Author: Dick Williams, ARS
“A partnership is an arrangement between two or more people to oversee business operations and share its profits and liabilities”. Miriam Webster Dictionary
Does the word “partnership” have a more important meaning today than ever in the world of recovering your past due accounts? In today’s highly regulated environment with HIPAA, HITECH, FDCPA, TCPA, and now REG F the answer is yes. It means that your collection partner needs to be on their toes while protecting you and your consumers while they also understand how to comply with many complex regulations. We all need to perform better in this age of litigation where a hyper technical error becomes very costly. So, our need to communicate within the “partnership” is essential.
We need to understand the capabilities of each other’s systems, data points and internal processes, so as to provide the consumer with the legally required information to properly collect the account. That means understanding the terms “last statement date, charge off date, last payment date, transaction date.” Your collection “partner” must disclose one of these dates in their first letter to the consumer. Once it is decided which of these four choices you will use, then you will disclose the original balance on the itemization date, any fees, charges, interest, credits, payments, refunds or adjustments since the itemization date. As you can see an exact understanding of the consumer’s account and how it got to the balance placed in collections is critical. Timely file transfers with exact details will be necessary if we are to do our job for you and make the partnership work.
As partners we share an equal need to keep each other informed about any changes on the consumer’s account such as payments, insurance recalls, late posting charges, and NSF payments and do so in real time. In addition, mail returns and or disputes must be shared promptly to avoid consumer complaints. It must become a priority for both partners and not just an inconvenience where daily is the rule and weekly or monthly is not good enough. Remember here the goal from the CFPB is to inform the consumer and reduce confusion for the consumer, that is why using an itemization date should be familiar to the consumer.
Since our partnership is designed to collect your accounts it is also designed to prevent consumer litigation if we fail to provide the EXACT information required by the CFPB. That means we keep both your business and ours out of court and from incurring expensive litigation. Courts have held creditors liable under vicarious liability in other collection actions, so our partnership is essential for both our organizations and their wellbeing.
The requirements of Reg F go in effect on 11/30/2021, so work with your collection agency and build a partnership which is strong and that provides the necessary information to benefit both organizations. A partnership in actual daily practice and not just a word just in theory.
November 12th, 2021