Collector - February 2018 - 14
A Win-Win Situation
Tips to help you thrive during tax season.
By Anne Rosso May
ebruary is the kick-off month for
tax season, a busy time for debt
collectors. Many consumers use
their tax refunds to help settle accounts and
pay down debt, making this time of year
full of opportunities for all parties.
The IRS started processing most returns at
the end of January, though some consumers'
returns-such as those with an Earned
Income Tax Credit- won't be processed
until mid-February. According to a survey
conducted by Qualtrics and Credit Karma
Tax, 62 percent of Americans expect to get
a tax refund in 2018, and 24 percent plan to
use that money to pay off debt.
Many debt collection agencies encourage
their collectors to bring up tax refunds
during conversations with consumers. They
may not even be thinking about their refund
yet, or it may not occur to them to use it to
help pay down their debt. Try asking, "Are
you expecting a tax refund this year?" or
"Have you thought about using your tax
refund to pay this?"
Your client might allow you to be more
flexible with settlements at this time. Make
sure you know what types of settlements the
client will allow you to offer the consumer,
and how your agency expects you to
approach this negotiation-not only what
you can offer, but when.
Will the client allow you to offer a
reasonable settlement during the first phone
call, or do you have to wait a certain number
of days after the account is placed with your
agency? Do you have the green light to waive
any fees or interest for the consumer? Don't
offer settlements in an amount greater than
authorized by the client.
If it's permitted, you could try saying to
the consumer, "If you are willing to resolve
this in full with your tax refund, I can see if I
can negotiate the interest."
You must be careful not to use language
that would indicate this is a one-time offer,
which could violate the Fair Debt Collection
Practices Act. Saying "I am able to offer
you..." may be better than saying, "This offer
is only good until..." You also want to make
sure that any language you use does not
overshadow the consumer's validation rights.
Keep in mind that consumers may be
using their refund to pay multiple debts-
it is not limitless. If consumers tell you
they do not have enough tax return funds
for the settlement, you shouldn't indicate
that the deal you suggested will never be
offered again or that it is the lowest offer
consumers will ever get, because your
client may decide at a later date to offer
an even better settlement, or extend the
current offer. You just don't know what
will happen in the future.
Be careful making settlement offers
on debts that are beyond the statute of
limitations as some courts have ruled
such offers could mislead consumers into
believing the debt is judicially enforceable
when it is not.
Overall, you can be a helpful resource to
consumers during this time. If they don't
have any information about their refund
yet, those that have filed can visit the IRS's
website to track their refund status: www.
irs.gov/refunds. Remember, consumers
don't have to use their tax refund to pay
down debt, so keep this in mind during
your collection calls to ensure you're not
Anne Rosso May is editor of Collector
magazine. Special thanks to Irene Hoheusle,
IFCCE, CCCO, vice president of collections
and education at ARSI, for contributing to