Representatives from the debt collection industry make billions of contacts with consumers on behalf of creditors every year. A significant percentage of these communications are conducted via telephone; thus, outbound calling compliance ranks among the most important issues facing the accounts receivable management (ARM) industry. But calling compliance is not only an operational imperative for collection firms; it is also a moving target. The amalgamation of changes in business and consumer technologies, the protracted effects of the economic crisis of 2008, increased scrutiny by federal regulatory bodies, and a minefield of individual state and local laws, increases collection agencies’ reputational risk, drives litigation and overhead expense, and poses very real challenges to the fundamental business model of ARM companies.
Specific examples abound.
Cellular phones—in actuality, handheld computers that also make telephone calls—are virtually ubiquitous in the United States today. According to the Federal Communication Commission’s (FCC) 15th Annual Mobile Wireless Competition Report released at the end of June 2011, 89 percent of Americans are mobile phone subscribers and almost a quarter of the country lives in a cellular-only household. More telling is that 50 percent of all US adults age 25-29 have abandoned landlines entirely, a relatively young demographic now increasingly mobile and more difficult to contact.
Consumer complaint statistics are quoted (and often misconstrued) in nearly every mainstream news story about the debt collection industry. Even as print newspaper circulation has plummeted, the Internet enables instantaneous transmission of full-length online news in as few as 140 characters or less (via Twitter) to those millions of mobile devices mentioned above. Among those consumers who read complaint information about the ARM industry are policy advocates, consumer rights attorneys, federal and state lawmakers and regulators, and state attorneys general.
And among the most common complaints they read about are those related to outbound debt collection calls. In 2009, the Federal Trade Commission (FTC) received 41,028 complaints alleging that collectors had harassed complainants by calling repeatedly or continuously. This category of complaints accounted for almost 47 percent of the total complaints received by the FTC about collection agencies in 2009. In March 2011, the FTC reported an 18 percent increase in debt collection complaints in 2010 over 2009. Complaints against third-party debt collectors were up nearly 25 percent and the top complaint in 2010 remained that “[a] debt collector calls repeatedly or continuously.”
The full paper breaks down all of the calling compliance challenges facing your firm today.
Hot Button Issues in Calling Compliance
The Foti Decision and FDCPA
As most in the ARM industry are aware, the Foti Decision is a landmark case related to calling compliance. In the Foti case, the answering machine message left on Paul S. Foti’s answering machine – “Good day, we are calling from NCO Financial Systems regarding a personal business matter that requires your immediate attention” – was deemed to be a violation of FDCPA Section 1692e(11) because the caller’s name “Did not adequately disclose that the caller was attempting to collect a debt.” But a paradox arises because full disclosure that the communication is an attempt to collect a debt –a requirement of the FDCPA—could also violate prohibitions on third-party disclosure if the person listening to the message is not the alleged debtor.
TCPA Facts and Concerns
The full report covers the following topics in detail:
- The Telephone Consumer Protection ACT of 1991 (TCPA)
- Reversals to the legislation
- Dealing with wireless numbers
Outbound Calling Compliance Tips and Suggestions
Download the Calling Compliance paper and get the full list:
- Educate your clients. Request additional information on service contracts and push for express permission to contact consumers via any and all means (including mobile phones). If you are a debt buyer or collection agency, determine means for receiving, storing, and accessing prior written approval given to your creditor clients.
- Invest in employee compliance training. Make ongoing compliance training a high priority, specifically as it relates to new state or federal laws, regulations and/or policies and your company’s approach to them.
- Implement technologies that help monitor employee compliance; for example, voice analytics tools are now capable of confirming in real-time whether mini-Miranda and other disclosures are being made by collection representatives.
- Download the paper for the rest of our tips for Calling Compliance.
Get your firm prepared – download the Calling Compliance paper now.
If you’re an ARM firm that deals with outbound calls, you need to ensure that your team is compliant. Download the paper for a simple, straightforward breakdown of what your company needs to know about legislation and how to take action to stay compliant.
Managing Editor, insideARM.com