Collector - May 2020 - 22

GRAPPLING WITH:
A ROBO-DISPUTE BLITZ

reporting agencies, said that while CDIA
may release additional commentary
about coding questions, the group is not
anticipating adding any new pandemic
codes to the Metro 2 format, a process that
typically takes several years.
"A lot of companies are facing challenges
about what they want to do with the AW
code," Phan said. (The AW code is for
all 'natural and declared disasters,' not
just COVID-19.) "Some companies are
contemplating using that AW code on all
accounts right now. However, it also may
make sense according to your own internal
business practices to place that AW code
only if someone asserts a claim that he/
she is experiencing a financial hardship
related to the coronavirus. Again, and this
is up to you and your internal business
practices, you may want to limit that AW
code to only those instances in which you
are extending some sort of accommodation
like a forbearance or deferral."
She encouraged companies to reach
out to their representatives at each of the
consumer reporting agencies they work
with to discuss what coding makes the
most sense.

Consumer disputes-how they're tracked,
processed and responded to-present some
of the biggest challenges for ARM companies.
In addition to the many legitimate consumer
disputes debt collection agencies receive, they
are also faced with a flood of robo-disputes
sent by credit repair organizations (CROs)
and consumer law firms.
"I was at an industry conference recently
where someone reported that these robodisputes account for 40% of their disputes,"
Anthony said.
Under the FCRA, data furnishers are
required to investigate when a dispute is
received directly from a consumer. When
a dispute letter is received from a law firm
or CRO, they have no such obligation. But
when these dispute letters are "signed"
by a consumer, furnishers are sometimes
unable to definitively confirm where they
originated-or they must invest a lot of time
and resources to find out.
This is a disservice to consumers, ACA
members report, many of whom do not
dispute the debt and are in fact willing to
resolve the debt to improve their credit.

Agency owners have told ACA that they've
had consumers call in to discuss payment
on their debt only to be told that they are
disputing the debt or have retained counsel-
both of which are a surprise to the consumer.
The result is that debt collectors must
spend enormous amounts of time and
resources to process these bulk disputes.
"For most disputes, you are required to
make a reasonable investigation and the
timeframe is typically 30 days at most,"
Anthony said. "If I gave you one dispute, you
could handle that easily. If I gave you 1,000,
could you conduct investigations on each
within that timeframe? A lot of credit repair
organizations are getting consumers' credit
reports and disputing everything. It's no
wonder debt collectors feel overwhelmed."
ACA members have suggested that the
FCRA should be amended to allow disputes
made through CRAs to be categorized as
frivolous or repetitive, like those made
directly to the data furnisher.
In addition, ACA believes that while data
furnishers have no duty to reinvestigate
frivolous disputes, they should also have no
duty to respond to them. This would greatly
reduce the resources expended on these

10-Year Lookback: FCRA Litigation Trends
5,000

4,937

4,500
4,343

LAWSUITS

4,000
3,500

3,656

3,000

4,533

3,825

2,500
2,000
1,939

1,500
1,000

2,234

2,371

2,470

1,362

500
0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

SOURCE: WEBRECON

22

ACAINTERNATIONAL.ORG


http://www.ACAINTERNATIONAL.ORG

Collector - May 2020

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