write it off” recommendation.

Resolution #3 – I will refuse to attempt collections on OOS (out of statute) accounts.

Resolution #4 – I will refuse to collect on personal loans (the infamous “payday” loan as example) which include “bumps” or fees and collection charges in tandem with egregious interest rates. Basically, an exercise of the Golden Rule.

In summation, what we would have here is a “conscious” collector who is aware of the applicable laws, knows the originator (and legitimacy) of a debt, and acts ethically.

Oh yes, and Resolution #5? That one belongs to the employers – the agency and/or debt buyer: “I will hire only collectors who have made – and live by – the above four resolutions.”

Hard working, ethical and conscientious bill collectors. Now, that should grab the headlines in 2012.

Continuing the Discussion

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  • avatar Jordan says:

    I hate to be the only one to reply, but wouldn’t it be nice if our customers made similar resolutions? I personally don’t agree with a few of these resolutions.

    For example Resolution #3. I’ve spoken with a lot of customers on out of statue accounts who still have the original credit card in their wallets or don’t have any issues with recognizing the debt and making suitable arrangements. What about the debt that is out of statue but has never entered the collection cycle before, believe me, it does exist!

    I agree with limits, obviously attempting to collect a debt from the 60s, 70s, 80s and so fourth is unrealistic, but to resolve not to collect out of statue is also unrealistic.

    After all, why would anyone ever want to pay a debt if they knew it just went to collections, if they weren’t sued eventually it would go out of statue, fall off their credit report and they could walk off without repaying a dime?

    And on #4, I am doubtful that the customers who take out pay day loans were not aware of the terms of the pay day loan before the loan was issued, nor with any lines of credit, did the creditor put a gun to their head and tell them to sign the dotted line.

    Many times customers may have two or three pay day loans outstanding with different companies. You could use the typical “pay day loan trap” as an excuse, but in reality isn’t it the customer abusing the system trap. I mean, state laws already limit pay day loans and the fees and interest they can charge.

    $15 for every $100 borrowed is the average and I don’t think that is too bad of a deal for a short term unsecured loan to someone who wasn’t able to obtain traditional credit. I don’t see how collecting on a pay day loan is unethical or damaging to the overall industry.

    Again, I agree with the overall idea of your article, but I don’t think resolutions are going to change the overall view or remove the big target on our backs. No one likes dealing with a debt collector. I know debt collectors who don’t like dealing with debt collectors. ;)

    Personally I just believe the times have changed. When I entered into this business it was easier to collect a debt. Customers would stay on the phone, tell you why they could or couldn’t pay, now if they aren’t making a threat against you they are hanging up or not bothering to explain their inability to pay. A more “no care” attitude is present — and I’m a “catch more flies with honey” collector…

  • avatar Jordan says:

    P.S. I kind of got a little off topic there. My entire point is, isn’t the news 90% negative and 10% positive?

  • avatar Jerry Ashton says:

    Actually, I would be unhappy if you were the LAST collector to post, Jordan. Thanks for sticking your head above the foxhole to speak for many of your compatriots.

    I won’t go into detail about each of your points, but I will address payday lending. 10 million households paid $2.4 billion in fees for payday loans last year, and the average annualized interest came in at 470%. Remember the days when usury laws prevented such predatory excesses? No, I don’t either.

    Collectors without conscience – but who need that job so that THEY won’t end up out on the streeet – doggedly act as “enforcers” for creditors who take advantage of our lax laws and our lax oversight to swindle needy and gullible people.

    Follow the money…and it always goes back to banks and Wall Street and the greed that cannot be slaked. Fortunately, the U.S. is acting on Payday Loans:

    http://articles.latimes.com/2002/jan/04/business/fi-payday4

    Don’t get me started on Student Loans from for-profit colleges…that’s a whole different blog.

    Jerry

  • avatar Steve Marcus says:

    Happy New Year Jerry and all readers. I commend you for the insights in what you say, for basics that we assume is a part of everyday business practice and a part of the collections process but, isn’t. “A “conscious” collector who is aware of the applicable laws, knows the originator (and legitimacy) of a debt, and acts ethically”. It doesn’t get more basic!!

    I’d like to add “open-mindedness” and being receptive to exploring alternatives and affiliations to better address the needs of today’s financially challenged debtors. This more comprehensive approach would prove to be not only more effective and successful in generating better bottom line revenues but, would generate good will and positive press as well.

    I would appreciate the opportunity to discuss this with all interested parties. I sincerely think that we can accomplish more working together, that together we can make more of a difference and that this positive change will be seen as a more constructive and friendlier approach to receivables management by all. Let’s talk.

    “Hard working, ethical and conscientious bill collectors”. Now, that should grab the headlines in 2012. AMEN

    Steve Marcus pres@anewhorizon.org

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