CBS Compliance Corner – June

This article is the seventh and final installment of an on-going series on the life of an account as it makes its way through the collection process at Collection Bureau Services, Inc. So far our series has examined: disclosure and validation requirements imposed on third-party collection agencies (such as CBS) under the Fair Debt Collection Practices Act (FDCPA), actions such as phone calls and letters in the first 30 days on accounts with valid addresses and phone numbers, “skip-tracing” or finding information about consumers, negotiations and payment plans, the beginning of the legal process, preparing and serving the legal documents, the continuance of the legal action until a judgment is achieved, and the enforcement mechanisms allowed once the judgment is entered.

Now that funds have been obtained to satisfy the judgment that was entered against the defendant consumer, the matter would appear to be concluded. However there are still important wrap-up items that need to be resolved in order to complete the process. These include:

 Payment to you, the underlying creditor;

 Written documentation to the court;

 In some instances notification to the defendant consumer, and,

 Credit reporting.

Naturally, your interest in the matter is receiving payment! Whether the judgment is paid in one lump sum, or in installments, CBS remits to its clients monthly. We typically cut off near the 25th of the month so we can process and prepare reports and checks by the 1st. Checks and reports are either hand delivered or mailed, and we try to get them into your hands by the 10th of the following month. Consistency is imperative to earning your trust and in this area we emphasize a high level of performance. Of particular note is the fact that since 1976, when CBS was founded, over the course of nearly 500 remittance cycles, CBS has never failed to pay our clients. Surprisingly, not every agency can make the same statement.

At the same time, as plaintiffs in the legal action, we have an obligation to the defendant consumer to notify the court that the matter is resolved. We’ve tried various iterations of this and from experience we’ve come to a procedure that is both timely and efficient. Upon full payment, whether voluntary or through attachments, CBS’ legal department will prepare a satisfaction of judgment and file it with the court. Depending on the jurisdiction, a copy of this may or may not be mailed to the defendant consumer.

Finally, credit reporting. In most cases we report your individual accounts to the “Big 3” credit repositories; Transunion, Equifax and Experian. Each has their own internal requirements, but one thing all three will not allow is for individuals or agencies to report judgments. Instead, they hire independent agents who troll the courts to obtain public record information, including judgments. Since we are not reporting the judgment, only the account, once it is paid all we can report as paid is the account. The satisfaction of judgment must be picked up by the independent agent. In our experience the performance of these agents is inconsistent. This can be problematic for the consumer. If the judgment is picked up, but the satisfaction is not, the consumer’s credit file is impacted. Because the judgment has our name on it the consumer naturally assumes we have placed it on their file. Because we haven’t, we have no ability or control on showing it satisfied. This issue may soon be moot, however. Beginning July 1, 2017, the Big 3 will no longer report civil judgment data if the information does not provide complete identification details regarding the consumer. Given that the judgment documents are public record virtually none of them have the detailed identification information necessary, generally dates of birth or social security numbers. The end result should be the wholesale removal of civil judgments from credit reports after July 1.