The debt collections industry is increasingly regulated. Collectors have the task of representing many different people and must ensure that all actions are compliant.
One important area of compliance is consumer communication. Collectors have to be trained on how to avoid violating the 30-day validation period when the communicate with the consumer.
It's important to remember that most creditors require agencies to complete a series of scrubs and mail the initial letter upon placement. Once complete, you can begin making calls. Collectors are also no longer incentivized to collect the debt no matter how it's done. They must collect the bill and do so in a way that does not harm the consumer by misrepresenting their clients' intentions or stating the ways that nonpayment could affect the consumer.
Here are 4 important steps for collectors to remain compliant during communication:
- Ask the consumer to pay within the first thirty days. A debt collector cannot demand consumer pay in a shorter time frame without risking an FDCPA violation.
- Identify consumer, creditor, yourself, and the company you are calling from.
- Provide the required mini-Miranda and two party consent disclosures
- Attempt to collect the debt by asking the consumer if they can pay in full, settle or work out a payment arrangement.
Be cautious after step 4, because that is where the majority of potential UDAAP violations can occur.
In the past, collectors would attempt to motivate the consumer by explaining how paying would improve their financial situation. They would talk consumers out of settlements because balances paid in full look better on the consumers' credit report. These tactics could mislead or deceive the consumer – and that is exactly what regulators prohibit.
The collections industry is one of the most regulated, and continual training for those who are directly communicating with consumers is imperative.
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