Current Events Impacting the Debt Collection Industry
The White House and the Consumer Financial Protection Bureau, or CFPB, have been making news lately for proposed changes and proposed rules that will likely have an impact on the debt collection industry.
The CFPB The Consumer Financial Protection Bureau has been very open about the fact that one of the agency's priorities is to put rules into place that would allow the supervision of debt collectors and consumer reporting agencies under its nonbank supervision program. The Consumer Financial Protection Bureau has noted that the debt collection industry does "create economic and social value" but can be a source of abuse based on complaints received by the FTC and other agencies. It is also true that the credit and collection industry is already highly regulated on state and federal levels, so it is not clear how this new tier of supervision by the CFPB will effect the industry.
Specifically, the Consumer Financial Protection Bureau has proposed a rule to include debt collectors and consumer reporting agencies under its nonbank supervision program. The CFPB said this would mark the first time these important and far-reaching consumer financial market participants are subject to federal supervision. Based on the criteria of "debt collectors with more than $10 million in annual receipts," it was stated the CFPB estimates that the proposed rule would cover approximately 175 debt collection firms ? or 4 percent of debt collection firms.
The White House For the second time this year, the White House proposed changes to allow using automatic dialing systems and prerecorded voice messages to contact wireless phones for the collection of debt. ACA, the leading trade association for the collection industry, responded by saying that they have long advocated for similar modifications to the Telephone Consumer Protection Act, or TCPA, to better facilitate the collection of unpaid debt, and is pleased that the White House has recognized the same need for modernization. Recent statistics show a definite trend toward American households dropping land lines and becoming "wireless only" households, so it is a logical progression to adapt to this trend.
We, at National Recovery Services will continue to follow any new information regarding wireless communications and the Telephone Consumer Protection Act, especially in regards to changes in third party debt collection.
National Recovery Services is a licensed and bonded third party collection agency specializing in commercial, medical, bank card, telecom, utilities, and consumer loan debt. We always stay abreast of legal and ethical issues in our effort to be a compliant debt collection agency with best practices in mind at all times.
National Recovery Services Wishes You a Happy Valentine's Day
Listed: February 13, 2012
"The best and most beautiful things in the world cannot be seen or even touched. They must be felt with the heart." -Helen Keller
One common belief about Valentine's Day is that it is mainly shared among couples. Actually, it appears that Valentine's Day has transformed over the years into a day about love and telling those around us we love them; whether it is a parent, sibling, child, teacher, or even a pet! Here are some interesting factoids about Valentine's Day.
Approximately 141 million Valentine's Day cards are exchanged annually, making Valentine's Day the second most popular card-sending holiday after Christmas.
The first commercial Valentine's Day greeting cards produced in the U.S. were created in the 1840s by Esther A. Howland. Howland, known as the Mother of the Valentine, made elaborate creations with real lace, ribbons and colorful pictures known as "scrap."
Research reveals that more than half of the U.S. population celebrates Valentine's Day by purchasing a greeting card, and more than half of shoppers spend more than $3 for a Valentine?s Day card.
Consumers over the past few years have spent nearly $650 million annually on Valentine?s Day gifts of flowers, candy, wine, eating out, and jewelry.
Candy comes in second next to cards in popularity for Valentine?s Day. Chocolate is the favorite. Men prefer to give or receive dark chocolate. Women favor milk chocolate.
Around three percent of pet owners give Valentine?s Day gifts to their companion animals.
Approximately 85 percent of all valentines are purchased by women.
We, at National Recovery Services, hope your Valentine's Day is a special one!
Seems unlikely, doesn't it? Debtors' prison is generally held as a concept utilized in the Middle Ages, but non-existent in today's society. Recently, there are some judges worried that the jump in debt-related arrest warrants is creating a modern-day version of debtors' prison. And some law enforcement officials are finding it troublesome to have to utilize valuable time and resources on debt-related arrests, rather than pursuing violent criminals.
Debtors' prison is described as "prison for those who are unable to pay debt." In the United States, the use of debtors' prisons was widespread prior to 1833 when the U.S. abolished Federal imprisonment for unpaid debts. Most states outlawed the practice around the same time. Historically, it was said that imprisonment could result from less than sixty cents' worth of debt.
Most state constitutions have clauses dating to the 1850s that expressly prohibit the jailing of people for their debts. Some people make the claim that it is unconstitutional in the United States to incarcerate someone solely for failing to pay a debt, however, there is little settled law or legal analysis on this matter.
An article in the Wall Street Journal claimed that more than a third of U.S. states allow borrowers to be jailed for non payment of debts. It was reported that judges may issue a warrant when a borrower either misses court ordered payments or doesn't show up in court after being sued for payments on outstanding debt. However, it is contended that because of ?sloppy, incomplete or even false documentation,? many borrowers facing jail time don?t even know they?re being sued by creditors. Though there are no national statistics on the practice of jailing debtors, a WSJ analysis found that judges have issued more than 5,000 debt-related warrants since the beginning of 2010.
Some states are addressing debtors' prisons through legislative action. For example, in March of 2011, Washington state's House of Representatives passed by a 98-0 vote a bill that would require companies to provide proof a borrower has been notified about lawsuits against them before a judge could issue an arrest warrant. Also, in Florida, judges attended a training session to specifically address potential abuses of debt-related warrants. It should also be noted that upstanding creditors and debt collection agenices have policies in place to protect consumers' rights.
Laws vary on federal, state and even local levels regarding debt-related warrants or custody. The existence of modern day debtors' prison is a controversial and complex issue with many differing views and sides.
National Recovery Services is a licensed and bonded third party collection agency committed to using compassionate and compliant debt collection strategies. By staying abreast of legal and ethical issues related to the debt collection industry as a whole, we are able to continue being a compliant and compassionate debt collection agency with best practices in mind at all times.
NATIONAL RECOVERY SERVICES HELPS MAKE A POSITIVE IMPACT
Listed: February 03, 2012
A New Survey Shows Third Party Debt Collection Has a Positive Impact on the Economy
Previously, this blog addressed how both business and consumers benefit from third party debt collection agencies. It was noted that in a past study, PricewaterhouseCoopers found that in one year, U.S. businesses charged off $152 billion in debt losses. Third-party collection agencies returned $40.4 billion to these companies and the U.S. economy. Additionally, at least 43 states employed third party debt collection to recover taxpayer dollars.
In Fall 2011, ACA International commissioned global advisory firm Ernst & Young to conduct a survey to measure the annual impacts of third-party debt collection on the national and state economies. The results showed a positive economic impact, a finding that does not come as a surprise to the multitudes of hard-working third party debt collection agencies. Besides the significant effects on our nation's economic health, third party debt collectors also contribute to local communities and the society as a whole through philanthropic endeavors and as civic leaders, employers, volunteers and taxpayers.
ACA International noted that recovery of consumer debt by third-party debt collectors on behalf of America?s public, private and non-profit sectors has significant effects on our nation?s economic health by allowing organizations to survive by being able to pay their bills and cover their payrolls. Additionally, recovering consumer debts helps prevent layoffs, keeps credit, goods and services available, and reduces the need for tax increases to cover government budget shortfalls.
Some specific findings from the Ernst & Young survey included: Returning assets gross amount recovered was $54.9 Billion; 148,272 direct jobs were provided; Direct payroll was $5 Billion.
In regard to charitable contributions, debt collection agencies gave back $85.2 Million and contributed 652,300 volunteer hours.
National Recovery Services is a licensed and bonded third party collection agency committed to best collection agency practices. We have every confidence that our services benefit business and consumers alike by providing compassionate, compliant, and competitive debt collection strategies. National Recovery Services participates in philanthropic activities that benefit our local community and the community at large. It is refreshing to see information about the third party debt collection industry that better depicts the positive impact it has to the economy and society.
NRS Stays Abreast of National News Regarding the Debt Collection Industry
A recent court case in Illinois brought up the "wireless debate" issue, which begs the question: Should debt collectors be allowed to contact debtors on their wireless devices?
Some consumer attorneys are filing Telephone Consumer Protection Act (TCPA) claims alleging a debt collector lacks consent to collect medical debt even if the consumer gave the medical provider his/her cell phone number because of Health Insurance Portability and Accountability Act (HIPAA) privacy restrictions.
In Mitchem v. Illinois Collection Serv., Inc., the U.S. District Court for the Northern District of Illinois ruled that the consumer consented to receiving a call on his cell phone by giving his number to a medical provider, and HIPAA did not render that consent ineffective.
The consumer attorney argued that in the context of medical debts, HIPAA made ineffective any consent that would otherwise arise by providing his cell phone number to the medical provider because protected health information, such as a cell phone number, cannot be disclosed under HIPAA.
It was reported the court disagreed, reasoning HIPAA allows medical providers to release PHI without a consumer?s consent for payment purposes. The court also found that because a cell phone number is ?reasonably necessary? for a debt collector to obtain payment of a medical debt, a provider may disclose a cell phone number to a collector under HIPAA.
This court case has the potential to be persuasive in other court cases, which is important for debt collection specialists like NRS because recent statistics show a trend toward American households dropping their land lines and becoming ?wireless only? households.
National Recovery Services will continue to follow any new information regarding wireless communications and the Telephone Consumer Protection Act, especially in regards to changes in third party debt collection.
National Recovery Services is a licensed and bonded third party collection agency specializing in commercial, medical, bank card, telecom, utilities, and consumer loan debt. We will continue to stay abreast of legal and ethical issues in our effort to be a compliant debt collection agency with best practices in mind at all times.
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