Today there are numerous laws, regulations and conflicting court decisions that impact the Debt Collection and Asset Recovery industry. Many of these rules and regulations are simply outdated, confusing and drastically need reform.
Having worked in this industry for the more than 20 years, it is my experience that the vast majority of Asset Recovery business owners do their absolute best to follow the governing rules and regulations. Unfortunately, since several current regulations are in direct conflict with each other, the agency is stuck with a very hard decision. They must choose which rule or regulation they will follow, and as a result, choose to break the conflicting rule.
The Fair Debt Collection Practices Act (FDCPA) was enacted as a Federal statute in 1978, and the Telephone Consumer Protection Act (TCPA) was passed by Congress in 1991. Since these Acts are generally viewed by Congress as an attempt to protect consumers, politicians are reluctant to modify them for fear of being labeled “anti-consumer.” Consequently, these Acts remain relatively untouched by amendments. This has contributed to the Acts being outdated with regards to current communication methods and has created confusion in the industry.
The TCPA places restrictions on the use of automated dialing systems and prerecorded voice messages being delivered to cell phones. In 1991 the cell phone industry was still emerging and industry pricing models were drastically different than they are today. According to a recent report from the Pew Research Center, “Generations and their Gadgets,” 51% of today’s young adults age 25 – 29 ONLY have cell phone service (no landlines), and 90% of ALL American adults live in a household with at least one active cell phone. Clearly, the TCPA Act should be modified to remove this restriction. Cell phones are obviously a major mode of communication, and it is outdated to place restrictions on their use.
The FDCPA in many regards is also antiquated and confusing. In recent years the creation of technologies not even dreamed of in 1978 (broadcast messaging as an example), has made it more difficult to match the Act’s original intent with the evolving debt collection industry. I’m encouraged that the FCC recently held discussions with our industry in an attempt to better understand new technologies and collection tools. On the surface, it appears that the FCC is willing to make an attempt to align the FDCPA with modern technologies.
Operating an asset recovery business today can be daunting. But don’t let this confusing environment paralyze your business activity. Carefully understand your client requirements and define your business processes to meet their needs. Consult with industry technology vendors so you understand how their tools can help you comply with regulations. Then, review your plan with a competent attorney that understands our industry and modern evolving technologies. These steps can help you gain confidence to operate your agency in this highly regulated industry.
I encourage you to get involved with local and national asset recovery associations. Assist them in educating our politicians so they understand the importance of our industry and the need to freely permit the use of new communication tools.
This article was written by Dave R