CBS Compliance Corner – December

This article is the second in an on-going series on the life of an account as it makes its way through the collection process at Collection Bureau Services, Inc.

In the first instalment of this series (November, 2016 Headlines) we discussed the disclosure and validation requirements imposed on third-party collection agencies (such as CBS) under the Fair Debt Collection Practices Act (FDCPA). After providing these to the consumer, CBS then begins the active collection process.

That’s not to say that the procedures are fast and furious. One of the disclosures mentioned above gives consumers a period of 30 days to dispute the debt. If they do so in that time-frame, CBS is required to investigate the consumer’s dispute and report the results to the consumer before continuing collection. Some consumer’s attorneys will pursue legal actions against collection agencies that they perceive as acting too aggressively in their collection attempts during this 30-day period. As an internal rule, CBS doesn’t credit report accounts for 30 days after listing in order to give consumers an opportunity to resolve the matter first. Other considerations include IRS 501 (c)(3) rules and dispute resolution procedures under the Fair Credit Reporting Act (FCRA) (separate and distinct from the FDCPA dispute process).

All of these items cause CBS’ policy in the first 30 days after an account is listed for collection to be more on the cautious side. Of course, the first notice from a collection agency is a sign to the consumer that the matter has escalated and that alone often prompts the consumer to call or pay.

Our next step with any single account depends on many factors specific to the account itself. For instance, all CBS mailings to consumers are sent in such a fashion so that the US Postal Service will return undeliverable or address correction mail back to CBS. In the case of a new address, the information is entered into our system and the whole “first notice, 30 day period” starts anew.

On the other hand, accounts with good phone numbers are now sent to our experienced team of collection agents who will manually dial consumers and attempt to engage them in a productive conversation about resolving the account. In and of itself, this discussion can take many paths. Obviously the most straightforward, and the one we try to achieve, is full payment. For reasons that are fairly obvious (the account is in collections, after all) this doesn’t always occur. Our collector will then try to make the most expeditious arrangement possible, given the consumer’s particular circumstances. Generally, this sort of payment arrangement is how most monies come to our office on your accounts.

Note, however, that “resolution” of the account doesn’t always result in payment. Occasionally the information obtained by our folks results in the account being returned to the client for any number of reasons; error in listing, incorrect consumer, the account was paid before being sent to CBS…the situations are innumerable. This is where having collectors with the experience level of CBS’ are invaluable, both to CBS and to our customers.

Next month: What about all those accounts with no phone numbers and those with incorrect addresses?