Archives for February 2023

The FTC recently sent its annual letter to the CFPB reporting on the FTC’s activities related to the Equal Credit Opportunity Act (ECOA) and Regulation B.  The new letter reports on the FTC’s activities in 2022.  The Bureau includes the FTC’s annual letter in its own annual report to Congress on the ECOA.

[article_ad]

The FTC has authority to enforce the ECOA and Regulation B with respect to nonbank financial service providers within its jurisdiction.  The letter notes that, consistent with the Dodd-Frank Act, the FTC continues to coordinate certain ECOA enforcement and other activities with the CFPB pursuant to a memorandum of understanding with the Bureau.

With regard to fair lending enforcement, the letter highlights the settlements in two FTC enforcement actions against two groups of auto dealerships, Passport Automotive Group and Napleton Auto Group, in which the FTC alleged the dealerships violated the ECOA and Regulation B by discriminating against Black consumers (and, in the case of Passport, also Latino consumers), charging them higher financing costs and fees.  The FTC’s lawsuit against Napleton was filed jointly with the Illinois Attorney General.  In its lawsuit against Passport, the FTC alleged that the alleged discriminatory conduct also constituted unfair discrimination in violation of Section 5 of the FTC Act.

With regard to fair lending research and policy development, the letter discusses (1) a report to Congress issued by the FTC in 2022 that discussed risks arising from the use of artificial intelligence by big tech platforms and other users, including the risk that AI can result in discrimination against protected classes of individuals; (2) a conference co-hosted by the FTC in 2022 that included a discussion on designing compensation in the auto loan market and concerns arising from discretionary markups; (3) the FTC staff’s continuation of its work as a liaison to the American Bar Association’s Standing Committee on Legal Assistance for Military Personnel which supports initiatives to deliver legal assistance and services to servicemembers, veterans, and their families, and (4) the FTC’s continuation of its (a) service as a member of the Interagency Task Force on Fair Lending along with the CFPB, DOJ, HUD and the federal banking agencies, and (b) participation in the Interagency Fair Lending Methodologies Working Group which consists of staff members from the FTC, CFPB, DOJ, HUD, federal banking agencies, and the Federal Housing Finance Agency.

With regard to fair lending consumer and business education, the letter discusses the FTC’s “efforts to provide education on significant issues to which Regulation B pertains.”  The efforts described consist of guidance for consumers on credit discrimination, data released by the FTC on harm to people living in majority Black communities arising from fraud and other consumer problems, alerts to consumers about the 2022 auto dealer enforcement cases, and guidance to business on the settlements in those cases.

DENVER, Colo. — Harvest Strategy Group, Inc. (Harvest) announces the addition of Marc Savage to its Board of Directors.  

“We are excited to have Marc join our board.  Marc’s deep knowledge of technology and diverse background gives him great insights into strategic solutions,” said Harvest President & CEO Brad McCurnin.  “His role on the Harvest board supports our long-term technology roadmap.” 

[article_ad]

Savage brings over 25 years of technology management experience and will further support Harvest’s direction of being a leader in technology for compliance, reporting, and operational efficiencies.  Savage has a long history of serving the technology needs of the accounts receivable management industry and is the founder and CEO of Emprise Technologies, a Toledo, OH based technology company.  

“I am excited to serve the Harvest organization in this capacity.  Harvest has a long history of innovation and growth, and I look forward to contributing to that continued success,” said Savage.  

“The importance of technology in service delivery cannot be overstated.  Marc’s experience strengthens our board in this important area.” reports Martin Ravin, Executive Chairman.

About Harvest Strategy Group

Harvest Strategy Group, Inc. (Harvest) is a recognized leader in national accounts receivable management services, delivering best-in-class results for the nation’s largest banks, finance companies and credit unions. Harvest’s mission is to execute custom recovery programs on behalf of its clients to maximize revenue, while protecting their brand with proven regulatory compliance and vendor oversight processes. Harvest’s leading recovery performance is fueled by ProScoreTM, its proprietary portfolio scoring and segmentation model. For more information, visit www.harveststrategygroup.com or call (303) 531-0631.

The New York Department of Financial Services and the New York City Department of Consumer and Worker Protection are simultaneously engaged in amending their consumer debt collection rules. While the DFS rulemaking has been underway for nearly two years, the DCWP began its efforts last fall.

The DFS amendments would be a significant overhaul of its existing regulations and would cover new debt types. And, any time coverage of debt types is expanded, the scope of covered persons can increase. An unexpected twist in New York City’s proposal is the elimination of creditors from its coverage.

Both would introduce new disclosure requirements and additional restrictions on communications – particularly electronic communications.

The DFS proposed amendments are available here. The DCWP proposed amendments are here.

Final Amendments May Be Different

Both agencies have only proposed amendments. The comment period on the DFS amendments is still underway, while comments and a public hearing on the DCWP amendments were completed last December. It could be months before we see a final rule from either agency, and either may make significant changes to what we have today. To be sure, DFS first proposed its amendments in 2021 and has made significant changes to arrive at the current version released in December 2022.

Effective Dates

As to the effective date of the amendments, it depends on when the agencies publish their final rule amendments. DFS is proposing 180 days following the adoption of its amendments. Since DFS typically conducts a thorough review of submitted comments, the earliest I would expect publication of their amendments is mid-March, meaning that whatever is finally adopted would not be effective, at the earliest, until sometime in September. My guess is that it will take a bit longer for DFS to finalize its amendments.

DCWP could provide little more than 30 days before its amendments take effect. At the earliest, we could see the final amendments sometime later this month or mid-March.

Here is a look at some of the most significant amendments.

Covered Debt — DFS Adds Medical Debt, Sale Of Goods, Judgments  

First, both regulations remain limited to consumer debt, which is incurred primarily for personal, family, or household purposes. DFS’ existing regulation covers debt “wherein credit has been extended to a consumer.” The proposed amendment would strike this limitation. Existing DFS regulations exclude most debt arising out “of a transaction wherein credit has been provided by a seller of goods or services . . .” and the amendment would strike this exclusion too. The result of these changes would be to capture medical debt and indirect motor vehicle loans, among other debt types.

Another material change proposed by DFS is to include judgments within covered debt.

I expect these proposals will be part of the final amendments.

Covered Persons — DCWP’s
Creditor Exclusion, Potential Creditor Inclusion Under DFS Tighter Attorney
Regulation

At least a dozen other states and locales (including New York City and New York State) include creditors within their debt collection laws or regulations. New York City proposes to exclude creditors which bucks the trend seen in other locales, like the District of Columbia. Effective Jan. 1, DC’s debt collection law was expanded to include more types of creditors (“first party collectors”), even those collecting their own “past due” debt. DCWP’s proposed creditor exclusion would be the first time I can recall any covered entity being removed from a debt collection regulation. You would have expected consumer advocates to push back. In 2014, the National Consumer Law Center submitted comments to the Consumer Financial Protection Bureau, urging it to include first-party collectors within certain provisions of Regulation F.  Surprisingly, comments from the National Consumer Law Center to DCWP had no objection to the creditor exclusion, nor did comments from several other consumer advocacy groups. I expect the creditor exclusion to remain in the DCWP final amendments.

Both DCWP and DFS propose amendments that tighten regulation over attorneys collecting debt, a trend observed in recent activity in both the District of Columbia and California.

DFS also proposes amendments that might capture creditors who acquire portfolios of debt containing non-performing loans. While I do not believe this was intended, the troublesome language has not changed since DFS first proposed it in 2021.

Initial Disclosures

DFS overhauls its requirements for initial disclosures and expressly provides they must be delivered “in writing” and prohibits electronic delivery. DCWP also makes slight revisions to its initial disclosure requirements to better align with DFS’ proposed amendments and federal law. As to electronic delivery of the initial disclosures, DCWP proposes that it can be made “in accordance with § 5.77(b)(5).” However, proposed § 5.77(b)(5)(i) requires that a debt collector “must provide a written validation notice to the consumer … prior to contacting a consumer by electronic communication.”

DFS also proposes that its initial disclosures provide “instructions on how to dispute the validity of the debt.” There are innumerable ways a consumer could dispute a debt under both the proposed DFS regulations and federal law, making this requirement nonsensical and dangerous for both debt collectors and consumers.

Verification/Substantiation

One of the most significant proposed amendments by DFS is to trigger a debt collector’s requirement to provide verification (or “substantiation” as DFS calls it) in response to a dispute, regardless of whether that dispute is made verbally or in writing. It also shortens the time to provide substantiation from 60 to 45 days. Specifically, DFS’ proposed language triggers substantiation when a debtor disputes “the validity of a debt or the right of the debt collector to collect on a debt.” The inclusion of “right to collect” here is at odds with the proposed initial disclosure requirement of informing a consumer only how they can “dispute the validity of debt” noted above.

DFS’ proposal also allows a triggering dispute to occur at any time but limits the debt collector’s duty to substantiate to “only once during the period that the debt collector owns or has the right to collect the debt.”

The DFS proposal is a significant departure from its existing rule and the requirements imposed on debt collectors under the federal Fair Debt Collection Practices Act.

For debts that cannot be verified “within 30 days of receiving the dispute or a request,” the DCWP proposal would require a debt collector to provide a consumer with an “Unverified Debt Notice” stating that “the debt collector is unable to verify the debt and will stop collecting on the debt, and provide the reason that the debt could not be verified.”

Communication Restrictions — NYC’s Extraordinary Communication Cap Proposal

Both agencies propose significant restrictions on electronic communications and DFS expressly requires consumers to opt-in, in writing, before a debt collector makes an electronic communication. DFS proposes that the opt-in take the form of “revocable consent in writing.” 

The proposals from DCWP go even further. The New York City agency proposes to limit all communications and attempted communications (like limited content messages) to no more than “three times during a seven-consecutive-calendar-day period, or once within such period after having had an exchange with the consumer in any medium in connection with the collection of such debt.” This cap is not limited to telephone calls but includes letters and any other communication “medium.” What DCWP intends to cover by referencing “an exchange” is unclear. On the flip side, DCWP proposes to exclude from this cap “any communication, attempted communication or exchange between a consumer and the debt collector which is initiated by or at the request of a consumer or in response to a communication from the consumer, or any communication which is required by law.” Again, the meaning of “exchange” is unclear.

It is also unclear whether DCWP intends the cap to be per consumer or per debt. In other words, it is not clear whether a debt collector having multiple debts to collect from the same consumer is limited to communicating three times during the seven-day period as to all debts. Some commentators suggested that DCWP’s cap could be interpreted as restricting three communications each week to each medium – meaning, three phone calls, three letters and three emails, for example. That sounds like a strained interpretation, and I expect DCWP to address these issues in its final rule.  

DFS does not propose a hard cap on communications but will continue prohibiting excessive communications. It does propose a presumption of compliance with telephone calls if the calls are limited to “one completed telephone call and three attempted telephone calls per seven-day period per alleged debt.” It would exclude telephone calls required by DFS rules or other law, “or when such communication is made in response to the consumer’s request to be contacted …”

“Time-Barred” Debt

Both proposals revise existing “time-barred” debt disclosures to align with recent changes in New York law. Both propose the new disclosures be made in all communications to collect time-barred debt.

While neither prohibits communicating with a consumer orally or in writing to collect such debt, DFS added a prohibition against collecting time-barred debt “exclusively by telephone or by other means of oral communication.” As DFS explained in an “Assessment of Public Comment,” this would “not bar oral or phone communication entirely.”

No Private Right of Action

Neither regulation has a private right of action, and none are proposed.

ARM Industry Response

Industry trade associations composed of the Receivables Management Association International, ACA International, the New York Creditors Bar, and the New York Collectors Association have engaged DFS on its proposals since 2021 and continue to do so with their written comments to be delivered soon. The same trade associations provided testimony at the Dec. 19, 2022, DCWP hearing.

Seven Points to Remember

1. There are no final amendments from either agency.

2. If or when the agencies will publish final rules is unknown.

3. Both regulations propose greater restrictions on consumer debt collection communications than existing law.

4. Neither contains a private right of action.

5. New York City may exclude creditors, but certain creditors may be pulled into DFS’ regulations if they acquire portfolios of consumer debt.

6. If the DFS proposals are adopted in their present form, third-party debt collectors and debt buyers collecting consumer debt in New York State:
   
   –  will need a top-down reassessment of their existing collection operations to comply with the amendments; and

   –  may find it difficult, if not impossible, to use Regulation F’s Model Validation Notice.

7. If both DFS and DCWP amendments are adopted largely as proposed, covered entities collecting debt in New York City will need to marry their operations to the two regulations, and sort out the several conflicts between the two. DFS proposes that local laws (like DCWP’s) are effective if such law provides “greater protection” than DFS’ regulations. Particularly, New York City would have additional disclosure requirements and introduces different restrictions on debt collection communications.

This is not an exhaustive outline of all the revisions contained in both proposals, and there are plenty more than written about here. After all, these are just proposals, and the final amendments are yet to be published.

The New York Department of Financial Services (NY DFS) has continued its years-long process to update its debt collection regulations. According to the Consumer Relations Consortium (CRC), however, the current version of the proposal conflicts with existing law, oversimplifies the statute of limitations, and harms consumers by depriving them of their preferred communication channel and prohibiting the use of the charge-off date on certain types of accounts. 

The NY DFS originally proposed amendments to the debt collection regulations in late 2021. In February 2022, the CRC submitted a comment addressing the issues with the proposal, and in late December 2022, the NY DFS released an updated proposal. 

To highlight the unintended consequences of the updated proposal, on February 13, 2023, the CRC submitted a comment prepared by Legal Advisory Board members John Rossman of Moss and Barnett and Abigail Pressler of Ballard Spahr. CRC member, Kelly Knepper-Stephens of TrueAccord also contributed. 

The CRC’s comment raised the following concerns:

Conflict with existing law

the ADA- compliant letter format included in the proposed amendment conflicts with existing New York Law. Specifically, the proposed regulations require debt collectors to provide notice in a format requested by the consumer. However, a separate New York law (NY GBL 601-b) requires the consumer may request certain notices in a reasonably accommodating format selected by the principal creditor or debt collector. The CRC recommended that the NY DFS address this conflict in future updates to the proposal. 

The Statute of Limitations is complex

[article_ad]

If left unchanged, the proposed amendment would require debt collectors to advise consumers of “the applicable statute of limitations for the debt, expressed in years.” The CRC pointed out that this is a legal question that requires contract review and conflict of law analysis to determine at the individual account level. The CRC then referred NY DFS to a study by the Consumer Financial Protection Bureau (CFPB) that suggested an alternative statute of limitations disclosure; one which does not require legal analysis on every account. 

Prohibiting use of charge-off date harms consumers 

Though the current version of the New York debt collection regulations require debt collectors to provide debt itemization “as of charge-off” the proposed amendment limits the use of the charge-off date only to revolving or open-end credit accounts. For all other types of accounts, collectors would be required to use the last payment date if it is available. In its comment, the CRC explained that charge-off date is the best option for consumers because it is a static, well-defined date, and is more recent than the last transaction. Further, because this proposal is in direct conflict with Regulation F and with the current rule, there is an increased risk of consumer confusion. 

Digital communications limits harm consumers

The current iteration of the proposed amendment restricts digital communication methods. In its comment, the CRC described why these types of restrictions harm consumers.  The CRC explained that Digital communications channels increase consumer protection. Email addresses are not reassigned, therefore using email has far less risk of third-party disclosure. Digital communications are written, documented, and can be searched, ensuring consumers have records of all their communications regarding the debt. Further, the more channels available to reach consumers, the greater the likelihood they will receive crucial disclosures. 

Most importantly, consumer behavior indicates they want to communicate via digital channels. They want consistency and they want to be able to communicate in the same manner which they did with the creditor. Restricting electronic communication means there is no “easy path” for those who want to take care of their debt; they will always, at some point, need to get on the phone with someone. This prevents consumers from resolving their debts early and leads directly to credit score degradation and increased litigation. 

The CRC’s full comment can be found here. 

About the Consumer Relations Consortium 

The Consumer Relations Consortium (CRC) is an organization comprised of more than 60 national companies representing the diverse ecosystem of debt collection including creditors, data/technology providers and compliance-oriented debt collectors that are larger market participants. Established in 2013, CRC is evolving the debt collection paradigm by engaging stakeholders—including consumer advocates, Federal and State regulators, academic and industry thought leaders, creditors and debt collectors—and challenging them to move beyond talking points and focus on fashioning real-world solutions that actually improve the consumer experience. CRC’s collaborative and candid approach is unique in the market.  CRC is managed by The iA Institute.

About the Legal Advisory Board

The Legal Advisory Board (LAB) is an exclusive membership group of outside counsel with expertise in the accounts receivable industry who have each pledged their time and resources to support the mission of the CRC. The LAB is limited to ten law firms and is comprised of fourteen total attorneys. Throughout the year, the LAB serves as a legal resource to the CRC membership and assists in fulfilling the mission of promoting forward-thinking approaches to the issues raised by regulatory policy and technology innovation in the accounts receivable industry.

The Middle District of Florida rounded out 2022 by ruling in conformance with Eleventh Circuit precedent that plaintiffs must have a factual, rather than legal, dispute to bring suit against a credit furnisher under §1681s-2b of the Fair Credit Reporting Act (FCRA).

In Belair v. Holiday Inn Club Vacations Inc., the plaintiffs contracted to purchase a timeshare from the defendant, Holiday Inn Club Vacations Inc. (Holiday Inn), with a promissory note requiring monthly installment payments secured by a deed of trust. The plaintiffs later requested rescission of the contract, cancellation of the loan, and tradeline deletion so the loan would not appear on their consumer reports. The plaintiffs’ requests for rescission, cancellation, and tradeline deletion were denied and the timeshare’s special warranty deed was recorded.

Later, when the plaintiffs stopped making payments on the loan, Holiday Inn allegedly reported the delinquency to a consumer reporting agency (CRA). The plaintiffs disputed this information with the CRA, but the dispute did not result in a change in how the loan was reported. The plaintiffs sued for violations of the Florida Consumer Collection Practices Act (FCCPA) and the FCRA.

In its summary judgment opinion, the court addressed only the FCRA claim, holding the plaintiffs’ dispute was inherently a legal one that was not actionable under section 1681s-2(b).

The court rejected the plaintiffs’ contention that their credit dispute involved a factual issue based on an unpublished Eleventh Circuit decision, which stands for the position that “[a] plaintiff must show a factual inaccuracy rather than the existence of disputed legal questions to bring suit against a furnisher under § 1681s-2(b) [of the FCRA].” The court was not persuaded by nonbinding, out-of-circuit authority and amicus briefs cited by the plaintiffs which were submitted by the Consumer Financial Protection Bureau and Federal Trade Commission to the Second and Ninth Circuit Courts of Appeals in separate litigation involving this issue. 

The court declined the opportunity to contradict the Eleventh Circuit’s unpublished precedent ruling that a furnisher’s duty to investigate under the FCRA does not apply to legal disputes. The court explained that because the plaintiffs had stopped making payments on the loan and Holiday Inn could verify the plaintiffs’ missed payments, the accuracy of Holiday Inn’s reporting and reasonableness of its investigation of the disputed information, traditionally factual issues, were not at issue. Therefore, all that was left for the court to resolve was the legality and enforceability of the loan contract. But these issues are not actionable under a FCRA claim analysis.

The court also provided its views on how to decipher whether future claims under section 1681s-2(b) involve legal versus factual issues. In this court’s view, if there is formal confirmation of the validity of an underlying debt, such as a determination that the debt was discharged in bankruptcy, then the debt may present a factual issue for courts to consider, such as whether a furnisher’s credit investigation was reasonable, and plaintiffs may be able to bring a suit against a furnisher. However, at least in the Eleventh Circuit, when both parties and courts disagree over the legal precedent and analysis of how a debt is characterized and whether it remains valid, the issue will likely be considered legal in nature and cannot provide a basis for a FCRA claim.

Read the Opinion here. 

ROCHESTER, N.Y. — Continental Service Group, Inc., d/b/a ConServe, announces that they have once again earned a spot on Training magazine’s, 2023 Training APEX Awards.  The Training APEX Awards ranking is determined by assessing a range of qualitative and quantitative factors, including financial investment in employee development, the scope of development programs, how closely such development efforts are linked to business goals and objectives, and their effectiveness in terms of business impact.

“The passion for learning and development burns brightly in the 2023 Training APEX Awards organizations,” notes Training Editor/Publisher Lorri Freifeld. “We salute these best-in-class organizations for their ability to consistently and agilely deliver stellar training in an ever-changing world while providing a culture that allows their people to grow and thrive at work.”

“ConServe is exceptionally proud to be recognized as a Training APEX Award winner for the ninth consecutive year,” said George Huyler, VP of Human Resources.  He continues, “at ConServe, we remain advocates of lifelong learning and it is an honor to be among the 2023 Training APEX Awards winners.”  David Bucciarelli, ConServe’s Director of Organizational Development adds, “This designation recognizes ConServe as a top training organization and as one of the most successful learning and development programs in the world.  This reinforces our commitment to continuous improvement and to our comprehensive training program.”

Training magazine recognized the 2023 APEX Award winners and revealed their rankings at the Training APEX Awards Gala on February 13, 2023 in Orlando, Florida.

About ConServe

ConServe is a top-performing accounts receivable management service provider specializing in customized recovery solutions for their Clients. Anchored in ethics and compliance, and steadfast in their pursuit of excellence, they are a consumer-centric organization that operates as an extension of their Clients’ valued brands.  For over 37 years, they have partnered with their Clients to provide unmatched customer service while simultaneously helping them achieve their accounts receivable management goals.  Visit us online at: www.conserve-arm.com

About Training magazine

Training magazine is the leading business publication for learning and development and HR professionals. It has been the ultimate resource for innovative learning and development—in print, in person, and online—over the last 55-plus years. Training magazine and Training magazine Events are produced by Lakewood Media Group. For more information about the 2023 Training Conference & Expo, please visit: www.trainingconference.com

GENESEO, N.Y. — Coast Professional, Inc. (Coast) is excited to announce the promotion of Mr. Samuel A. Thelen to Vice President of Information Technology. In his new role, Mr. Thelen will be responsible for guided implementation of company-wide enterprise security strategy for network and hardware, disaster recovery, data protection, and endpoint protection. His experience and deep understanding of industry best practices will enable him to identify, recommend, develop, implement, and support new processes, tools, and solutions to achieve better business results.

Mr. Thelen has 23 years of Information Technology experience. He began his career in 1995 as a UNIX Systems Administrator in the United States Marine Corps where he was awarded a Navy and Marine Corps Commendation Medal for Outstanding Service. After five years of military service, Mr. Thelen held IT supervisory positions including Infrastructure Manager/Senior Systems Engineer, Team Lead, and IT Architect. He has been responsible for network infrastructures, enterprise messaging and archiving, database deployment, data backup systems, and project management methodologies.

Mr. Thelen joined Coast in 2019 as Director of Information Technology and Architecture. He was later promoted to Senior Director of Information Technology where he has proven to be an inspiring leader who thrives in challenging, complex computing environments delivering high level design. He has instituted policy and standards, and improved Architecture’s overall capabilities.

[article_ad]

“I would like to personally congratulate Samuel on this well-deserved promotion,” said Annmarie Buchanan, Chief Information Officer & Chief Information Security Officer. “Since joining Coast, he has demonstrated exemplary leadership skills and consistent success. His ability to overcome obstacles and develop comprehensive solutions to complex problems are second to none.”

Mr. Thelen resides in the Niagara Falls area in upstate New York. In his personal time, he enjoys volunteering with the Boy Scouts of America where he serves as Scout Master.

About Coast Professional, Inc.:

Coast Professional, Inc. is a full-service accounts receivable management and contact center company dedicated to respectful and ethical communication with consumers. Coast provides essential call center services to hundreds of clients including federal, state, and county governments; higher education institutions; municipalities; and courts. Coast is an eight-time honoree on the Inc. 5000 list for America’s Fastest-Growing Private Companies provided by Inc. Magazine and in 2021, was recognized for the sixth time as one of the “Best Places to Work In Collections” by insideARM.com and Best Companies Group. Since 1976, Coast has worked closely with clients to increase recoveries by assisting consumers in resolving their financial obligations. Coast’s success is exemplified by exceptional recoveries, superior service, and dedication to the highest levels of compliance. More information about Coast can be found at www.coastprofessional.com.

The CFPB issued a new report, “Market Snapshot: An Update on Third-Party Debt Collections Tradelines Reporting,” that looks at trends in credit reporting of debt in collections from 2018 to 2022.  It also published a new blog post, “Debt collectors re-evaluate medical debt furnishing in light of data integrity issues,” that looks at factors that create challenges for medical collections reporting.

Report   

The report’s key findings include:

• The total number of collections tradelines on credit reports declined by 33% in 2022, from 261 million tradelines in 2018 to 175 million tradelines.  The share of consumers with a collection tradeline on their credit report decreased by 20% in the same timeframe.  The decline in collections tradelines was driven by fewer reports by contingency-fee-based (non-buyer) debt collectors.  Contingency-fee-based debt collectors reported 38% fewer collections tradelines from Q1 2018 to Q1 2022, while the number of collections reported by the debt buyers increased by 9% over the same period.  The number of unique contingency-fee-based debt collectors also declined by 18% (from 815 to 672).  Medical bills account for 68.9% of furnished collections by contingency-fee-based debt collectors.

• While the diverging trend between contingency-fee-based collectors and debt buyers could indicate an increasing market share for debt buyers in the overall debt collection market, it could also indicate diverging furnishing practices by debt buyers and non-buyer debt collectors, with non-buyer debt collectors becoming less likely to furnish information to consumer reporting agencies while debt buyers maintained or increased their furnishing rates.

• In conversations with the CFPB, debt buyers and non-buyer debt collectors indicated that some collectors have stopped furnishing due to concerns about data integrity and their ability to comply with the Fair Credit Reporting Act, particularly handling disputes.  

• Despite the decline in collections reporting, medical collections tradelines continue to constitute a majority (57%) of all collections on consumer credit reports.  Upcoming changes to medical collections reporting announced by the nationwide consumer reporting agencies will remove small dollar (less than $500) and paid medical collection tradelines from consumer credit reports.  While these changes will reduce the total number of medical collections tradelines, an estimated half of all consumers with medical collections tradelines will still have them on their credit reports, with larger collection amounts (representing a majority of the outstanding dollar amount of medical collections) remaining on credit reports.

Blog post  

The blog post discusses the following key issues relating to medical debt reporting:

[article_ad]

• Debt collectors typically lack timely access to healthcare providers’ billing and payment information.  As a result, debt collectors may be unable to verify whether the medical bills they are collecting on are consistent with healthcare providers’ records or whether the underlying bill is accurate.  A complicating factor is that unpaid balances on medical bills often change as a result of insurance adjustments or financial assistance.

• These structural barriers to accurate billing, collections, and reporting of medical bills contribute to the higher rates at which medical bills are disputed and make it harder and more expensive for debt collectors to accurately furnish medical tradelines, thereby exposing them to greater litigation and compliance risks.  Concerns about potential Fair Debt Collection Practices Act and Fair Credit Reporting Act liability resulting from a lack of data integrity in medical billing “may well have played a role in the significant reduction in the furnishing of medical bills to consumer reporting agencies in recent years.”

In 2022, the CFPB issued three reports on medical debt.  In the new blog post, the CFPB states that it is continuing to closely examine medical billings and collections practice. It also notes that “the Federal Housing Finance Authority, other federal agencies , and the White House, as well as the largest nationwide credit reporting companies and VantageScore all took recent actions to reduce the role of medical debt in determining credit access” but states that “[t]hese changes are important steps, but they won’t solve the structural data integrity issues affecting remaining medical debt tradelines.”  Previous CFPB comments strongly suggested that the agency was headed in the direction of taking steps to block or limit the reporting of medical debt.  While that suggestion is not made again in the new blog post, it seems clear that the CFPB is not satisfied that enough has been done to address “the consumer harms presented by furnishing medical debt information and considering medical debt when determining someone’s credit risk.”

GENESEO, N.Y. — Coast Professional, Inc. (Coast) is pleased to announce the promotion of Mr. William Washburn to Vice President of Operations. As Vice President of Operations, Mr. Washburn will be responsible for managing Coast’s collection departments across all locations and overseeing operational activities of the company in accordance with company policies, goals, and objectives. Mr. Washburn is an experienced leader who will manage the operations of the company’s large collection contracts, including achieving performance targets, identifying areas for process improvement, and team performance.  He will oversee approximately 200 operational staff and five directors. 

Mr. Washburn has worked in the collection industry for 20 years. He began his career in 2003 as a Collector. He quickly demonstrated leadership qualities and was promoted several times, eventually becoming a Senior Collections Manager. Mr. Washburn joined Coast in 2017 as Manager of Operations and advanced to Senior Director of Operations in 2020. 

“Bill is a solution-oriented, ambitious leader with a strong work ethic. His drive to succeed is second to none,” stated Jonathan Prince, Chief Executive Officer. “Bill has proven his ability to manage top-performing, compliant teams, while building strong bonds with staff and clients, and effectively adapting to change. Over his six years with the company, Bill has become an integral member of our executive team. Congratulations, Bill, on this outstanding accomplishment.”

[article_ad]

Mr. Washburn resides in Rushford Lake, NY and enjoys spending his spare time out on the water with his family.

About Coast Professional, Inc.:

Coast Professional, Inc. is a full-service accounts receivable management and contact center company dedicated to respectful and ethical communication with consumers. Coast provides essential call center services to hundreds of clients including federal, state, and county governments; higher education institutions; municipalities; and courts. Coast is an eight-time honoree on the Inc. 5000 list for America’s Fastest-Growing Private Companies provided by Inc. Magazine and in 2021, was recognized for the sixth time as one of the “Best Places to Work In Collections” by insideARM.com and Best Companies Group. Since 1976, Coast has worked closely with clients to increase recoveries by assisting consumers in resolving their financial obligations. Coast’s success is exemplified by exceptional recoveries, superior service, and dedication to the highest levels of compliance. More information about Coast can be found at www.coastprofessional.com.

CHICAGO, Ill. — Markoff Law is a law firm with a
first-class reputation founded on quality services and results. During the
holiday season, the Markoff Law team decided to show its support for the Anti-Cruelty Society located in
Chicago. 

Founded in 1899, The Anti-Cruelty Society is a comprehensive
animal welfare organization whose mission is to build a community of caring by
helping pets and educating people through adoption and clinic programs. 

“Each year around the
holidays, Markoff Law contributes to organizations near and dear to the hearts
of our team members,” says Markoff Law partner Steven Markoff. “This year, one
of those organizations we decided to support was the Anti-Cruelty Society. Many
of us at the firm have pets that come from shelters or rescue centers and this
donation is a small way to give back to the community of volunteers and
professionals that ensure that every pet in every shelter is taken care of
before finding their forever home.” 

The Anti-Cruelty Society

From what started as four compassionate women from Chicago meeting
on January 19, 1899 to discuss Chicago’s forgotten animal population, The
Anti-Cruelty Society has emerged as a society of devoted and caring people
helping animals. In 1904, The Anti-Cruelty Society opened the doors of its
first small animal shelter. The shelter provided refuge and adoption services
for Chicago’s unhoused domestic animal population.

[article_ad]

After 124 years in service to the pet community across the
country, the Anti-Cruelty Society now has programs from pet adoptions to
low-cost spay and neuter services to humane education, cruelty investigations
and rescue. The Anti-Cruelty Society works to raise awareness about the needs
of animals. They provide rehabilitation and treatment, as well as classes and programs
from pet loss to pet first aid, not to mention a free behavior helpline to
provide access to information about pet care. As a community of caring, The
Anti-Cruelty Society promotes responsible pet ownership and works together with
the communities they service to help animals find “peace, comfort, and
happiness.”

A Culture for Change

Markoff Law is a
well-respected creditors’ rights law firm with offices across the Midwest. Our
team is made up of dedicated attorneys and professionals who commit to setting
and achieving the highest standards of excellence. This dedication extends
beyond the office and our clients, as members of our team focus on providing
the same level of attention and service in our communities. 

Donate This Winter

Every gift, every volunteer and foster, and every open heart makes
a difference. The Anti-Cruelty Society has many ways to give back to animals across the country. With ways to give through events,
naming tributes, events, and partnerships, combined with volunteer and foster
opportunities, the Anti-Cruelty Society has over 100 individual ways to give
back. 

About The Anti-Cruelty Society

The Anti-Cruelty
Society has been on the forefront of animal welfare and
humane education since it was founded in 1899. As one of Chicago’s oldest
animal welfare organizations, our history is as large as our hearts. What started
with just a single meeting would grow to be an entire community selflessly
committed to helping pets and educating people.

About Markoff Law

Markoff Law LLC is a forward-thinking
firm with a history of experience and success representing creditors throughout
the Midwest. Established on April 1, 1980, our focus is the practice of
creditors’ rights, debt collection, and enforcement of judgments. Through the
decades, Markoff Law has earned and maintained a reputation for excellence,
honesty, and integrity. Our thought leadership and adherence to industry best
practices have established us as a leader within the accounts receivable
management industry. We firmly commit to setting and achieving the highest
standards of excellence.