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What Every Collection Agency Should Know About The CARD Act

July 18, 2010 · Collection Agencies, Credit, Credit Cards · (No comments)

A Complete Step-by-Step Guide To Successful In House Debt Collection

On February 22nd, 2010, the Credit Card Accountability, Responsibility and Disclosure (CARD) Act took effect. The CARD Act had one major purpose: to attempt to put a curb on credit card practices and set limits to the fees that credit card companies charge consumers. It was created with consumers in mind, setting limits to the amount of credit that will be available to them in this recession “for their own good.”

Due to the life changing CARD Act, a number of financial institutions have modified their business models by reducing potential risk to cardholders. They have dropped or restricted some borrowers with a poor financial history, tightened up credit lines, and are marketing less. Analysts predict credit limit reductions to have two main impacts for the collection industry.

One impact of the CARD Act has been the restriction of the average size of accounts that are placed for collection. This, coupled with consumer behavior these past few years, where people in general spent savings and maxed out personal loans and home equity, raises concern and eyebrows, because for many debtors, credit cards are the only short term credit that is available to them at this moment.

Another giant impact of the CARD Act is a result of the provision that consumers are not able to pay off one credit card debt using a different card. While this may help debtors to be more fiscally responsible, this obviously has massive ramifications for the collection industry. Experts and leaders in the field hypothesize that the best way to deal with the enormous changes that have ensued is to remain flexible and to be creative. In addition to the same old telephone calls and collections letters, the internet can be seen as a good option for payment.

Experts also remind us of a few ideas that we, as collection professionals should keep in mind about the CARD Act. Extra payments must go to pay off the accounts with highest interest balances first. The CARD Act also gives consumers the ability to set their own credit limits that might be less than those set by the creditors, and marketing credit to college students and giving credit card access to people under twenty one will now be severely restricted.

Mallory Megan works for Rapid Recovery Solution and writes articles on national collection agencies.

A reference book for every business owner who is dealing with slow, non-paying customers, would like to improve their in house debt collection, and increase cash flow.

Debt Collectors

July 16, 2010 · Business, Collection Agencies, Credit, Credit Cards, Credit Score, Debt, Debt Management · (No comments)

The Do-It-Yourself Bailout

Debt collection is a booming business in tight times. Millions of Americans are just weeks away from bankruptcy, trying to make ends meet. Now, debt collectors have new tactics to try to get what they’re owed. And some of those tactics are skeptical.

Beth Givens, a privacy expert with Privacy Rights Clearinghouse, said she sees it as a growing problem. Debt collectors have begun telephoning other family members, friends, even neighbors, trying to locate debtors. Expect mail, emails, even voice mails and texts.

Givens wants people to know they do have rights, and that some of the new tactics may be illegal. “If you are in debt, know that there is a federal law that puts limits on the kinds of communications that debt collectors can have and it pays to really be informed,” Givens advised.

Debt collectors can use references on credit applications and other paperwork to find people you know. You may have used them as references to secure loans or credit. Collectors can ask them where YOU are. But they don’t have to give that information up. And they should know, collectors are not allowed to ask your friends to pay the debt for you.”A collection situation is never easy for a consumer to deal with,” advised Ken Paterson, who is with the Credit Advisory Service.

Paterson said people should also know their own loan companies may act as collectors. That certainly was a shock for Laura Wynn, whose car loan company called her sister.”My sister called me very upset and said that somebody had called and wanted to know if she knew what kind of person I was and the lack of integrity that I held,” she said.

If you do feel harassed, you can file a complaint with the Federal Trade Commission. Beth Givens said she expects collections to boom. “In this time of economic downturn, debt collection is a growth industry, so I think that we’re going to be hearing more complaints about debt collectors.” Your best bet– don’t dodge the debt collector’s call. If they can reach you, they’re less likely to start calling family and friends.

Mallory Megan works for Rapid Recovery Solution and writes articles on third party collection agencies.

The Do-It-Yourself Bailout

When A Bill Collector Is On The Phone, A Methodical Approach Is Best

July 16, 2010 · Collection Agencies, Credit, Credit Cards, Credit Score, Debit Cards, Debt, Debt Management, Debt Negotiation · (No comments)

Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation

If a collections agent is on the line, your immediate reaction might be to ignore the phone calls. Seems easier to do things that way right? But if you owe debt to a creditor, collection agencies are allowed to contact credit bureaus and report the debt, file lawsuits against you, and should be taken very seriously. Rather than ignore the phone calls, take them head on with a methodical approach. Your first step is to determine why you are being called. Find out where the debt comes from and exactly how much you owe.

While you have your collections agent on the phone, ask for their name, the name of the agency, the name of the creditor, the agency’s address, and their fax number. Keep in mind that you have the right to tell a debt collector that you want all future contact to be in writing over the phone, but follow up all requests you make with a written request.

One important thing to remember is that if you request that the collection agent doesn’t contact you at all, the debt collection agency has the right to contact you one more time to let you know how it plans to take further action. If you have issues with personal privacy, you can also request that you be the only person who can be contacted. A good idea is to start a file with details and dates of phone conversations and records of when you mail out letters.

If you do mail any letters or checks to the debt collection company do this by Certified Mail, Return Receipt Requested. This way you will be certain that the letter reached the collector because you will receive a signed receipt as proof. If you are able to negotiate a re-payment plan over the phone, request the terms of the plan be sent to you in writing. Any offer that a debt collector makes to remove or adjust credit history should also be documented.

Be certain that you are paying the right people. Payments are usually made to the agency, not the creditor, unless you are otherwise instructed to do so. Glance over the amount that they are asking you to pay carefully, and get an assessment of any interest, fees or charges that have been added on. By taking this methodical approach, you will feel more empowered and ready to tackle your financial issues.

Mallory Megan works for Rapid Recovery Solution and writes articles on credit collection agencies.