Collector - April 2021 - 29

" Agencies have been sued for stating
information and then being accused of
giving legal advice, so we discourage staff
from providing any details that could be
considered legal, " Quinn said. " If we get
questions about how we're able to charge
interest, for example, we can provide the
regulation permitting that so they can
look it up on their own. We want to avoid
getting caught in bait calls, so we're very
conservative about the details we provide. "
Discussing specific effects that consumer
actions will have on their credit reports and
credit scores can also create liabilities.
" When we get questions about getting
something taken off a credit file, we direct
them to the credit bureaus, " Frank said.
" We explain that we're a data furnisher and
we furnish this information but that any
questions about their credit file need to
be answered by the credit bureaus, and we
provide contact information. "
KLS collectors discuss credit reports only
in hypothetical terms.
" We would never say to a consumer that
if you take a specific action, it will definitely
have a specific result on their credit score,
but we can share hypothetical information, "
Stone said. " Hypothetically, what we've
seen as a result of someone buying a car is
that their scores may increase. However, it
really varies depending on each individual's
situation because so many factors feed into
that number. That discussion doesn't harm
the consumer or the agency. It gives us more
credibility with the consumer. "
Ultimately, agencies need to evaluate their
appetite for risk, consult with their attorneys
about which conversations are appropriate
and determine how to respond to questions
that may be problematic.

THE PAYOFF
Educating consumers can be beneficial
for the individuals, the agency and their
clients alike.
Consumers who understand how to
manage their finances and make better
choices are less likely to get into debt
problems in the future and will know how to
handle them more effectively if they do.

COLLECTOR 04.21

" The success stories are very rewarding, "
Frank said. " We helped a teacher who was
hospitalized during a 30-day insurance
lapse between jobs. She was $300,000
in debt and didn't know what to do.
We helped her look at her income and
expenses and showed her ways to decrease
her cable TV and cellphone plans. We
provided alternate shopping options and
ways to increase her income. Putting
these things into action, she realized she
could pay off her debt and not have to file
bankruptcy. We showed her how to avoid
the situation by helping her with a plan,
when everyone else had been telling her
she should file for bankruptcy. "
Agencies build a rapport with
consumers, which pays off not only in
the form of immediate solutions, but also
long-term relationships that come into
play when future debts arise. Getting a
consumer to prioritize your bills above
others is always a win.
" We've had consumers who received a
bill from first-party clients call a previous
collection representative because they have
a relationship and remember it was a good
experience, " Stone said. " We're not going
to stop repeat offenders, but we've laid the
groundwork to open up communication
because they've had good interactions with
us in the past. "
Creditors benefit when agencies educate
consumers. They get resolution of past-due
accounts and their agency-the face of their
company during that transaction-acts as a
resource for resolving the problem.
Some may consider it unusual that a
company in the business of collecting debt
would want to help consumers increase their
knowledge to avoid future debt. However,
even with a significant improvement in
financial literacy, consumer debt is unlikely
to fade away any time soon. Collectors are
well positioned to offer helpful information,
providing an added service on behalf of
clients to consumers and, ultimately, helping
to resolve the accounts at hand.
Tim Dressen is a communications consultant
and former editor of Collector magazine. 

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1

Consumers often lack
quality information about
managing their finances.

2

Collectors are well
positioned to serve as
an educational resource.

3

Members can refer
consumers to ACA's
soon-to-launch financial
literacy website: Know My Debt
(www.knowmydebt.com).
29


http://www.knowmydebt.com

Collector - April 2021

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