The Daily Digest is sponsored by TCN, a leading provider of cloud-based call center technology for enterprises, contact centers, BPOs, and collection agencies worldwide.
EXPERTS SHARE ADVICE FOR DEALING WITH SPIKE OF PRE-LITIGATION DEMAND LETTERS (WEBINAR RECORDING AVAILABLE)
- Pre-litigation demand letters have become a “scourge” on the industry, with lawyers sending as many as 10 demand letters for every lawsuit they file against a collection agency, according to a panel of industry experts who spoke during a webinar held yesterday. Lawyers are using demand letters like “spaghetti,” throwing as many as possible against the wall, hoping that collection agencies will settle rather than run the risk of having a lawsuit against them. But the industry must stand up for itself or run the risk of backing itself into a corner and only seeing the number of letters continue to increase, said the panelists during the webinar, which was sponsored by WebRecon.
COMPENSATION, INCLUDING FOR COLLECTORS, IN CROSSHAIRS OF REGULATORS, LEGISLATORS
- The Consumer Financial Protection Bureau has issued a compliance alert, advising caution when using financial incentives that are tied to production goals. The bulletin is yet another action in the wake of a scandal at Wells Fargo, where employees were creating credit card and other accounts in the name of customers without their knowledge to achieve sales targets. The CFPB ultimately fined Wells Fargo $185 million. Meanwhile, the 16 Democrats on the House Education Committee have sent a letter to the Secretary of Education, urging the Department to alter how collection agencies working on student loan accounts are compensated. Collection agencies receive $1,710 for each student loan that is rehabilitated and 20% of payments made by individuals while they are in rehabilitation. But the compensation structure “does not take into account whether borrowers default after they rehabilitate their loans. Moreover, collectors are paid significantly less for defaulted borrowers who choose to consolidate their loans instead of choosing to rehabilitate their debt.”
CFPB MOVES FORWARD WITH PLAN TO INCLUDE RATINGS FOR COMPLAINT HANDLING
- The Consumer Financial Protection Bureau is moving forward with its plan to include a consumer survey at the completion of the complaint-filing process. The intention of the survey is to provide consumers with three questions about how the company handled the response to the complaint, to rate the overall response on a scale of one to five stars, and provide a narrative explanation in support of the rating
BILL BARTMANN PASSES AWAY
- Bill Bartmann, the founder of Commercial Financial Services, which was once one of the largest collection agencies in the country — employing 3,900 people — passed away during heart surgery yesterday afternoon. He was 68. The collection agency collapsed in 1999 and Bartmann was charged with conspiracy and fraud, charges that he eventually was cleared of. In 2010, he launched Commercial Financial Services II.
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The Daily Digest is sponsored by TCN, a leading provider of cloud-based call center technology for enterprises, contact centers, BPOs, and collection agencies worldwide.
