Collector - September 2016 - (Page 38)

COMPLIANCE Know the Score Are you misrepresenting the effect payments may have on a consumer report? By Anne Rosso May E very day, collectors talk to a wide variety of consumers, working to educate them on their accounts, deescalate tense situations and negotiate payments, all while overcoming stalls and objections. But in helping consumers understand why it's important to pay their debt, collectors must be careful not to misrepresent the effect payments may have on their credit report, credit score or overall creditworthiness. The Consumer Financial Protection Bureau weighed in on this issue in a 2013 bulletin, noting that in its supervisory examinations and enforcement investigations, it has observed creditors, debt buyers and third-party debt collectors making statements about the impact payments may have on credit reports and scores; it has concerns that such statements may be deceptive. Both the Fair Debt Collection Practices Act and the DoddFrank Act prohibit debt collectors from engaging in deception while collecting or attempting to collect consumer debts. The CFPB's bulletin provides examples of potentially deceptive claims, such as when collectors tell consumers that paying debts will improve their creditworthiness. "The nature and extent of the impact of a payment on a particular debt in collection to a prospective borrower's creditworthiness may depend on all of the information potential lenders consider and how they weigh that information, factors that debt owners or third-party debt collectors often will not know," the bulletin notes. Collectors working with federal student loans should also be mindful of how they market the benefits of loan rehabilitation. THE KNOWLEDGE GAP 51% Consumers who believe having accounts with high balances will help their credit score if the accounts are paid on time. 48% Consumers who believe an increase in income automatically improves their credit score. 78% Consumers who don't know that closing an older, paidoff credit card hurts their credit score. SOURCES: BANKRATE, TRANSUNION, NERDWALLET 38 ACAINTERNATIONAL.ORG http://www.ACAINTERNATIONAL.ORG

Table of Contents for the Digital Edition of Collector - September 2016

Industry News
Best Practices
Collection Tips
5 Ways to Get Electronic Payments Right
Making the Connection
Curious About Amicus Curiae?
Honor Roll
Small Talk
Know the Score
What Creditors Need to Know About the TCPA
ACA Industry Advancement Support Helps Secure Victory for Collection Industry in FDCPA Case
ACA SearchPoint
Last Word

Collector - September 2016