insideARM.com Editorial Blog

Analyzing the GAO Recommendations for FDCPA Reform

2009-10-26T07:20:44-07:00

It’s been only a few days since the Government Accountability Office (GAO) released its report on credit card debt collection practices, complete with specific recommendations to Congress on modifications to the Fair Debt Collection Practices Act (FDCPA), (“Government Report Recommends Significant Changes to FDCPA,” Oct. 22).

But the accounts receivable management industry has certainly taken note.

First, if you haven’t had a chance to read the report in its entirety, take some time to do so: http://www.gao.gov/new.items/d09748.pdf. Yes, it’s a long government report, but it’s a fascinating look at how this country’s rulemaking apparatus rationalizes the regulatory environment it creates. There’s some really interesting stuff in there.

Second, understand that the report is directed to members of Congress. The recommendations that are laid out in the document will have to go through the formal lawmaking process.

And that’s the point of one of the recommendations. The GAO said that the Federal Trade Commission (FTC), the debt collection industry’s current regulator, should have the authority to make changes to the law when it sees fit. This would mean that the agency could take input from the industry and consumers and alter the law without having to go through Congress. It would also mean that collection agencies would not need to rely on very rare FTC opinions and case law to interpret some of the gray areas of the FDCPA.

For that and other reasons, ACA International sees the report as a major positive. Adam Peterman, ACA’s government affairs director, told me in a message last week that the group is “happy that they’ve pointed out a lot of the issues we’ve been trying to point out.”

Indeed, the recommendation that stands out the most is the one where the GAO charges Congress to update the FDCPA to “reflect technologies that were not prevalent when the act was originally enacted.” The ARM industry has been noting the antiquated nature of the FDCPA, originally passed in 1977, for years. With the backing of a group like the GAO, the FDCPA may soon clarify issues surrounding the use of cell phones, answering machines, predictive dialers, and even email.

But I’ve also heard some words of caution surrounding the report. The third official recommendation to Congress was that the FDCPA be modified to “help ensure that debt collectors and debt buyers have adequate information about the debts transferred and adequate documentation to verify the debts they seek to collect from consumers.”

A debt buyer that I spoke to last week noted that this language was very scary. Asking specifically not to be identified, he said that Congress could interpret this many different ways. And in the current legislative and regulatory environment – with consumer protection being the operative theme in Washington – he said there is no reason to be optimistic about lawmakers’ interpretation of that recommendation.

When forced to put a silver lining on things, our anonymous debt purchaser said that Congress could put the onus on creditors on the documentation/media side of things.

One thing is clear from the report, however: meaningful reform is coming for the FDCPA.

The FTC in early December wraps up its series of three panel discussions on legal collections in Washington, after issuing an FDCPA report earlier this year. Expect recommendations from the regulator to come quickly in light of the GAO report.

Of course, the whole matter then goes before Congress, where the real battle begins. The industry should definitely view all of these reports and recommendations as a beginning rather than an end.

AP Details Growth of State ARM Regulation and Consumer Woes

2009-10-15T07:05:50-07:00

Get ready to see an article on the debt collection industry in your local newspaper today.

The Associated Press sent an article out over its wires Thursday afternoon that was innocuously titled, "States raise limits on creditors as debtors squirm." But the main focus of the article is the growing trend of individual states passing laws targeting the accounts receivable management industry that supersede the Fair Debt Collection Practices Act (FDCPA).

The AP article notes that several states or local government entities have already proposed or passed laws stricter than the FDCPA, with most focusing on debt purchasing. More states are expected to follow suit.

The list of states – North Carolina, Idaho, Colorado, New York, Arkansas, Maryland, New Jersey and Massachusetts, along with New York City – is not new to the ARM industry. Many of the changes have been detailed in debt collection media, including insideARM: “ARM Industry Discusses Collection Law Changes in North Carolina,” Sept. 2; “NYC Collection Law Could Signal Problems for the ARM Industry,” April 17; “NJ Bill Would Require Collectors to Send Copies of FDCPA to Debtors,” April 20; “Massachusetts Toughens Rules for Small Claims Collection Lawsuits,” Aug. 12. We’ve even covered some that the AP missed: “Oregon Passes Bill Allowing State AG to Sue Debt Collection Agencies,” April 6.

But that’s hardly the point. What the AP notes, and what professionals in the ARM industry already know, is that the regulatory and legislative tide on nearly every level of government is turning against debt collectors, as if it hadn’t already. And presenting the same basic journalistic formula isn’t helping matters.

In its article, the AP makes heavy use of the “poor consumer” anecdote, giving three paragraphs of space to the story of a North Carolina woman that prompted her states’ tough new measures. The article gives one single sentence to an ACA spokesperson for the ARM industry perspective...near the bottom of the story.

I will say that we were personally pleased with one aspect of the article: the AP cites a survey conducted by Kaulkin Ginsberg, our sister company. In actuality, the survey cited is the insideARM Quarterly Confidence Survey. So thanks, AP. But other than that, we feel that reporting on these new laws should focus on the unintended consequences and additional burdens on jobs that the rules will present.

Interact with Top ARM Vendors Without Leaving Your Desk at EXPO 3.0

2009-10-06T02:11:17-07:00

Something new is coming to the event world for credit and collections! insideARM.com and Kaulkin Ginsberg are pleased to bring you the industry’s first-ever virtual EXPO.

Think of an online exhibit hall where you can literally “visit” booths, interact with suppliers through group or private chat, see a video introduction of the company or product, and download additional information.

While it will always be important to engage in face-to-face networking, adding a virtual EXPO to your schedule can provide an efficient and cost-effective way to interact with potential suppliers or clients. Because of the expense of travel and time out of the office, many stakeholders in the process of selecting vendors don’t ever attend tradeshows; companies have to make choices about whom/how many to send to the major events.

EXPO 3.0 will be free to attendees, so there are no choices to make; senior management, IT staff, collection staff, or anyone else will be able to attend this show from their desk, at their convenience. Have 20 minutes at 10am and then 30 minutes at 3:30pm? Fine! Come and go from this event as needed.

Suppliers won’t have to make those choices either; so not only the sales team, but management, developers, marketers, customer service team members can all have the opportunity to interact directly with clients and prospects. This is extremely valuable input for your whole team.

Expo 3.0, “the receivables tradeshow evolution,” is coming on February 16, 2010. Learn more about the event at www.insidearm.com/expo.

Stephanie Eidelman is the Publisher of insideARM.com and the Chief Operating Officer of Kaulkin Ginsberg Company. She can be reached at publisher@insideARM.com.

ARM Firms Still Dealing With Weak Performance: Survey

2009-07-29T07:13:12-07:00

Collection agencies, debt buyers and collection law firms are still experiencing lower than average performance in the year-and-a-half old recession, according to early responses to insideARM’s quarterly Credit & Debt Collection Industry Confidence Survey, sponsored by LiveVox.

The current survey, for Summer 2009, is still open. If you haven’t participated yet, please take a couple of minutes and fill it out here. Once again, thank you to all that have taken it; the response has been just as robust as our previous surveys.

In our last survey, which covered performance in the first quarter of 2009, ARM firms indicated that performance had improved from late 2008 as early tax refunds gave consumers a much-needed cash infusion. But the current survey appears to indicate that performance slipped in the second quarter and is continuing to struggle through the summer.

On a scale of 1 to 5, with 5 representing “Very Strong” performance, ARM firms have rated current collection or liquidation performance an average of 3.23 in the still-open summer survey. This was stronger than the 3.18 average rating given to the second quarter’s performance, but down from the first quarter’s 3.53 average.

By contrast, the average rating for performance in the fourth quarter of 2008 was 2.81. The deep drop in performance late last year, and the slight recovery so far in 2009, was summed up rather well by one comment from a survey participant:

“In October 2008, the recoveries fell off a cliff. We are rebounding from a difficult period. Inflation and unemployment will continue to hold us down and hamper recovery.”

Other participants also had comments on performance trends:

“Liquidation rates are still half to less than half of 2006 to 2007 numbers, but appear to have stabilized.”

“Collections are way down - in single digits.”

“I strongly feel that the good news is we have bottomed out. The bad news is we will ride the bottom for a couple of years.”

“The economy definitely has had a negative affect on collection success and we are finding we must be more empathetic to keep payments flowing.”

We are collecting slightly different demographic information on survey participants this time around as well, mostly focused on geography. More than 80 percent of survey-takers so far are from the United States, with the vast majority of non-U.S. participants in Europe. So far, California is the most popular state, with around 13 percent of participants working in the Golden State.

There is still time to participate in the survey. Please take a couple of minutes and check it out if you haven’t already.

How Strong is Your Google-Fu?

2009-07-21T07:53:06-07:00

In today’s online world, it’s hard not to roll one’s eyes at the myriad of silly catchphrases. Once in a while, you stumble across a good one. “Google-fu” is an amusing term that relates an Internet user’s degree of skill with Google’s powerful search engine. Considering how difficult it can be for an accounts receivable management professional to find relevant information, you’d need some pretty strong Google-fu to get anywhere with a regular search for ARM terms.

However, short of dedicating yourself to studying the intricacies of Google’s search engine, there is an easier way to find ARM information for the industry professional: SearchReceivables.com vertical search.

What is Vertical Search?
A “vertical” or industry search engine is a relatively new tier in the Internet search industry. It only looks through relevant websites to deliver search results, as opposed to Google, which searches every website on the Internet.

Realizing that ARM professionals didn’t have such a tool in their arsenal, we created SearchReceivables.com. If you’ve used the search tool on insideARM.com recently, you might have noticed that your search results are delivered through SearchReceivables.com.

Why doesn’t Google work for ARM professionals?
Research shows that on average, professionals may use the internet for industry research for over six hours a week. Due to a lack of vertical search engines for niche industries (such as ARM), professionals are currently forced to use consumer-focused search engines like Google.
What problems do ARM professionals come across in a consumer search engine?

Search results that are not directly relevant to your query.
Too many overall results returned on each search.
You’re forced to try different engines because of the unfocused nature of consumer engines.
Studies demonstrate that users only get a relevant result 40% of the time.

Ever try searching for receivables terms on Google? Take a look at this Google search:

Notice that most of these results are simply not useful for a receivables industry professional. If you’re looking for sources of industry information, you probably don’t want to comb through hundreds of consumer-focused search results. You also have no way to quickly drill down or filter by common ARM-related terms to find exactly what you need, nor can you quickly access resources like insideARM.com.

Here’s what you get with a SearchReceivables.com query:

Essentially every link on the page is a tool selected specifically for its usefulness to the receivables industry professional. Instead of just giving you a list of results, you’ve now got access to a variety of search tools that can help you quickly get to the content you are looking for – without filtering through pages of consumer-focused items.

If you’re an ARM professional or doing any ARM research, SearchReceivables.com needs to be an everyday part of your workflow. If not, I hope your Google-fu is strong – you’re going to need it.

Naveen is an expert on web development and the Internet. For insideARM.com, he is focused on improving usability, content, and the online community for insideARM.com readers and members.

Are Your Employees Engaged or Enraged?

2009-06-17T06:55:54-07:00

If someone could give you a blueprint for how you could achieve greater profitability, wouldn’t it be worth at least a minimum investment in time?

Many studies have demonstrated that happy, engaged employees are the most valuable and profitable to any organization. Further, unhappy, unengaged employees can be unproductive, even destructive in some cases, and ultimately lead to costly turnover. I recently wrote an article on this with multiple examples of such studies ("The Business Case for Engaged Employees," June 15).

You may know that insideARM.com has launched its second annual Best Places to Work in Collections program. Amidst a barrage of negative publicity for the industry, we’d like to highlight those companies that are great corporate citizens, providing terrific places of employment. We know there are U.S. collection agencies, law firms, debt buyers, and creditor recovery operations of all sizes out there that care about their employees, provide top notch training, and have well-respected leaders. We want to find and recognize you!

The benefits to being named a “Best Place to Work” may be obvious: boost morale, attract top candidates (crucial in any job market), and demonstrate to clients and prospects that you have an engaged workforce, which is a competitive advantage not easily matched.

But I’d like to highlight how great the benefits are to participating in this (free) program, even if you don’t come out at the top of the list this time. It’s critical to know what your employees are thinking. Many will not tell you directly, for fear of consequences. Many may appear happy, but behind that front, are preparing to leave as soon as the economy turns around or they find a new job where they perceive the grass is greener. The only way to learn this is to obtain candid feedback – which you can only gather effectively through a 3rd party.

The insideARM.com Best Places to Work in Collections program is conducted by the Best Companies Group, a firm that conducts similar programs nationwide and has zero connection to the ARM industry. We at insideARM.com and Kaulkin Ginsberg do not receive the feedback or comments of any individual or any individual company. Participating companies also receive only aggregated feedback, in order to not jeopardize the confidentiality of any individual employee.

Kaulkin Ginsberg has participated twice in a local Best Places to Work in Greater Washington DC program. I will admit to you that we have not yet won, however the information we received has been invaluable to our management team. We have made many changes as a result of the responses, and our scores improved across the board from last year to this year. By the way, relative to the value of the information received, participation was incredibly easy and streamlined.

Conducting such a survey on your own could easily cost $5,000-$10,000. Participation in this study is free, and you will receive an overview of the results for free. In most cases, if you decide to purchase of the full results report, it costs less than $1,000, and you don’t have to decide to purchase until later.

It is well-documented that turnover of just one $50k salaried employee costs $75,000 – or 150 percent of base salary. Wouldn’t any of us spend less than $1,000 in order to save well over $75,000? Indeed, wouldn’t it be worth at least a minimum investment in time and money?

I welcome your comments, questions or concerns about this program. Email me at publisher@insidearm.com

A Case of Mistaken Identity

2009-06-04T02:21:33-07:00

A few weeks ago, I got home and discovered a strange message in my voicemail. It said simply, “This is Mr. X from Company ABC. Please call me at (number).” And that’s it.

I’ve spent nearly seven years covering the accounts receivable management industry, so I instantly recognized the company’s name as a major collection agency. I suppose what went through my mind next is a common experience for most consumers.

“Why are they calling me?” “Did I forget to pay that bill?” “Is this over some very old debt?” “Is this work-related? But why would they be calling me at home?”

Once I worked through all the possible scenarios, I determined that I had no outstanding debt that I was behind in paying. So I did what few consumers do, apparently: I called back.

I spoke to someone other than Mr. X, a very nice lady that asked for someone I had never heard of. I told her the same, and told her the exact date we received our current phone number (it had been about 2 ½ years). She politely thanked me and the conversation ended. She never even asked for my name. And I’ve had no more calls from them since.

Only four days later, I received a call at work from a consumer that was being “harassed” by a debt collector. He explained that they were calling over and over looking for someone that he didn’t know. He kept telling them they were barking up the wrong tree, but they kept calling. Interestingly, he didn’t really want me to do anything about it – as if I could, anyway – but he did wonder why the ARM industry didn’t have better procedures for clearing out old numbers and other incorrect contact information.

It’s a good question. Our experiences were vastly different. Maybe because I immediately called back and provided information to satisfy the skip inquiry, they let me go unharmed. I was also current on all of my debt obligations, so the truth was on my side, making that initial callback a little easier.

Maybe the consumer that called me wasn’t telling the whole story. Maybe he was trying to dodge collection calls. Or the person the collection agency was seeking had at one time been a part of his household. I just don’t know. I do know that consumers will say anything to get a collector off the phone. If they can stall, they think the debt will just go away.

I’d love to hear from people in the industry about their experiences with skip tracing and finding the right contact. And is there a standardized way collection agencies can scrub bad information?

If its Good Enough for the British�

2009-05-22T07:33:59-07:00

This week, Her Majesty’s Revenue and Customs (HMRC) – the British equivalent of the IRS – announced that it would begin a six-month trial program that will see it outsource select tax debt to private ARM firms for collection.

What??? Don’t they know that doesn’t work? Perhaps they should have consulted with their counterparts across the Pond before embarking on such a crazy scheme.

Speaking of the IRS, Commissioner Shulman offered a feeble defense for the U.S. tax agency’s decision to cut its ties with private collectors. Speaking before the House Appropriations Subcommittee on Financial Services Tuesday (he was there to implore Congress to increase the IRS budget for 2010), Shulman said that the program was shuttered in the interest of a “unified collection program.”

He insisted that the decision to kill the program wasn’t political.

Shulman explained that IRS employees had a lot more power than the private collection agencies they hired. So the IRS decided to get rid of the collection agencies. He also noted that the private debt-collection initiative was created when IRS had a backlog of $7.3 billion in collections, which has since shrunk to about $3.6 billion (a sidenote: I love that the IRS commissioner thinks that a backlog of “only” $3.6 billion is a solid reason for abandoning a program specifically designed to whittle away at the backlog).

It’s bizarre that at a time when more governments in the U.S. – and the world – are turning to private collectors to help with revenue issues, the IRS has suddenly fallen in love with the concept of keeping it all in-house.

But before we call the British program a success, it should be noted that their initiative certainly has its detractors. The London Times reported this week that consumer groups in the UK have already voiced their displeasure. “Debt collection is still an industry that, with some notable exceptions, in many ways seems to thrive and function by creating a climate of fear,” said Chris Tapp of debt charity CreditAction.

It will be interesting to see how the pilot goes and if success could lead to the IRS rethinking their stance on private collectors.

First Quarter Collection Performance Solid, According to Survey

2009-04-23T07:35:14-07:00

In preliminary results from insideARM’s Credit & Debt Collection Industry Confidence Survey for the first quarter of 2009, respondents have indicated that performance was up in the first quarter, but has dropped off since.

With nearly 350 participants so far, the first quarter’s survey results are beginning to take shape. There is data evidence to suggest that collectors benefited from tax refund season, but that before that period began -- and since it has ended -- times were tough.

More than 45 percent of respondents so far said that collection performance was strong or very strong in the first quarter. But the number drops to 39.5 percent when judging current performance (the survey launched on April 7).

Interestingly, 29.1 percent of respondents reported strong or very strong current performance in the fourth quarter survey, which was conducted in January. This would seem to indicate that performance picked up in February and March, prime months for tax refunds. Performance has dropped off in April.

The survey is still open and we encourage all who have not taken the few minutes to complete the survey to please do so. We will be closing the survey next week.

Debt Collection Industry About to Get the Dateline Treatment

2009-03-25T07:54:08-07:00

If you’ve been in the accounts receivable management industry for any length of time, you know about the treatment it receives in the general interest media. In fact, I’ll bet you think it can’t possibly get any worse.

Well, just wait until Friday night.

Dateline NBC’s Chris Hansen, best known for catching dudes on camera that thought they were about to have naughty time with 14-year olds, is setting the searing focus of his Camera of Justice on debt collectors.

The star of “To Catch a Predator” will be highlighting the evils of the debt collection industry in a segment called “Debt in America and Its Collectors.” It’s part of Dateline’s in-depth series, “Inside the Financial Fiasco.” The program, which airs Friday night at 10pm Eastern, promises – in marketing teasers – to “expose dirty tactics used by some collection agencies” using hidden cameras.

To pre-suppose that the show will be an unfair view of the ARM industry is a bit beyond us at this point. I seriously can’t imagine what manner of awfulness will be foisted upon the public in this segment. I guess that we should withhold judgment until the piece airs, but I can't see a piece that touts itself as a hidden camera expose of the ARM industry being even-sided.

But the industry should be aware of it. I’m sure that some debtors, and even clients, will be discussing it next week.

By the way, a big thanks goes out to Universal Fidelity for calling our attention to the segment.

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Layoffs in the ARM Industry

2009-02-13T08:31:27-07:00

It’s bad all over right now, with layoff announcements and government unemployment reports engendering the same kind of macabre anticipation reserved for out-of-market Detroit Lions fans waiting for scores.

And while the mainstream press cast the ARM industry in some sort of “recession-proof” light through most of last year, those in the industry knew the grim reality: a sickly consumer doesn’t pay older debts.

Accounts receivable management decision makers were facing difficult operational environments and making tough choices as early as the second quarter of last year. Do we cut staff to save costs? Do we increase staff to handle rising inventory? Do we stand pat and adjust the way collect, surviving on shrinking margins?

According to the latest Credit & Debt Collection Industry Confidence Survey, many collection agencies, debt buyers and collection law firms chose the former. More than 37 percent of survey participants said they cut jobs in the fourth quarter, and another 27 percent said that cuts were coming in the first quarter of this year.

We’d like to hear from our readers on the topic of jobs cuts in the industry. Did your company trim staff recently?

Press Launches Fresh Round of Collector Scrutiny

2009-02-02T09:02:06-07:00

You may have noticed a lot of articles in the mainstream media recently on debt collection agencies. Nothing new for the accounts receivable management industry, but the focus of the pieces has changed quite a bit over the past year.

Used to be, when a newspaper ran a story about a collection agency, it was to highlight the financial ruination an ARM firm was visiting upon unwitting – and completely innocent, of course – consumers. Over the past couple of months, the trend has shifted to highlighting the financial ruination of the collection agencies themselves as recovered dollars are increasingly hard to come by. Part “News of the Weird”, part supposed karmic grave-dancing, these articles were simply pointing out that things are so bad, even collection agencies are having a rough go of it.

And it’s not like we at insideARM have been completely innocent: our ARM industry confidence survey has shown rapid deterioration in collection performance over the past three quarters, providing plenty fodder for these stories. (Shameless plug: the Q4 2008 Confidence Survey Results will be released later this week)

But over this past weekend, a new kind of story has cropped up: the consumer-focused “know your rights” story. Long a stable of the mainstream press, this new round of stories is a little more ominous, as they offer specific tips on how to chronicle collection correspondence and how to hide assets from collectors.

The genesis of the stories is pretty straightforward. The Associated Press put out a series of articles Friday on how to deal with collectors. The articles came to my attention when the AP reporter called me asking for data on credit card charge-offs. I happily referred her to our research department which supplied the numbers; the article was live online less than two hours later.

The cause for alarm in these articles is the wide circulation they enjoyed over the weekend. In newspapers and Web sites from the San Francisco Chronicle to the Washington Post, the pieces ran. This is actually not a bad thing, as an informed consumer – a fully informed consumer – can be a good person to talk to.

But the specificity of the suggestions leads some of us here to believe that the AP may have gotten wind of a larger story. Remember: the FTC is still sitting on their recommendations for FDCPA reform. The top three suggestions in their bullet-point piece “6 tips for dealing with debt collectors,”: 1) Ask the collector to verify the debt; 2) Try to work out a payment plan with the debt collector; and 3) Ask the debt collector to accept a settlement for less than you actually owe.

I guess we’ll have to see if these pieces are portending action or just a reaction to a difficult consumer environment.

Whats Really Going on with Collection Agencies?

2008-11-17T09:09:44-07:00

The mainstream media – and even the business press – is all over the place right now in covering the accounts receivable management industry.

Just a month ago, it seemed that nearly every “broadsheet” story on debt collection was framed around how agencies are recession-proof and they were the ones raking in big bucks while the rest of America suffered through a full-blown depression.

But most recently, the narrative has changed. As more collection agencies -- and their spokespeople -- tell their stories, is has become clear that the ARM industry is struggling to get consumers to pay. This was punctuated by the major publicly traded ARM firms in their third quarter earnings. While earnings success was varied, all reported strained collections and increased portfolio impairments as expected collectability was adjusted.

This new debt collection reality does not prevent headlines like the one run in the Houston Chronicle over the weekend, though. Under the banner “Business is up for collection agencies,” one would expect another story like the ones from a month ago. But reading the story reveals the problems that we’ve been discussing on insideARM.com. Clearly the headline was written to draw attention.

So how are collection agencies faring right now? We know that placements are up and collection rates are down. But how is business overall?

This question is important to us. This week, we’ll be revealing the full results of our Quarterly ARM Industry Confidence Survey. The results of current conditions revealed a split in opinion between collection agencies and creditors. Banks were much less rosy on their prospects for success.

Collection agencies, meanwhile, admitted they would be modifying their collection strategies in large numbers. But they still felt that the worst was behind us and that things would get better in as little as six months.

Are collection agency operators overly confident that a change in collection strategy will carry them through the recession? Or are they truly more knowledgeable about consumer payment behavior than even their creditor clients?

ARM Industry Hit Last Quarter, But Still Optimistic

2008-10-15T08:43:07-07:00

In preliminary results of insideARM’s Quarterly Confidence Survey for the third quarter of this year, more businesses in the accounts receivable management industry are reporting flagging results, but see solid performance in the quarters ahead.

The survey, designed to take the economic pulse of the ARM industry every quarter, is still open for those that wish to take it. It should take less than 3 minutes and all responses are confidential. We will continue to collect and analyze data, and we anticipate releasing the full survey results next month.

So far, survey participants have expressed a weaker performance environment that in the second quarter’s survey. In the most recent results, 51.4 percent of respondents reported “Average” current performance, with about 30 percent reporting either “Strong” or “Excellent” business performance. Although the picture seems solid, it’s a drop-off from last quarter when more than 45 percent of respondents reported “Strong” or “Excellent” performance.

But looking forward, more survey participants expect better performance in six and 12 months.

Pragmatism is also on display in the survey, as more in the industry are expecting to modify collection strategies to fit the current environment: 48.6 percent so far have said they are “Very Likely” to change collection strategies and 45.9 percent are “Somewhat Likely.” This is a large jump over last quarter’s survey when 38.6 percent said they were “Very Likely” to change strategies and roughly the same answered “Somewhat Likely.”

This sentiment is echoed in the free response section of the survey, with one participant noting, “Economic drivers will force strategic and tactical changes in order to take a more aggressive approach in accepting PPA. We can anticipate smaller average payment size and will need to offset with more volume. Leveraging analytics will be even more critical so that we can zero in on the potential payers.”

Another survey taker also had thoughts on new collection channels: “I expect the collateral recovery and bankruptcy aspect of my business to greatly increase.”

This quarter, we’ve thrown in a timely question about the impact of the coming Presidential election. As always, the ARM shows its pragmatism as the vast majority of respondents feel the election will have no effect, a minor effect, or a neutral impact on the industry.

If you haven’t taken the survey, please join the hundreds in the industry that have and take a couple of minutes to fill it out.

Student Loans, Low Entry Level Salaries Put New Grads on a Shaky Path

2008-09-08T09:52:35-07:00

As an employer, I’ve noticed an interesting dynamic over the past several years. I interview a fair number of candidates right out of college and my impression of late has been “boy, these kids seem to think they deserve incredibly high salaries – in total conflict with their lack of experience!”

I have come to appreciate, however, that graduating students today have a financial situation that many of us …ahem… more experienced people, didn’t have. According to the “How America Pays for College” study conducted by Sallie Mae and Gallup, the average student covers 33% of the cost of their education; two thirds of that through student loans totaling about $15-20,000 (anecdotally, I’ve heard about some with tabs as high as $80,000). With a quick calculation on Sallie Mae’s handy education planner tool, this translates into a post graduation monthly payment of about $250-300.

Now, let’s address those “entry level” salaries. According to Salary.com, an entry level salary is $10,000-30,000; let’s be generous and use $35,000 (by the way, Salary.com puts the national average for an outbound call center representative at $20-37,000). After taxes, net pay would be $2,500/month. Okay, now I’m beginning to understand.

I did have student loans when I graduated, but if I remember correctly I spent about 7-8% of my disposable income on my payment (don’t ask me how I remember this). I didn’t have to spend a material amount on gasoline for my car; I certainly didn’t have cell phone bill, cable television, and internet access bills; and I also didn’t have to consider how much I was going to have to contribute from my paycheck for health insurance!

I see this as a brewing disconnect between employers and entry level candidates. As an employer, I feel that I can only pay so much for someone who brings to the table nothing but a (hopefully) good attitude and basic skills. However the reality is that young people – inexperienced as they are – still have to be able to pay all of their bills. I suppose they could work several jobs, but then how much will my company sacrifice because they are tired and stressed?

How does this relate to collections? Time will tell, but I see the potential for a generation of new professionals starting out their careers already behind the eight-ball, with more debt than their salaries will cover.

Stephanie Eidelman is the publisher of insideARM.com.

Dissension on the Democratic Ticket Over Credit Cards?

2008-08-27T03:08:00-07:00

With Barack Obama naming long-serving Delaware Senator Joe Biden as his #2 this past weekend, the mainstream media has been poring over Biden’s record and past, publicly vetting the VP nominee in print and on screen.

From a political standpoint, at first blush Biden seems to align quite nicely with Obama on most every issue, and even offering strength where Obama is seen most weak.

But there has been much made of Biden’s apparent allegiance to the credit card banking industry early this week (“Democratic VP Nominee Long Viewed as Ally of Credit Card Banks,” Aug. 26). Biden, once famously called “The Senator from MBNA,” does not exactly toe the Democratic party line when it comes to credit card and financial services regulation.

So what does this mean for the credit and collections industry? Anything?

Biden was a strong supporter of the Bankruptcy Reform Act in 2005, a bill that the accounts receivable management and banking industry also supported. But so far, he has been mute on credit card reform offered up by his Congressional colleagues and the Fed.

The real question for the industry would be: Will an Obama ticket with Biden be seen as acceptable to the financial services industry, and by extension, the ARM industry?

Is Your Company a Great Place to Work? Tell Us About It

2008-07-24T10:32:53-07:00

The debt collection industry is an interesting universe. Although the general public has a singular perception of what collectors are like at work, those in the industry know that collection agency workplaces are as diverse as any other industry. Some companies are great places to be employed, some aren’t.

insideARM is on a quest to find the best places to work in the credit and collection industry. As such, we’ve teamed up with The Best Companies Group to launch The Best Places to Work In Collections program.

It will be up to the industry to decide which companies are the best to work for, but we felt that we were the perfect group to facilitate such an endeavor. Over the next few months, we’ll be actively surveying companies in the industry – and their employees – to determine the best places to work. The results will be published early next year.

It all starts with registering your company at www.bestplacestoworkcollections.com. Company registrations must be completed by August 15, 2008. After that, The Best Companies Group will send out questionnaires to employers and their employees and tabulate the results.

This is not an informal poll or a “mood” survey. Each company that is registered will be evaluated thoroughly by The Best Companies Group. The group is responsible for creating many of the “Best Places to Work” lists you see in the media. And if a company chooses the online-only survey method, there is absolutely no cost to the company to participate.

Each company that participates will receive a free results overview report.

And don’t worry – there won’t be any “Worst Places to Work” lists published, so there’s really nothing keeping you from registering your company. Here’s that link again: www.bestplacestoworkcollections.com.

Credit Cards Make Appearance on Campaign Trail

2008-06-12T08:34:31-07:00

Sen. Barack Obama, the presumptive Democratic Presidential candidate, lambasted credit card companies� marketing tactics yesterday in a speech on the economy (�Obama Says Card Issuers Trick Consumers with Unfair Practices,� June 12).

While not specifically proposing any new legislation, Obama noted that card industry lobbyists were having undue influence on consumer laws. He cited the bankruptcy reform of 2005 as a prime example.

And maybe he has a point, after news of card marketer CompuCredit�s troubles with the FTC and FDIC.

But what impact would increased consumer notification have on the marketing of credit cards anyway? Most Democratic proposals seek not to drastically alter terms of contracts or impose additional taxes or regulations on card companies. They seem to be more in favor of additional disclosures to consumers regarding minimum payments and �plain language� explanations of terms and conditions.

So what kind of effect would new laws stressing simpler consumer communication have on the extension of credit via cards? There seems to already be plenty of card debt out there, and I seriously doubt Americans would suddenly give up their lust for credit spending. What do you think?

Below is a snippet of the speech yesterday provided by CNN.

Keeping the Crooks at Bay: Tips to Avoid the Advance Fee Scam

2008-05-09T09:21:33-07:00

The advance fee scam has become a major topic of conversation for commercial collectors as a team of crooks seem to be targeting the sector of the account receivables management industry. Collection experts are telling insideARM to get the word out. Lesson 1, if it looks too good to be true, it is.

Guest Blogger David Matten, owner of National One Credit Corp. in New York City, successfully fended off the crooks when they approached his firm. Matten offers some pointers to ensure your company isn’t the next victim.

HOW COLLECTION AGENCIES CAN AVOID BEING SCAMMED

With the emergence of Voice over Internet Protocol (VoIP) technology that allows you to work from any country and change how your number reads on incoming caller ID’s as well as an increase in online scams, collection agencies have now become the target of sophisticated international scammers looking to gain control of your trust accounts. You may have heard this one before… “If you don’t receive the check by tomorrow, simply provide us with the wiring instructions for your trust account and we’ll wire it immediately.” Don’t be surprised if you get a call from a merchant 2 or 3 weeks later stating your check bounced or your bookkeeper asks you why you purchased a new laptop in China. The scammers simply took the account number you provided and included your routing code (which is public record if they know where you bank), and the only thing left to do is provide a starter check number such as 99999 on their check drafting software. You would only find out about it after there is a discrepancy in your trust account (and this could take weeks to catch).

1.    The first and most important is NEVER UNDER ANY CIRCUMSTANCES wire funds to a client prior to clearance regardless of the pressure being placed on you to do so (and try to avoid wiring altogether). You must make it clear that your policy is to only remit upon clearance and you should maintain internal controls that only release funds once they have cleared (in the case of foreign funds this could take months). As most of us have existing relationship with banks, a portion of our funds are likely to be made available much sooner and the scammers know this and hope you remit even a small portion.

2.    If you receive an international claim make an attempt to call the client and confirm a working telephone number. Even if it’s after hours you may get a voicemail at the business that confirms the entity exists and that’s a start.

3.    Open a separate wire trust account independent of your operating and trust account and then simply move the wired funds to your trust once received. You thereby maintain a zero balance in your wire account at all times and there is nothing left for a scammer to debit or write checks off of.

4.    When dealing via email only - do your due diligence when the client emails you from public sources such as Yahoo, gmail, AOL, etc., as most legitimate companies have web sites and email addresses via their internal web hosting such as dmatten@national1credit.com. If you are getting a non-working number on the clients end (especially if it’s international) find out why that is. If client gives you excuses this should be cause for concern.

5.    If you receive an email placement from a questionable entity then you should put everything after the @ symbol into your web browser and check out their web site. You may find you are dealing with nothing more than a free internet email provider.

6.    Every check received over $10,000 should be verified - PERIOD. It takes 3-5 minutes to accomplish and saves you big time if the check is counterfeit. Simply do a quick online search for the paying bank and fax them a copy of the check. Most banks will not verify funds but will verify if a check is in fact genuine.

7.    Periodically check the endorsement on the back of the checks that you send out after your bank returns them and see if the signing party in fact matches the client who placed the claim. Be wary of “pay to the order of John Doe” or any individual for that matter per “Your company name”. Ask yourself … why is my business check being cashed by an individual?

8.    If the claim doesn’t pass the smell test, that’s probably because its bogus and no matter how excited you are thinking you just had a great month and you don’t want to lose this client so “lets just remit a portion early so we can get more claims” NEVER let your emotions get the better of you as you will only end up battling the bank for your funds back and you will likely lose.

9.    And finally … always question debtor payments in cash. A quick scenario … a client places a $175,000 claim (and there’s more where that came from you are told) but wants a major discount in rate as its more of an accounting issue than recovery as “debtor pays in frequent small payments and its only 2 weeks past due - this has become too difficult to manage”. You open the claim at 10% or less and debtor starts walking in with cash a few weeks later which you apply to the open balance. You then remit to client via wire and this is the easiest collection you have ever had. What you may have failed to realize is that you just assisted a money launderer at the inexpensive price of 10% (or less) of all cash received. What a bargain! That is until the feds call you and then you can re-read this article b/c I will personally send it to you at the courthouse. If it sounds too good to be true, it probably is too good to be true. So ask yourself “Why Me?” when something really spectacular crosses your desk and looks to easy to be legitimate.

ARM Industry Well-Prepared to Collect for IRS

2008-04-28T11:45:53-07:00

Our guest blog today is from Kimberly A. Mahoney, a corporate development manager with collection law firm Weltman, Weinberg & Reis Co. Kimberly responds to opponents of the IRS privatization program.

I have been following the progress, or considerable lack of it, on the IRS outsourcing issue for the past five years. I have a few comments on recent developments and the opinions expressed by those opposed to the effort.

First, am I the only one who finds it ironic that the IRS itself has been the subject of criticism over lost laptops containing tax payer information? Meanwhile, one of the largest arguments against using private debt collectors has been that we cannot adequately protect data?

Do they not realize that our industry has been scrutinized repeatedly regarding this issue? As a matter of fact we (at least our firm) have been audited over and over regarding the handling of sensitive consumer data by almost every top notch financial institution in the country. We are already held accountable for our ability to protect data. The difference being just that, we are accountable. If we lost laptops containing sensitive consumer data, there is NO WAY, that simply stating that we (via SELF evaluation) could find no "adverse effect" on any consumer would pass muster.

To the effective "neutering" of the private collections agencies due to lack of enforcement methods: Do they forget that the accounts being placed by the IRS are those that, for whatever reason, have yet to be contacted at all by the IRS? They have also not been disputed! If these files were such a priority, then why have they yet to do anything with them? Or to even have an internal process in discussion to fix it? It was not until the Republican Congress decided to revisit the outsourcing of this function, did the union for [the employees of] the Department of the Treasury raise a fuss. It was not until the potential for competition (from those driven by making a profit) became a possibility did they begin to lobby for increasing the IRS budget to accommodate additional agents to handle these previously "low priority" delinquencies.

Many collections agencies and law firms also currently collect funds/taxes on behalf of state governments, state agencies, federal agencies and municipalities, other than the IRS. Collecting federal income taxes would not be much different.

These types of accounts are the types that are highly desirable to collectors (non-disputed/non-worked). We have very sophisticated metrics and call strategies to maximize our recoveries. Please also keep in mind that our communications with debtors/delinquent taxpayers are already highly regulated by the FDCPA/FCRA. Also, although we are not directly subject to such statues as the GLB, Sarbanes Oxley, HIPPA etc., many collections agencies/law firms also adhere to these regulatory standards both as an internal best practice and to comply with the external financial institution audits mentioned above. Also, most of the time, "enforcement efforts" are saved for the very obstinate/hard to collect accounts. They are not the preferred front line method of collection. We would always rather work out an arrangement with a debtor rather than sue and enforce a judgment. Contrary to popular belief, we are not "happy" to litigate with folks.

All things being equal, using private debt collection firms would certainly be a "win/win" situation for all parties involved. The Government (representing the complying taxpayers) would finally collect long over-due taxes (duly owing and non-disputed). Those who DO pay their taxes on time as required would gain some peace of mind knowing that they are not supporting those who choose not to. Well deserving social programs and services would possibly find some desperately needed funding from this "windfall". Many folks would be provided with well paying, respectable jobs.

Best Regards,

From the (single, non-dependent having, taxpaying, young- "upwardly mobile" individual with a ridiculous tax rate that I am happy to pay ~ on time!)

Kimberly A. Mahoney

Wheres All That Tax Refund Money?

2008-04-22T11:05:32-07:00

We’ve heard from a number of different collection agency executives in the industry that the 2007 tax refund season hasn’t been as lucrative as in years past.

Typically, the first quarter of any given year is a boom time for collectors as indebted consumers get lumps sums of cash from their state and federal tax return refunds and apply them to outstanding debt. Perhaps it’s just a coincidence, but some of the people insideARM has spoken with have commented that those payments are weak this year.

The matter has come up in the news at least once: in its parent company’s earnings conference call, ARM giant WAM noted that “tax refund liquidation in the quarter was not as high as the company is accustomed to seeing,” (“WAM to Reduce Debt Buying in 2008 Over Funding Flap,” April 18).

Just today, I spoke with a collection agency owner on another topic and he said something very similar. A recent thread on the insideARM Discussion Forum also addressed lagging tax refund settlements.

Mike Ginsberg, CEO of ARM advisory firm Kaulkin Ginsberg, blogged a few weeks ago on the impact a sour economy was having on collections.

Is that the answer? Is a bad economy forcing consumers to use tax refunds differently this year? Or are tax refunds just smaller this year?

Are we even hearing this correctly? And if it is true, will the stimulus checks set to go out soon help fill the void?

We’d love to hear the experiences of those in the industry on tax refund payments this year. Please feel free to comment below.

Press Piling on Collectors � In a Good Way

2008-04-10T11:06:51-07:00

More of this, huh? Weekly business magazine BusinessWeek is running a laudatory article on the debt collection industry on its web site today. Maybe “laudatory” is a strong word … it just isn’t negative, a change for collectors of course.

The article looks at the growth opportunity for the accounts receivable management community in light of a sour economy and strained credit; not exactly breaking any new ground, but definitely a positive mention.

It follows a small string of positive mentions in mainstream media for the account receivables management industry. The New York Times has run two great articles on debt collectors in the past month: A local piece on Buffalo-area collection agencies supplying much-needed jobs to the region and a front page feature on collectors improving their image. USA Today then ran a letter to the editor from NARCA president Bob Markoff which explained the collections business from the industry’s point of view.

All of this positive press is not an accident. Industry trade groups have been engaged in a deliberate campaign to bolster the image of collectors, as insideARM reported this week (“Debt Collection Industry Invests in Capitol Hill Campaign,” April 9). In the article, we mentioned the lobbying efforts of ACA and the public relations push from NARCA, but they’re not the only ones working for the industry.

Gary Wood, past-president of debt buyers’ group DBA International, emailed me yesterday noting that they have also been active on Capitol Hill lobbying for ARM interests. DBA has had a relationship with a Washington-based law firm for more than two years that has taken the group’s case to members of Congress and various relevant government agencies.

While influential trade groups are working on the entire industry’s behalf, I think there is an opportunity for individual collection agencies and debt buyers to make their mark locally.

As the “credit crunch” expands – and the economy contracts – there will be a lot of press concerning consumer credit and past-due bills. ARM firms should take this opportunity to pitch stories to local media about how they are helping consumers during these difficult times. The stories are going to be written anyway, we might as well get our voices in them.

Collection Industry has Duty to Treat Consumers Equitably

2008-04-07T09:00:35-07:00

Guest Blog: USA Today yesterday ran the following Letter to the Editor from Robert Markoff, president, National Association of Retail Collection Attorneys (NARCA), and a partner with Baker, Milller, Markoff & Krasny in Chicago.

As a young man, the future President Abraham Lincoln suffered financial hardship. At least three judgments were entered against him for non-payment of debts. Lincoln paid the first judgment in installments. For the other debts, the sheriff sold a few of Lincoln's possessions, including his horse and saddle.

Today's turbulent economy is leaving many people unable to pay their debts. Consumers are disturbed when they, like Honest Abe, fall behind. Knowing that one of this country's most highly regarded citizens faced and overcame serious financial problems can provide some perspective in hard times.

If there were no consequences for non-payment of one's obligations, the temptation would be for no one to pay his bills. Debt collection is an important part of our economy. All consumers would be penalized if businesses were unable to recoup losses resulting from bad debt. In 2005, $39.3 billion was repaid, saving the average American household $351 in reduced prices and greater purchasing power.

Nonetheless, just as consumers must act responsibly, so too must collection professionals. Members of the collection industry should never miss the opportunity to do the right thing in helping consumers meet their responsibilities.

The industry need only look back at one of its predecessors when considering its professional conduct. Within a year of the sheriff's sale of Lincoln's possessions, Lincoln became a lawyer whose main court practice involved debts. Honest Abe was a collection attorney.

Recession on the Way, Impact Unclear

2008-04-07T08:46:04-07:00

What will a recession mean to you?

It’s been a while since the U.S. experienced a recession. In 2001, there was a mild recession, according to economists, as the Internet economy imploded. The last five, six years have been good, unemployment has been at historically low levels, and our industry has certainly benefited as consumers took on more debt.

There is, was, a maxim that collections did better in recessions, as more consumers went into debt. Others would say it’s not that simple, when the economy sours, everyone feels it.

Another truism is that the economy usually does better in an election year as politicians do everything they can to ensure the voters feel good. That way you vote for the incumbent, or better yet, skip voting entirely.

Next year is shaping up as the year for turning everything on its head. The clichés won’t apply anymore and we’ll be treading new ground.

What does seem clear is that it may be tougher to do deals as banks pull back from lending and credit gets tighter. Does that mean debt paper gets more expensive? Or will there be such a flood of paper that prices will drop?

Welcome to the insideARM.com Blogs

2008-04-04T12:02:30-07:00

It seems like blogs are everywhere these days, if not in practical reality then in conversations and vague ideas. We here at insideARM.com have known for a while that we needed to start a blog (or several), we were just unsure of how we would use it and what it would look like.

So rather than try to explain blogs in general, I'll give an overview of what we intended to do with ours. First, we will be using the Editorial Blog to keep our members abreast of changes and new features on the site and in our email newsletters. Also, we will post a daily blog entry with commentary on the news of the day and any other larger stories we are working on. But primarily, we hope that the Editorial Blog will serve as a means of interaction with you, our readers.

Through the Comments tool at the bottom of each blog entry, you can chime in on the entry and let us know what you think. Not only will you be able to directly communicate with us, we hope that the Comments will facilitate conversation between members. Let's just keep it clean.

Mike Ginsberg's ARM Industry Blog will feature high-level discussion of strategic issues facing ARM businesses. Mike is the CEO of ARM industry advisory firm Kaulkin Ginsberg Company. He and his team have a lot of experience on all sides of the industry: contingency and first-party collection agency work, debt purchasing, creditor issues, and vendor relationships. ARM industry executives and professionals can expect relevant and interesting discussion on this blog on many strategic issues. Mike's first blog post is on the recent credit crunch and its potential impact on ARM merger and acquisition activity.

Michael Klozotsky's blog on healthcare will take a look at current issues in the healthcare industry and place them into context for medical collection professionals and provider business office professionals. Michael is an analyst in the healthcare ARM space providing research and analysis for those involved in business side of medical care. His first entry discusses a recent New York Times article on a trend of doctors offering no-interest loans for patients for non-urgent procedures.

We certainly hope you enjoy our newest feature on insideARM.com. Please check back for updates, as we will be offering them often. If you have any comments, please use the Comment tool at the bottom of each post, or email us.

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Thanks NYTimes. Now, Lets Get Down to the Tough Part

2008-03-17T09:56:39-07:00

Many in the ARM industry have spent the last few days cheering themselves for a generally positive article in the New York Times on Friday that presented a balanced view of collections and collectors.

The headline “Debt Collectors Try to Put on a Friendlier Face,” summed up the piece. Some in the industry are moving away from an antagonistic approach to debtors, shifting instead to an approach where the collection agency works with the borrower, according to the Times.

The story notes that this change is occurring as many agencies find this ‘tough-love’ style often works, and because regulators are threatening the industry due to ever rising complaints about collector behavior.

How can the industry build on this generally fair story? The Times reports that ACA International is going to conduct a national consumer education campaign, and NARCA has hired a lobbyist to better present its views on Capitol Hill.

That’s great. But a better way is to create an aggressive self regulating organization that finds and flushes out the jerks that break the rules and make the entire business look bad. The industry needs to do this to gain credibility with the public and with regulators.

Tough Love can be a smart approach. Maybe its time the industry practices it on itself.

Top 10 Debtor Excuses

2008-03-13T06:39:47-07:00

Excuses – you hear them every day. Many readers have shared their strangest ones in our insideARM discussion forum. For your reading enjoyment, here are our “Top 10 Favorite Debtor Excuses:”

# 10. "The check is in the mail"

# 9. “How dare you call on a Sunday? I am going to pray for bad things to happen to you.”

# 8. “I don't owe a deficiency balance; you should have never lent me the money.”

# 7. “I know people in the FBI and CIA and I’m gonna' get them involved.” (Over a $350 overdraft)

# 6. "Ya'll ain't gonna furnish (garnish) my wages, are ya?"

# 5. "I can't pay because I am indignant" (I think he meant "indigent")

# 4. "OK, let me get this straight, you want me to release the $45,000 bank levy so you can make payments? Um...No!"

# 3. "Well, I guess I'll just have to sign up for welfare so I can get you paid then."

# 2. “You just don't understand, my grandfather just died, I had to take the dog to the vet, my son needed surgery, I was out of checks but I have them now, oh but you have probably heard all this before."

… and the #1 Favorite Debtor Excuse is:

“I will come through the phone and give you an eargasm if you stop calling.”

Some excuses that can’t go unmentioned …

“I had a debtor that would talk to herself for HOURS, describing how the government is out to get her, and how there are black helicopters following her around. She also sent me a 25-page Unabomber-type manifesto describing how the government is responsible for all her debt.”

“A woman sent us a letter stating that she couldn't pay her bill because Bill Clinton and the CIA had planted bugs all over her house and had hidden cameras in the walls. She was afraid to call us because she thought they would steal her identity when she verified her information. She also apologized for how sloppy her hand writing was because she was hiding in the closet writing the letter with the lights out so they couldn't see who she was writing to.”

“I had a debtor explain to me that he couldn't pay his bill because he couldn't find a job, and he couldn't find a job because he had a felony for theft and every employer in his city wouldn't hire someone with a felony. I asked why he didn't just avoid mentioning the felony on the application, certainly not every company paid for background checks. He responded, "I couldn't lie. I'm too much of an honest person to do that!"

What excuses have you heard? Share them with us in the comments section below or on the discussion forum.

A Huge Collection Contract Behind a Huge Wall of Secrecy

2008-03-05T01:45:19-07:00

"Seal up your lips and give no words but mum." – John Hume in Shakespeare’s Henry VI, Part 2

Those associated with the Internal Revenue Service’s initiative to outsource some debt collection to private agencies have read their Shakespeare. Although the IRS confirmed to insideARM yesterday the extension of the collection contracts with their two vendors, CBE Group and Pioneer Credit, little else was said of the program (“IRS Renews Collection Contracts with Two Agencies,” March 4).

In fact, both CBE and Pioneer declined to comment, the IRS declined to provide any more information and even the lobbyist representing the collectors failed to return calls. And I can’t say I blame them.

The program is under the most concerted and threatening attack it has yet to endure. A bill killing the program is before a Senate committee, majority party lawmakers and opposition groups are dialing up the rhetoric and the national taxpayer advocate has called for the program’s termination. Seemingly, the only allies the program counts in the fight are minority party lawmakers whose first priority is re-election and a President so devoid of political capital it’s probably a bad thing he supports the program.

Lost in all the secrecy and whining (by me) about a lack of allies is the current month and year: March 2008. The tentative timeline laid out by the IRS when the program began called for more collection agencies, up to 10, to be added to the contract this month. In an interview earlier this year, the head of one of the collectors on the contract said it’s ready for expansion (“Expand IRS Outsourcing Program: CBE Chief,” Jan. 17).

So how should we take yesterday’s news? Does it mean that the program won’t expand, that the IRS decided to leave the program in pilot until the storm blows over? Or are they working behind the scenes on a major vendor procurement and we’ll get an announcement any day now? And does any of it even matter, since the program may be destined for the chopping block anyway?

Has the Legal Collection Strategy Gone Too Far?

2008-02-13T06:20:34-07:00

Legal collections have long been an effective strategy to collect money from consumers. Now, it appears that it is becoming a central strategy.

Last October at the FTC debt collection workshop, much of the consumer representatives’ time was spent railing against the ARM industry’s growing love affair with legal collection strategies. It's become common for all of the publicly-traded debt purchasers/collectors to extensively discuss their legal collections in quarterly earnings calls.

Now, one collection attorney in Oregon has gotten into trouble for his actions in cases filed against consumers ("Oregon Collection Lawyer in Hot Water Over Suits," Feb. 12). Apparently, he sued a lot of consumers.

So is this just a case of consumer advocates latching on to an effective strategy? Or has the industry become too reliant on “non-traditional” collection techniques?

A New Discussion Board? Tell Me More

2008-01-09T03:27:04-07:00

The discussion board is one of the most popular hangouts for the ARM community. It's where users can go beyond the headlines and reach out to thousands of their peers for ideas, insights and opportunities on the industry.

Why is this news now? Well we've upgraded our discussion board to a much cleaner, user-friendly interface. For all you board veterans, fear not, all your posts and private messages are still there. There's also an added coolness factor where can create a more dynamic profile with a custom icon.

If you've never checked out the discussion board, what are you waiting for? We've now simplified the process. You just need to be a registered user of insideARM.com and set up a nickname (takes a couple of seconds). If you're unable to access the discussion board, then let us know.

Don't know where to start?

With all the attention of the Iowa caucuses and the upcoming primaries in New Hampshire and Florida, we thought we'd jump in and set up a simple straw poll just for our ARM community. You'll find the poll on -- where else? -- our newly upgraded discussion board.

Vote Now on the ARM Primary Straw Poll

We've also started a topic where you can share your thoughts on the current primary and discuss which candidate you think is best or worst for the ARM industry.

insideARM.com: we make accounts receivable exciting.

Bilaal Ahmed is insideARM's product development manager. He is responsible for new technology features and reader satisfaction. You can reach him at 240-499-3822 or by email.

Why We Do What We Do

2007-12-24T09:53:50-07:00

It's no secret that debt collectors get very bad press on the national and local level. There are countless examples of this, but here is one segment that ran on the Fox affiliate in Washington, DC just last week:

Abusive Debt Collector Tactics Caught on Tape

It's not that there aren't plenty of collectors that ignore the law and commit egregious acts, because there are plenty of those. But when we see a piece, like the one above, that implies -- or actually comes out and says -- this behavior is standard operating procedure, we get a little mad.

We started this site to serve an audience that is under-served in traditional media. We try not to be blatant cheerleaders or naive defenders of the industry. But we have always, and will always, try to give all sides to a story...including the debt collectors' side.

Thank you for your support over the years. Our readers are the most critical component in our success. If you have any news you'd like to share, or a suggestion for a story, just contact us and we'll listen.

Have a safe and happy holiday season.