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CollectTECH19 Brings Together the Brightest Minds in Technology

  • Written by Receivables Advisor

The convergence of the top collection professionals in accounts receivable with the top technology providers happens November 18-20 at CollectTECH19 in Ft. Worth, Texas. Several technological innovations will be introduced. With new rules for voice, text and email ready for 2020 collection professionals are pondering when it will be the primary process for collections. Citibank and others have forecast up to 50% in banking staff reduction in five years due to the fourth industrial revolution (4IR).

4IR refers to how technologies like artificial intelligence, autonomous vehicles and the internet of things are merging with our physical lives in the form of voice-activated assistants, facial ID recognition and digital health-care sensors.

4IR is also called the post-digital era which is confusing because Digital Assistants like Alexa and Siri are still evolving.

Just like Artificial Intelligence is a broad term to describe the more specific benefits of machine learning, CollectTECH19 comes along to make practical the over-generalized predictions which will make 2020 a pivotal year to re-invent collections.

For example, CollectTECH19 predicts text and email will become the primary methods for collecting past due debts with-in five years.

Helping to distill what will be transitional technology and what will be more reliable the CollectTECH19 speaker line up continues to expand.

eswarmaoorthy gandhiTwo new additions to the presenter lineup are K (Gandhi) Eswaramoorthy, CFPB Program Manager for Debt Collections and LaDonna Bohling, Chief Compliance Officer of Contract Callers.

Prior to joining the CFPB, Eswaramoorthy was Senior Director of Collections and Recovery Policy and Strategy at Citi Cards. Prior to Citi, Gandhi spent several years at Barclays Card, Chase Card Services and American Express. Collectively, he has more than 25 years of experience working in all aspects of credit card risk management including risk modeling, account management, collections and recovery policy and strategy.

bohling ladonnaBohling has managed call center operations for over 20 years and was recently named ACA International’s 2019 Certified Instructor of the Year.

Bohling was named one of the 25 Most Influential Women in Collections by Collection Advisor magazine in 2016 and Who’s Who in Compliance by Collection Advisor magazine in 2018. Bohling will be joining John H. Bedard, Jr. to discuss how the latest innovations in speech analytics improve revenue and compliance.

New Regulation Leads to Wave of Innovation

  • Written by Receivables Advisor

Innovation is the theme for CollectTECH19 energized by the ascent of Valor Intelligent Processing’s Gordon Beck and his ability to build an agency with the latest technology. Collections will experience disruption over the next five years characterized by a jolt in 2020 implementing email, text, voicemail and call limitations.

On the eve of updated regulation for accounts receivable, the industry is teeming with innovation to improve ROI. Here is a glimpse at some of the innovation CollectTECH19 attendees will see firsthand in November.

Go to CollectTECH19.com to see all the vendors ready to connect, teach and innovate.

santa maria toddTodd Santa Maria
VoApps

“On a technical level, VoApps DirectDrop Voicemail is innovative because it is a very lightweight, cloud-based, web application,” said Todd Santa Maria, VP, Client Services at VoApps. “We can make updates and changes quickly, responding to the needs of the client base. Client feedback drives our development, and most new features we add start as a client need that we solve. We are constantly looking for the next change to the landscape and preparing multiple feature options to be able to react to the regulatory environment and keep our clients as safe as possible.

rao vivekVivek Rao
Solutions by Text

“Solutions by Text is a global cloudnative SMS platform that can deliver text messages to any mobile device in any country in any language,” said Vivek Rao, Senior Vice President, Products of Solutions by Text. “The platform was built from the ground-up with compliance as the foundation. The system complies with the TCPA (US), HIPAA (US) and CASL (Canada). It is a consent-based model where the receiver is required to consent to receive text messages. Consent is recorded and Solutions by Text serves as the system of record.”

fite robertRob Fite
Telrock

“Telrock’s SaaS based enterprise-wide collection and recovery software platform is the most complete solution available via the cloud,” said Rob Fite, Vice President, Business Development and Marketing. “Below are some of the capabilities that are offered with our more modern technology: realtime processing, embedded digital channel messaging and consumer self-directed collection portal, omnichannel collection contact management, dynamic rules driven “smart” collector workbench, extensible database schema, end-user graphical workflow visualization, on-demand component deployment (Easily expose existing / new capabilities when you want them), centralized collection rules / strategy management engine, real-time reporting, and supports AI.”

pasch travisTravis Pasch
Accelerated Data Systems

“We have developed our own app store to increase the speed of delivery and decrease the cost of development,” said Travis Pasch, Sales Director of Accelerated Data Systems. “The system comes standard with over 200 apps prebuilt. These apps can also be developed by your own IT staff. Nearly every field in AdvantEdge is customizable or configurable allowing the software to mold to your business rules.”

poladi ranjithRanjith Poladi
HighRadius

“The Integrated Receivables platform provides solutions for credit, collections, deductions, cash application, electronic billing, and payment processing – covering the entire gamut from credit-to-cash,” said Ranjith Poladi, Senior Digital Transformation Consultant of HighRadius. “HighRadius Integrated Receivables leverages Rivana Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes. The Integrated Receivables platform also enables suppliers to digitally connect with buyers via the radiusOnenetwork, closing the loop from the supplier Accounts Receivable process to the buyer Accounts Payable process.”

kaster stephanieStephanie Kaster
CompuMail

“At CompuMail, we continually invest substantial capital, time and resources in highperformance software, technology and equipment to optimize our communication platform,” said Stephanie Kaster, EVP and Chief Sales Officer of CompuMail. “The fastest growing method today is combined Print and Email delivery with response tracking. We currently offer three different email methods to meet different objectives, all of which are secure and compliant and follow industry best practices. Our optical reader tracking and reporting technology, coupled with our real-time on-line ticketing system keeps our clients engaged and informed 24/7 and also enables them to provide superior service to the clients they serve.”

kropac christianChristian Kropac, Jr.
PCI Group

“PCI Group is a transactional direct mail provider,” said Christian Kropac, Jr., President/Co-owner of PCI Group. “We implemented the most advanced production process for critical communications in the world in July, 2015. Known as the White Paper Factory, this production process marries fully digitally composed files with in-line full color inkjet print production and intelligent insertion to deliver ultrasecure, highly accurate, variable datagenerated personalized communications. TrakPCI is our online, real-time account management system. Tied directly to our workflow production systems, TrakPCI provides customers 24/7/365 access to our workflow from the time they transfer data to us to the time their communications are mailed to the consumer’s mailbox.”

barthold keithKeith Barthhold
DKBinnovative

“DKBinnovative takes a company’s IT and cybersecurity, enhances their capabilities, and measures their impact,” said Keith Barthhold, CEO of DKBinnovative. “The result: fewer issues that compromise productivity, enhanced business owner performance visibility, the right infrastructure/vendor blend, and the appropriate tooling for maximized collection efficiency. “With this pragmatic approach, we provide what ARM clients need and break down the walls that crush IT productivity and maximized cybersecurity, enabling companies to use them as a more measurable and profitable differentiator for their clients.”

byrne carolCarol Byrne
FICO

“FICO has rearchitected our collection solutions so that we now offer an integrated ecosystem, incorporating our powerful FICO Debt Manager along with two-way omni-channel communications and powerful analytics capabilities,” said Carol Byrne, Senior Director, Product Management at FICO. “FICO had a reputation for having the most functional solution, but it wasn’t affordable to smaller banks and credit unions. By rearchitecting our solutions to streamline integration and leveraging the Cloud, we can offer our ecosystem at a much more affordable cost, with faster and simpler implementation.”

beck gordon2Gordon C. Beck III
Valor Intelligent Processing

“Valor has embraced the era of technology and is taking full advantage of it,” said Gordon C. Beck III, President and COO of Valor Intelligent Processing. “Through omni-channel communication capabilities such as consumer facing apps, chat bots and text messaging, we are not going into this timid and are willing to blaze a trail that helps encourage everyone to jump into this amazing landscape of opportunity.”

roberts chrisChris J. Roberts
Sentinel Development Solutions

“There are three things that I would point out as being representative of the innovation of eCollections, Sentinel’s collection platform: 1. Multi-channel communication support, eCollections has many features which integrate email and texting into your business practices with capabilities like automated email and text campaigns to support things like payment reminders and self-service payment portals,” said Chris J. Roberts, President and COO of Sentinel Development Solutions. “2. Advanced automation, eCollections enables the creation of automated processes for virtually everything within the platform. 3. Built-in extensibility, a software architecture and framework that enables rapid extensibility (enhancements to the software) that do not limit future upgrades.”

stewart erinErin Stewart
Interactions

“The Interactions Virtual Agent has proven success across the complete debt lifecycle,” said Erin Stewart, Sales Director of Interactions. “Unlike traditional self-service applications, Interactions uses Conversational AI and ML combined with real-time, human-assisted understanding to engage in conversations with human-like accuracy. The improved accuracy, combined with unparalleled dialogue design, ensures effective talkoffs and scripts are used every time to increase customer experience and payment conversions, while significantly reducing agent minutes in your call center.”

smith eliEli L. Smith
Payment Savvy

“As a leading ARM payment processor, Payment Savvy always has our finger on the pulse of the latest technological innovations,” said Eli L. Smith, Chief Operating Officer of Payment Savvy. “Our Fee-Free Payments program has an open API, allowing us to seamlessly integrate with all of the leading collection software platforms. This solution not only allows for payments via the traditional collection methods - phone and web - but also progressive technologies such as IVR and Pay-by-Text. As always, our payment models are custom-built to create the perfect solution for an agency.

Top Attorneys in Collections Reveal Challenges

  • Written by Collection Advisor

Change is in the air for the accounts receivable industry. Any changes start with the creation or modification of a law regulating the industry and trickle all the way down to how best to reconcile a single transaction between a buyer and a seller. A good attorney is one that works to influence the entire process, encouraging fair and effective ways of settling open accounts.

Collection Advisor presents the Top Attorneys in Collections. These attorneys have been nominated by their peers for efforts to improve collections through legal collections, creditor defense and legal consultation. These Top Attorneys reveal what they think is the biggest challenge for collection attorneys today and how they overcome it.

bedard johnJohn H. Bedard Jr. Bedard Law Group, P.C.

Laws and rules relating to the collection industry are changing at a rapid pace. All attorneys in the ARM space are challenged to keep up with changes in case law, regulatory activity, and legislative movement. Our office overcomes these challenges by remaining active in the industry, reading industry publications, new cases, rules, and laws, and addressing the needs of clients personally and professionally.

 

burnette lauren2Lauren M. Burnette Messer Strickler, LTD.

I think one of the biggest challenges collection attorneys face is the misconception held by too many people unfamiliar with our industry – that collecting debts through litigation is somehow not “real” litigation. Too much bad press has left this impression on too many people. I try every day to change that narrative through litigation and education.

 

coleman june2June D. Coleman Carlson & Messer, LLP

One of the biggest challenges that face attorneys is being over-regulated by state and federal governmental agencies when attorneys need to have independence to ethically and professionally represent their clients.This is even more true since attorneys are already subject to regulation by their state bars.I address this issue by working with groups like ACA and its state units to educate legislators that an attorney’s ethical obligations to his or her client cannot be regulated by consumer protection agencies or consumer attorneys.

 

grzechnik neill katieKatie Grzechnik Neill ARS National Services

The biggest challenge for attorneys in the collections industry today, especially for those defending agencies against FDCPA claims, is dealing with the hyper-technical, pie in the sky claims that plaintiffs’ counsel come up with. It’s especially frustrating when the suit is filed by a consumer who never had any real harm done to them by the use of a single word or phrase in the letter sent to them, yet courts continue to find that such consumers have standing to bring these claims. Defending such claims is expensive for agencies and the attorneys’ fees provision of the FDCPA provides no relief to agencies even if they win the lawsuit. Because of this, many agencies settle, which essentially turns into money in the plaintiffs’ counsel’s pockets. This emboldens plaintiffs’ counsel to continue the cycle since there is very little downside to them except for a loss of time. My dream is for the industry to become more proactive in these issues and to find a way to fix this disparity, which is ultimately harming consumers.

 

jackman stefanie hStephanie H. Jackman Ballard Spahr LLP

Managing all the operational, legal, and compliance requirements in today’s legal collection environment. For many of my clients, investments in automation, new technology, and experienced talent has proven essential to compete in a costeffective and compliant manner. It also is important to have strong vendor relationships to assist with efficiently outsourcing certain areas of legal compliance.

 

jackson joyJoy N. Jackson J.D. Faber & Brand, LLC

The biggest challenge for collection attorneys today and in the past has been combating our negative public image. I believe this can be overcome by acting with the highest degree of integrity, treating others with respect, and pushing ourselves to be involved in positive ways in our communities, whether it be in politics, academia, charity, etc.

 

klutho michael1Michael A. Klutho Bassford Remele

My practice is focused on defending collection attorneys and agencies when named in lawsuits brought by consumers. While our firm, Bassford Remele, does not collect consumer debts per se, our defense practice has provided a unique window into the many challenges collection professionals encounter when attempting to collect consumer accounts. In particular, a significant number of lawyers and law firms have chosen to exclusively sue collection professionals, including collection attorneys. “Kitchen sink” counterclaims (alleging very tenuous claims, at best) following service of a collection lawsuit have become a common tactic employed to avoid paying debts.This in turn forces the collection attorney to spend valuable time responding to the counterclaim/roadblock rather than securing a judgment on behalf of the creditor client. Given this potential reality, whenever possible it is best to develop a truly robust relationship with your creditor client whereby detailed procedures and channels of communication are established to streamline the production of the evidence and proof necessary to defeat the counterclaim, and successfully prosecute the collection lawsuit. Forethought in this regard is far superior to an after-the-fact, ad hoc, response when the inevitable counterclaim arises.

 

miller ronaldRonald C. Miller Miller and Steeno, P.C.

The biggest challenge for collection attorneys are frivolous lawsuits filed under the guise of protecting consumers when it appears that the vast majority of these lawsuits are filed only to line the pockets of consumer attorneys. Collection attorneys need to be very diligent in maintaining robust attorney meaningful review procedures to reduce the amount of errors being committed. Additionally, they need to adopt policies and procedures for every aspect of their collection practice to afford them the opportunity of claiming a bono fide error as a defense in the event a lawsuit or counterclaim is filed under the Fair Debt Collection Practices Act.

 

moore harvey1Harvey M. Moore, Esq. The Moore Law Group

I view the biggest challenge for collection attorneys today as finding systematic approaches to making workflow efficient, so that we can meet client expectations while satisfying state and federal requirements in an ever changing legal collections environment. At The Moore Law Group, we seek to have well documented processes with defined ownership and accountability, establish measureable targets and continuously create and evaluate reporting that looks back at the past and anticipates the future. In that way, we seek to keep track of what we are doing and how we can be better.

 

newburger manuel1Manuel H. (Manny) Newburger Barron & Newburger, P.C.

We have seen a great deal of painfully expensive TCPA litigation against creditors and debt collectors in the last few years. Recent case law suggests that creditors need to do a better job of building out consent to call cell phones, and both first and third-party operations need to build better dialing models.

Litigation involving credit reporting practices is also high-risk and costly to defend. ARM professionals need to be certain that they have solid compliance with statutory and regulatory requirements and that their training reaches every employee who has the capacity to trigger an FCRA claim.

 

rossman johnJohn Rossman Moss & Barnett

The biggest challenge facing collection attorneys is the constant changes in the laws and requirements for complying with the FDCPA. I am on the steering committee of the Consumer Relations Consortium, a group of more than 30 collection agencies, debt buyers and creditors that meet regularly with the regulators in Washington D.C., including the CFPB and FCC, to implement common sense rules and requirements for our industry.

 

schulz davidDavid M. Schultz Hinshaw & Culbertson LLP

I approach this question from the perspective of a defense attorney who represents collection attorneys in litigation and compliance matters. The biggest challenge that I see for collection attorneys is their ability to keep up with the FDCPA case law. For instance, how to apply the safe harbor language in Miller v. McCalla (or Avila in the 2ndCirc). Related to this is the increase in FDCPA suits against collection lawyers for conduct that occurred in collection lawsuits.

 

spiwak lisaLisa E. Spiwak Esq. Spiwak & Iezza, LLP

Laws and rules relating to the collection industry are changing at a rapid pace. All attorneys in the ARM space are challenged to keep up with changes in case law, regulatory activity, and legislative movement. Our office overcomes these challenges by remaining active in the industry, reading industry publications, new cases, rules, and laws, and addressing the needs of clients personally and professionally.

 

wade louisLouis J. (Lou) Wade McDowell Rice Smith & Buchanan P.C.

Laws and rules relating to the collection industry are changing at a rapid pace. All attorneys in the ARM space are challenged to keep up with changes in case law, regulatory activity, and legislative movement. Our office overcomes these challenges by remaining active in the industry, reading industry publications, new cases, rules, and laws, and addressing the needs of clients personally and professionally.

Project Management: Asking the Right Questions

  • Written by Jon Balon

balon jonSummer is in full swing! The kids are out of school and we all have one thing on our minds…vacation! Where should we go? What should we do? What’s our budget? The list goes on and on. No matter the type of vacation, we all go through these questions when planning our memorable summer family experience away from home.

While we plan this vacation, let’s keep that big project at work front and center too. Is tackling that project really all that different from planning this summer’s family adventure? In reality, the two are more similar than different. That being said, let’s tackle both at once. After all, they both require time, attention, dedication, focus and, most importantly, a plan of action that allows you to break things down into bite-size pieces.

Know the Right Questions to Ask

Where is it that we want to go? This is likely the easiest question to answer and each question from here will get a little trickier as we progress through our planning. After some deliberation, we decide we are headed to the beach in South Carolina for our 2019 family vacation. When thinking about the work project, be it emailing consumers, texting consumers, or offering text to pay functionality, your objective is your starting point.

Now that we’ve designated the beach in South Carolina as our vacation destination, what’s next? Let’s start building on our high-level objective.

 VACATION WORK PROJECT
 Beach Vacation in South Carolina  High Level Planning
 When do you want to go?  When do we want to start
this project?
 Who is going to go?  Who is going to be involved
in the project?
 What sites do we want to see
while we are there?
 Projects can’t go on forever,
what time can we allocate
to this project?
 What is our budget for our trip?  How much are we willing
to spend on this effort?
 How do we maximize our
entertainment budget?
 What is our return on investment?
 While in SC, what do we want
to do?
 What features do we want
to offer our clients?

Our high-level planning is taking us to Charleston, SC for one week and our big adventure will be scuba diving for the first time. Your project should have a similar high-level vision statement. However, based on this statement we aren’t quite ready to get started.

One Week in Charleston
to Scuba Dive
Detailed Level Planning
Where do we want to stay? How do we want to incorporate
this into our current processes?
How are we going to get there? Are we going to build this?
Do we need to buy something?
Should we involve clients?
What do we need to pack? What all do we need
to get started?
What is involved
in scuba diving?
We have never done this,
do we need training, do we need
a partner to help us, do we need
to hire team members with
a skill we don’t have?

 In our vacation planning, we have a major unknown: scuba diving. It looks awesome when watching Shark Week on TV and friends rave about how cool it is, but we have no clue what we are doing. Many of the projects that you want to take on may evoke similar feelings. We have never done this before, now what? In this case, conducting research is the best way to determine what all is involved. With resources like Google and Yelp, it is easier than ever to maximize our experience, by partnering with an expert. How do we pick the right partner? Here are a couple things to keep in mind during the selection process:

Select Scuba Diving Guide Choosing a Partner
How long have they been diving? What is the partners experience
with the type of project we are
undertaking?
Where will we be diving? What
will we see? What should we
bring?
What are the project details,
project deliverables, and what is
expected of us during the project?
How long is a dive? How long will this project take?
How much training is needed for
us to dive?
What do we need to do before
the project starts to be properly
prepared?
How much does the dive cost and
what is included?
What is the cost and what are the
deliverables?
How much is it if we want to keep
diving?
What if we want to add features
and extend the project, what will
that cost?

In terms of our vacation planning, we seem to be in a good spot. We have our travel plans ready, our hotel is booked, we have started our scuba dive training, and are excited for our family vacation to begin. Your big work project is shaping up nicely, you have your partner and your start date is set.

Vacation day is here, the family is excited and the kids can’t wait to get to the beach. We have all been there, it’s going to be a great trip, let’s go! However, we all know this is just the beginning.

Vacation Time Project Starts
Traffic? Team member gets pulled off
the project for a critical
production issue.
Kids get hungry, that’s not
in the budget.
Oh, we need that feature
and it was not planned.
Hotel was overbooked. Software being used is not
updated and needs updated
before starting.
Weather isn’t looking good
to scuba dive.
Our partner resource’s spouse
went into labor, they are no
longer available.

 Life happens no matter how far in advance or well we plan. When beginning planning efforts, don’t be afraid to tackle the “what ifs” early in the process. This helps better prepare you for any unexpected surprises that arise along to the way.

It is scuba dive day or, in the project world, go-live day! We have been on a wild ride thus far! We were three hours late getting checked into our hotel, one child forgot to reapply sunscreen and is experiencing sunburn for the first time, we are operating on two hours of sleep from the night before… but it’s scuba dive day, so let’s go!

We arrive at the dock, get on the boat, and are off to scuba dive an awesome shipwreck. What can go wrong? Will I get seasick? What if I see a shark? What if the boat leaves me? Remember, the risks of doing anything for the first time, are bound to be racing through your head, especially the day you go live. This is normal in life and can be countered with careful planning, trust in your team and a little bit of luck doesn’t hurt.

The boat stops, anchor is down, and we are scuba diving. It is an awesome experience, the family is having a blast, the weather is perfect, and the sights are unbelievable. This is the moment you step back and say, “it was all worth it.” Whether it’s a crazy first-time adventure or a project that you completed, do not forget to celebrate that moment. You deserve it!

The vacation has come to an end, and although it’s time to make our way home, we have created new memories that we will carry with us forever. In the project world, we have launched and now it’s back to business as usual…until our next “vacation.”

Conquering Procrastination

We all go on vacation, we all have adventures in life. Why are we so reluctant to start that project we have been talking about for months? We go through all the same steps, preparing for family vacation, but we seem to forget those same steps when we are planning that project. During our vacation we are bound to face unknowns, have emotional ups and downs, face challenges, and contemplate risks versus reward. These are all the same things we will face throughout the life of a project. When we step back and think about the completed project, we recognize we worked hard to get there. You set an objective, dove deep into the details, rallied the team, executed the plan. It feels good to see the fruits of your labor, especially when they create positive outcomes for the clients that you serve.

So that project you haven’t moved forward with, stop putting it off. Treat it just like you would that cruise to the Bahamas and let’s go on vacation!

I would love to see and hear from you during CollectTECH19, where I will be discussing the topic of virtual collections - what it is, and how we get started.


Jon Balon is currently the Vice President of Product & Innovation at Williams & Fudge, Inc. Established in 1986, Williams & Fudge, Inc. manages student loan receivables for more than 1,400 colleges and universities across the globe. Headquartered in the Knowledge Park District of Rock Hill, South Carolina, Williams & Fudge is family-owned and operated and is committed to contributing to the advancement of the communities in which they serve.

 

Is Credit Bureau Reporting a Viable Tool for Healthcare Debt?

  • Written by Gordon C. Beck III

beck gordonCredit bureau reporting continues to be a tool of recovery within the ARM industry that is the subject of much debate. With the growing demand from clients across the country for the agencies to handle all aspects of their credit reporting it has become vital for agencies to know, understand and execute their processes, without error, because the consequences of the alternative can be devastating. The financial burden on the agency, the open liability and the potential for regulatory consent orders makes credit reporting a frightening proposition. On the other end of that equation, there are indeed positives. Credit reporting continues to be an effective means of recovery by boosting contacts from consumers who otherwise may not have intent to communicate with the collection agency, but the negative collection tradeline commands their attention. I have conducted many studies and, in almost every instance, internal testing has proven that reporting does increase liquidation versus the alternative. I have received feedback from multiple large agencies who have conducted similar tests and have found similar results.

The process of credit bureau reporting is defined and standard for almost every type of debt…and then there’s medical. Which begs the question, if given the opportunity to choose, should you or should you not report your medical debt to the credit reporting agencies?

As mentioned above, I think it is fair to say that the operational view would be that it boosts contacts and recoveries, while the compliance perspective would be that it encourages disputes and therefore carries the risk of litigation. Regardless of the departmental perspective, it appears that many agencies have settled into reporting delinquent debts through the credit reporting agencies. The conversation becomes more muddied when discussing the type of debts being reported. Credit cards, installment loans and others receive little discussion as those accounts have previously been reported in a “current” status, follows a timeline of declination and, when severely delinquent, reports on an individual’s credit as a charge-off by the original creditor. The frustration for consumers appears to stem from the type of accounts, such as medical, where positive history is never reported, but as soon as delinquency appears, they are adversely impacted and thus seems unfair to many consumers. The question has even been asked as to whether or not medical debt should be considered an extension of credit in the first place or is it just a “bill” and, therefore, even be able to be reported?

With all of these considerations, along comes an outlier with medical debt. We have all experienced the frustrations of non-approved medical claims, incorrect medical coding, billing for procedures that may have never taken place, disagreements about deductibles, unauthorized procedures and on and on. The consumer’s frustrations generally result in dispute after dispute. When the dispute is received, the agency has the responsibility to conduct a reasonable investigation, but with medical debt the definition of reasonable can be very broad and result in furnishers settling dispute lawsuits, impacting the organization’s bottom line.

The frustrations resulting from incorrect reporting have piqued the interest of the legislators and regulators. The previous practice was that hospitals, doctor’s offices and many other types of medical debt owed would not be reported by the “first party” owner of the debt and would only be added to the bureau as a collection by the agency. Based on the common billing problems mentioned previously, it was determined that it was unfair for consumers to not have a voice in the review of the medical bill for which they were judged to owe. In 2016, all three major credit reporting agencies implemented a rule that would not release the reporting to the consumer’s bureau for 180 days after the first reporting. There is no doubt that this was put into play to stem the overwhelming tide of disputes, complaints and lawsuits levied against the credit reporting agencies and, by default, the collection agencies. Many of these decisions were the result of the 2015 settlement agreement between the New York Attorney General with all three credit reporting agencies. It is important to note, however, that these rules were not retroactive.

The latest development in the world of healthcare reporting is the introduction of the FICO 9 score, ultimately deeming medical debt less impactful to the consumer’s overall score while completely removing any medical debt that has been paid. This development has proven huge to the recovery of medical debt as it provides positive leverage for the debt collector while bolstering the incentive for the consumer to pay the outstanding debt. While the debate will rage on as to whether or not reporting medical debt produces greater recovery opportunities or just manufactures disputes/lawsuits, it is certainly clear that if the agencies are given the right negotiating tools such as leveraging the removal of the debt for payment, it can and will be a drastic change in course for those that have decided not to report. Yes, the challenge will continue as to whether or not the consumer owes the debt in the first place, but with the pressure on the providers to provide accurate data to the bureaus and less errors reaching the agency, I think it is a fair assessment to conclude that with the proper internal investment, rock solid procedures and a solid collection strategy it will be very hard to compete with those agencies that determine reporting medical debt will be an arrow in their operational quiver.


Gordon C. Beck III has been in the collection industry for over 20 years and President of Valor Intelligent Processing.