A trade group representing regulators of collection agencies has issued guidance, offering a roadmap to help state and federal agencies figure out what they should and should not allow when it comes to the topic of consumer and commercial debt collections, including allowing agencies to stay in contact with individuals during the coronavirus pandemic.
The North American Collection Agency Regulatory Association (NACARA) is instructing individuals with unpaid consumer or commercial debts to proactively contact collection agencies if they are concerned about their ability to make payments. “While many people and businesses may find this difficult, keep in mind that a collection agency can’t offer help without communication,” NACARA said.
NACARA also offered guidance to states, “strongly” encouraging regulators to offer guidance to collection agencies if they have not already done so. To help, NACARA included a few ideas of its own, including:
- A prohibition on the storage of records relating to collection agency activities at the remote work location
- A requirement that the records created as part of collecting a claim are being entered remotely into an electronic system housed at a licensed location
- A requirement that no payments on a claim are received at the remote work location
Collection agencies, meanwhile, “should take reasonable steps in an attempt to offer assistance to all consumers and commercial debtors who have suffered a loss of income due to this emergency or have otherwise experienced impacts that could affect their ability to repay their debts,” NACARA advised. It laid out a number of steps that agencies can undertake, including:
- Forgoing the reporting of payment information during the health emergency, or modify the reporting of payment information to credit reporting agencies in a manner that minimizes the impact of delinquent payment on credit histories
- Offering modifications, forbearances, or other options to allow consumers and commercial debtors to reduce and/or defer payments;
- Ensuring customers are provided options to make timely inquiries, manage their accounts, and make payments, even if there is a reduction in the collection agency’s staff
- Reaching out to customers proactively to provide information on available assistance
- Ensuring that all customer-facing staff are fully informed regarding any assistance available and are proactive in informing customers of such
