The CFPB Cancels 8,000-Debtor Collection Survey

The CFPB Cancels 8,000-Debtor Collection Survey
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CFPB Rules Delayed...Again

bottom line 12 18 2Changes continue at the CFPB. The latest is the cancellation of an 8,000-consumer survey that was to help the CFPB establish concrete rules for accounts receivable professionals. Find out more about this further delay of CFPB rules in this week's Bottom Line. See more at

The CFPB Cancels 8,000-Debtor Collection Survey

The CFPB rulemaking on debt collection has been further delayed. The delay comes from the CFPB formally canceling its request for approval of a survey on consumer understanding of debt collection disclosures.

It appears Bureau leadership decided to reconsider what it called Debt Collection Quantitative Disclosure Testing based on Acting Director Mick Mulvaney’s announcement last month to freeze all pending regulatory action. In August, the American Bankers Association opposed the CFPB’s request because the CFPB had sought to test materials and disclosures not made available for public comment, as required by the Paperwork Reduction Act.

The CFPB intended to use the survey to learn more about the burden collecting information inflicts on consumers, as well as the validity of the methods used including the use of automated collection techniques. The survey was considered to be the next step in developing the long-anticipated debt collection rules which have now been delayed over two years.

Leading Collectors Provide Telecom Compliance Insights

ciskey debra jThe compliance world changed somewhat for telecommunications providers in the Spring of 2015 when the CFPB announced consent agreements with two of the largest wireless providers related to their billing practices, among other things. Two years later, the compliance discussions are ongoing within compliance departments at the telcos, and with their collection agency vendors. To gather material for this article, I had discussions about the direction of compliance concerns with three collection agency compliance heads, and I am indebted to them for providing their insights.

What changes have you seen related to compliance concerns of telecommunications clients?

Telecom clients seemed to be lagging behind financial services companies and student loan servicers related to concerns about the impact of the Consumer Financial Protection Bureau on their attempts to recover balances owed by their customers. They informally sought information on compliance issues debt collectors were facing but weren’t seeking it to consider making internal changes, but to understand the challenges their vendors were facing. However, in the past 12 months, their interest has increased, getting closer to the level of concern demonstrated by clients in the financial services sector, primarily due to the CFPB’s revelations related to debt collection related rules for credit grantors.

When their interest started ramping up, it seemed like the telecom world wasn’t really sure what they needed to do, so they started with the easiest approach and started or increased their monitoring of phone calls. They wanted to hear what was happening between their collection agencies and their customers before taking the deeper dive. They have since hired compliance experts to help them understand the broader issues and have a more organized approach to understanding the compliance initiatives of their debt collection business partners.

What compliance issues have telecommunications clients asked about?

Specific issues they have been concerned about include convenience fees, collection fees and TCPA/prior express consent and dialing platforms. Credit reporting takes an even higher priority, especially as the CFPB has demonstrated its interest in this broad aspect of doing business. Because telecom accounts get moved frequently from agency to agency, and because of anticipation of rules and requirements from the CFPB and state regulators, handling verbal disputes is a frequent topic of discussion. The telecoms seem to want to be out in front of the issue. Best practices discussions include topics around reasonable investigation of disputes, and several of the big providers have streamlined their process to provide necessary validation to agencies faster.

Other best practice discussions relate to cease communication notification to the original creditor from the consumer, and disputes, especially related to accounts furnished to credit reporting. Like most creditors, they have historically limited outside access to their internal systems to the minimum access possible; however, some have been considering providing wider access to assist with dispute resolution real time. The downside of this move could be the allocation of resources, i.e., the cost to conduct investigations of disputes would move from the creditor to the agency. There seems to be frequent discussion of the risk and cost compared to the reward related to credit reporting. The bottom line is telecoms continue to furnish data, or require their collection agencies to do so.

A tricky subject for telecom providers is out of statute debt. Generally, telecom agreements are handled as verbal contracts. Payments revive the debt in some states on verbal contracts, but not in others. Tracking gets complicated in the world of small balances and high volumes of accounts. The revival issue combined with the differences in disclosure requirements by states has caused one agency I spoke with to implement 27 distinct disclosures related to out of statute debt, with business rules associated with using them.

What predictions can you make about the compliance picture in the telecom world in the near future?

I asked my sources for their predictions – what does the future of compliance in telecommunications collections look like? They expect more detailed and more frequent audits, and have seen this develop recently. Their routine annual client audits now include more elements related to compliance, like dispute policies, Standard Operating Procedures, TCPA compliance, and collection letters. Formerly, audits were mostly related to collection performance and tracking payments from customers. Some clients have started requiring their agencies to provide monthly complaint logs and dispute volumes, rather than looking at the data only when conducting annual audits, as they had done previously. Telecom clients are starting to include compliance related items in their QA evaluations and scorecards and working compliance considerations into bonuses for their agencies. Trust but verify seems to be the model.

I heard cautious optimism about the impact of the CFPB’s first party rules. This should change the compliance environment and make it easier for third party agencies, because of the requirements that could be placed on first party entities.

Mergers and acquisitions in the world of the large carriers will be interesting from a compliance perspective, primarily because they each have their own ideas about compliance. While they may share philosophies related to compliance, they all have different ways of doing things at different levels. For example, the intensity of background checks required for collection agency personnel, clean room requirements, and quality assurance/ compliance scorecards vary widely from provider to provider.

My thanks to Jason Davis, Senior Vice President of Compliance at ERC BPO, Michelle Dove, Esq., General Counsel/ Chief Compliance Officer, I.C. System, Inc., and Alicia McKeighan, Chief Compliance Officer at Afni, Inc., for the insights they so generously shared with me for this article.

Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.

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 nov dec 2017



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