Collection Advisor March/April 2018 by Receivables Advisor

WHO’S WHO IN COMPLIANCE 2018

ENGAGED COLLECTORS INSTEAD OF DIALER ZOMBIES CYBERTRACKING USING EMAIL & WEBSITES COLLECTION LETTER CASES GONE WILD COLLECTION TIPS PULL-OUT CALENDAR REASONS TO DIVERSIFY INTO NEW MARKETS PARENTS HELPING CHILDREN WITH STUDENT LOAN DEBT AND MORE

Vol. 18, No. 2

PAY ATTENTION TO INCOMING AND OUTGOING MAIL

March/April 2018

11 STRATEGIES TO IMPROVE THE SCIENCE OF SKIP TRACING CFPB RULES DELAYED…AGAIN PRSRT STD US POSTAGE PAID COLLECTION ADVISOR

March/April 2018

COLLECTION TIPS FOR A/R PROS

Collection Advisor P.O. Box 92342 Southlake, TX 76092

Vol. 18, No. 2

PREVENT WASTE FROM THE BEGINNING WITH SKIP TRACING

COLLECTION EDUCATION EXAM

BATCH OR MANUAL SKIP TRACING FOR YOU?

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Setup a demo today! info@CollectOne.com 888.816.3333

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Sam Eidson

Fred N. Blitt

8 Ron Brown 10

Nick Jarman

16 Debra J. Ciskey 18

Harry A. Strausser III

THIS ISSUE MADE POSSIBLE BY: CDS Software ............................. Inside Front Cover Melissa Data .............................................Back Cover IDI, Inc. ................................................................. Page 3 CSS IMPACT ....................................................... Page 5 VeriFacts ............................................................. Page 7 DAKCS .................................................................. Page 9 Cornerstone Support ................................. Page 11 Sentinel Development Solutions Inc. ..Page 28 Simplicity Collection Software ...........Page 28 Collect! ...............................................................Page 28

SKIP TRACING ISSUE

e m o c l e W “

ho should I model my compliance philosophy after” you might ask? This issue of Collection Advisor features such a group of individuals. The Who’s Who in Collections is an assembly of professionals who not only exemplify the compliance ideal for an accounts receivable organization in 2018, they are actively working to influence the industry and regulating entities to improve the economy for decades to come. Check out those worth mentioning on page 20 and prepare to walk away enlightened. This issue also has a focus on skip tracing. The top minds in the field weigh in on the most helpful locations for up-to-date information and how best to use them to find your skip. Agency Advisor Sam Eidson reminisces on experiences he has had with different types of collectors and his recommendations for each. Legal Collection Advisor Fred N. Blitt explains why you must take special notice of your incoming and outgoing mail. Skip Tracing Advisor Ron Brown reveals how you can retrieve a skip’s IP address and use it to locate them. Collection Industry Advisor Nick Jarman describes the differences in batch versus manual skip tracing so you may determine a tactic that works for you. Benchmark Advisor Harry A. Strausser III explains the pros and cons of diversifying your account portfolio with various types of verticals. Compliance Advisor Debra J. Ciskey cites several cases in which letters caused lawsuits and explains the pitfalls that led to such missteps. Next issue Collection Advisor will cover government collections and what you need to know to work such accounts effectively in 2018. We will also talk to industry experts about small office (1-100 seats) collection software. Until next time, we look forward to hearing from you.

Joshua F luegel

Editor-in-Chief

josh@collectionadvisor.com

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March/April 2018

CollectionAdvisor.com ACCESS ONLINE

USING TECHNOLOGY TO EMPOWER COLLECTIONS March/April 2018

Volume 18, No. 2

ADVISORS

AGENCY ADVISOR

Engaged Collectors Instead of Dialer Zombies Sam Eidson

FEATURES

11 13

11 Strategies to Improve the Science of Skip Tracing JASON HORSLEY

THE BOTTOM LINE Video Services CFPB Rules Delayed…Again Parents Helping Children with Student Loan Debt and More

LEGAL COLLECTION ADVISOR Pay Attention to Incoming and Outgoing Mail! Fred N. Blitt

SKIP TRACING ADVISOR

Cybertracking Using Email & Websites Ron Brown

T. STEEL ROSE AND JOSHUA FLUEGEL

Collection Education for A/R Professionals

COLLECTION INDUSTRY ADVISOR Batch or Manual Skip Tracing for You? Nick Jarman

COMPLIANCE ADVISOR

BENCHMARK ADVISOR

Reasons to Diversify into New Markets Harry A. Strausser III

Competition or Collaboration? The Truth About ARM Trade Organizations GORDON BECK

Top A/R Pros Drive Compliance and Production

Prevent Waste From the Beginning with Skip Tracing

23 26

Collection Letter Cases Gone Wild Debra J. Ciskey

14 17

Collection Tips Pull-Out Calendar

WHO’S WHO IN COMPLIANCE 2018

JOSHUA FLUEGEL

Collection Tips for A/R Pros Collection Advisor Buyers Guide

DEPARTMENTS

1 7

Welcome Collection Industry Top Product Nominees

March/April 2018

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Engaged Collectors Instead of Dialer Zombies

Managing a collection floor certainly has its highs and lows. It’s always been a, “what have you done for me lately,” kind of business. Whether your agency had a strong or weak per perfformance ormance last month, one thing you can count on is it will all sstart tart over next month. Collection floors typically consist of a wide variety of age groups, backgrounds, personalities and education levels. Throughout the years I’ve had the opportunity to manage many hard working professional debt collectors mixed with my fair share of the attendance-challenged, prima donnas, conspiracy theorists and those who aren’t happy unless there’s drama. Creating the right culture and having the ability to manage personalities can make the difference between a cohesive collection floor versus one that is dysfunctional. The collector role doesn’t require a degree and in most states collectors don’t have to be licensed making it difficult to find career-orientated business professionals. Most candidates didn’t learn specific skills such as time management, prioritization and multi-tasking like those who attended college. When hiring, there are positives and negatives to candidates with or without experience. Sometimes those with experience can be set in their ways making it difficult to coach and teach them your way of doing business. While experienced collectors tend to come with bad habits they also understand how to collect a debt. The other negative could be their inability to collect compliantly given our industries regulatory landscape. I prefer hiring collectors with little to no experience because it’s easier to teach them our way of doing business. However, there can be negatives to this strategy. For example, our society has created a sense of entitlement for the younger generation and the need for instant gratification. Years ago we didn’t have to run contests in order to motivate collectors. Their bonus check was motivation enough. Now it seems like collectors are more motivated by lottery tickets, prizes or paid time off rather than monetary compensation. Collectors in 2018 have it easy compared to when I became a collector over twenty years ago. Technology and automation has taken the craft out of the collector role. I can remember having a rolodex full of contacts from other companies with whom I’d share information, calling directory assistance or using telephone books to find location information for a consumer. Now there are multiple vendors at our disposal who you can send a batch of accounts to and in return get the consumers’ most recent contact information all within a matter of minutes. Collectors no longer have to dig

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Agency Advisor Sam Eidson

in order to find consumers because we do it all for them. To make it worse, the use of dialer systems created what I like to call dialer zombies. Dialer zombies are those collectors who just sit at their desk waiting for contacts to be fed to them. It takes constant motivation and oversight to ensure collectors are valuing each contact because they know another contact is coming their way as soon as they end their current call. In recent years our dialing strategy has transitioned to more of a manual approach forcing collectors to generate contacts on their own. Even managers had to adjust their mindset because we no longer used the set it and forget it approach. Prior to going with a manual approach we had to create a structured strategy that segmented the business in a way that makes sense. Once the strategy had been created we then had to focus on collector development. Collectors have always found shortcuts to make their job easier. Teaching file maintenance to collectors I identified as dialer zombies became quite the undertaking. Without the basic fundamentals it can be difficult for collectors to consistently perform, not to mention satisfying our clients’ needs. I encourage our management team to engage their collectors throughout the day and monitor key performance indicators such as attempts, contacts and payments to ensure each collector is doing what we expect. Walking the floor, performing side by side training and holding internal call calibrations are ways we engage our collectors. If we don’t put an emphasis on training and development the collectors won’t feel the need for improvement or see the opportunity for advancement. As the old saying goes we would rather spend our time developing employees with the risk that they leave than not develop them and have them stay. Sam Eidson is the Director of Operations for Delta Outsource Group, Inc. He also serves on the Board of Directors for the Missouri Collectors Association. March/April 2018

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Pay Attention to Incoming and Outgoing Mail!

In passing the FDCPA 40 years ago, Congress found that there was “abundant evidence” of the use of abusive, deceptive and unfair debt collection practices. Later case law clarified that the purpose was to protect consumers victimized by unscrupulous debt collectors while allowing collectors efficient, reasonable and ethical practices in pursuit of their profession. Fast forward to today, and while so many things in our lives have changed like cell phones, email and electric cars, the FDCPA remains mired in a collection reality that no longer exists. Moreover, consumer advocates (and I use that phrase guardedly) now seek to use the FDCPA shield as a sword for their financial benefit; to manipulate protective language into profits. Nowhere is this more prevalent than in the required lettering under the FDCPA. Most of us will recall when our clients required we provide notice of the tax consequences of settlements. I can tell you that not a single one of these clients added this language to trick the consumer into thinking the IRS was involved in their case. The client thought they were allowing the consumer to make an informed decision at settlement. Yet, soon thereafter, an act of consumer empowerment was the subject of lawsuits that transformed into an abusive practice. Oscar Wilde’s adage that “no good deed goes unpunished” was particularly resonant here. With the passage of four decades, FDCPA case law no longer defines what is or is not a violation: Consent Decrees play that role. While I believe the regulators tread too heavily, they set bright line rules for everyone to follow. This, I believe did not please the consumers bar who prefer to deal in the gray areas of the law. As a result of these clear guidelines, consumer lawyers are now pursuing theories that contort the intended purpose of the FDCPA. Recent FDCPA filings bear this out. More and more, consumer lawyers are not having clients come to them with collection abuses. Rather, they are intentionally taking actions to generate violations. Let me give a couple examples. In one recent lawsuit, a consumer firm changed names but the attorneys remained the same. The court ordered the “new” consumer firm to file an appearance. They never did and never came back to court. After the case languished for months, a notice letter as to the next court date was sent to the attorney and his client to ensure someone appeared at the next court date. Lo and behold, an FDCPA lawsuit was filed for improper notice to the consumer. The FDCPA case was dismissed because the state’s rules required an attorney to appear to receive notice. However, the case became more interesting when the decision was circulated to our state creditors bar. It was discovered that several practitioners had been hit with the same set of facts, by the same law firm, and they had paid out settlement monies. This switching names was a pattern and practice of this firm.

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Legal Collection Advisor Fred N. Blitt

More recently, clients have been sued for untimely updates of disputes on credit reports. Here, a consumer firm utilizes a form letter that announces their representation but, buried in the letter was the word “dispute.” If the dispute was not recorded by the 14th day, they were suing debt collectors. Then, as clients began training employees to look for the keyword “dispute” the form letter miraculously changed its language to eliminate the word “dispute” and replace it with “balance not accurate.” To date, tens of cases have been filed on that theory. Hence, a purposefully generated violation not consumer victimization. The same is happening with demand letters. With many clients no longer charging interest, the consumer bar suddenly could not sue for so-called balance inaccuracies or that the interest disclosures were improper. With that avenue foreclosed, their recent tactic is a claim an FDCPA violation because a pre-suit demand letter did not disclose we might incur costs, if we file suit and if we win. Why? Because we are misrepresenting the potential exposure to the consumer. Sound vaguely familiar to the 1099 language issue? There we warned about potential exposure and still were sued. Here, if we were to take them up on their suggestion, the same firm would claim we were misrepresenting that costs were already awarded. Candidly, these actions by the consumer bar are troublesome to say the least. If you do the research, you will see that in many jurisdictions, there are many of these type letter disputes being filed in quantity. Some are settled, some are being fought and some are being taken to a higher court. As always, you need to determine your pain threshold for the cost of fighting these claims. Internally, training is the best approach. Make sure your staff knows the players, what to look for and how to handle these common tactics. Further, your compliance staff should be looking at recent case law to determine the trends in your location. Fred N. Blitt, Esq., is a partner with Blitt and Gaines, PC in Illinois and Couch, Conville and Blitt in Louisiana. He is past president of NARCA. March/April 2018

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Cybertracking Using Email & Websites

I have been asked on several occasions why data brokers pro provide IP addresses and how are they useful to a tracer. In this article I will attempt to explain how an IP address may be used ttoo locate a person. If you are attempting to utilize IP addresses to trace, it is first and foremost that you have a clear understanding of what an IP address actually is and the information it can and cannot provide. Let me start by explaining exactly what an IP address is. Every computer that has ever been connected to the Internet has been given an Internet Protocol (IP) address. This IP address is used as a type of location tool, which allows a network administrator or Internet service provider to differentiate one computer from another. While an IP address won’t be able to tell you exactly where someone lives, it will be able to confirm the general area in which they reside–sometimes within a couple of blocks of their actual location. If you watch television you may have the impression that you can find a person’s physical location, just by knowing their IP address and running some super-secret high-tech program. This isn’t true. There is, to the best of my knowledge, no technology that will instantly tell you where someone is if you know their IP. In fact, I believe, there is no single piece of technology that could ever tell you that. With a lot of legwork and some court orders you might be able to eventually find someone, but it’s not like what you see on television and in motion pictures at all. The professional tracer must understand what they can and cannot learn from the IP address. The IP address will indicate which Internet service provider (ISP) is being utilized by the user. Many IP addresses may be the user’s company IP. In other cases, it may be just one of the large ISPs such as ATT or Comcast. The IP will also provide the approximate physical location of the user. What the ISP address will not provide is the actual name of the person using that IP address. As for the providers, the ISPs will typically only release such information under a court order. There is no method of associating an exact physical geographical address or the computer associated with an IP address that an end user can use. Even to report abuse by a person behind an IP address you must contact local authorities or the ISP who is in control of that IP address. A professional tracer should also keep in mind that an IP address could be spoofed, stolen, or could be behind a proxy and using its IP address. Now that we understand what an IP address is, the next step is learning how the tracer may acquire the actual IP address. Many data providers today provide all the IP addresses associated with the person the tracer is searching for, making the tracer’s job very easy. Other methods to obtain an IP address are as follows.

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Skip Tracing Advisor Ron Brown

Examine the Header of an Incoming Email

When you want to find someone’s IP address, an email from them is one of the best places to check. IP address information can be found using a function embedded in most email programs. This method varies depending on the type of email service or program you’re using. The header’s information is the most important thing for which to look. There should be an option called “Internet Headers” or simply “Headers” in the settings of your email program. (Find detailed instructions later in this article under 3. Show Headers and Address.) Turning on this option displays a new range of data on your messages, including the sender’s IP address. The format of an IP address is numeric, written as four numbers separated by periods. As an example, Facebook’s IP address is 69.171.237.16. A professional tracer using an IP address must always be aware that header information can’t always be trusted. In fact, it can be totally fictitious. When you have located an IP address using this method, perform an IP check by using the command prompt to ping the address and confirm its validity. Another method is the use of an IP Locator Tool to get the location of an IP address. It’s not 100% accurate, but you can roughly know the location of the user at the point he’s using the said IP address. Once you have obtained the IP address you can attempt to trace that device or the person using the device in question. Yes, it is possible. There are various sites available on the Internet to trace location of an IP. But some of them don’t give correct information. Now that we have a better understanding of what an IP address is, its capabilities and limitations and how to obtain it, we can proceed with how a professional tracer may utilize the IP address to trace. Knowing the IP address will allow the tracer to locate a country, city and the Internet provider. But locating someone precisely requires far more information than simply an IP address. Fortunately, there are a few methods for finding an March/April 2018

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“Find the location of your target’s ISP.” IP address either for a website or an individual device. A tracer may utilize Traceroute, geolocational tools, and similar utilities but the best you can realistically achieve is to find out the location of your target’s ISP.

many seconds or milliseconds the ping took. When you Ping an address, the computer sends a signal out to a URL which then bounces back with the website information attached, and how long the round trip took.

Traceroute

Open a command console. To open a command con-

sole on a PC, click on “Start,” then “All Programs,” then “Accessories,” and then “Command Prompt.” On Windows, enter tracert <IP address>. On UNIX (including Linux and Macintosh OS X), open a shell and use the command traceroute <IP address>, and how long each step takes.

2. Go to a website that will allow you to look up IP address information. Google “IP Lookup” or “IP Geolocation”

for a large list of sites that will freely offer this service. Another method to trace a website IP address is to simply ping the URL from your computer’s command console, then use an IP lookup to find out where it comes from. Similarly, to trace the IP address of an email, find the IP address from the email header, then use a “whois ______” search or IP lookup to trace it back to its source. Type “ping [URL].” You then press return/enter. The IP address should appear beside the website name, followed by how

Show Headers and Address. Open a message. From the View menu, select the option that lets you view all or extended headers, and your To/From section will blossom with new information. If you are using a Mac, click View > Message > All Headers. On a PC, click Options then the dialogue box launcher > Message Options dialogue box (Properties) > Internet Headers. Next to the Received section you will see something like “from …” and an IP address. Select one of those, and copy it to the clipboard. In this case, we’ll select 66.220.155.163, and copy it. We can see that it says “Received from http://mx-out. facebook.com,” and you may run a test to see if that’s accurate. Open a command console. Only this time, instead of doing a ping on a known address, we’re going to run a “whois” in your terminal window. By the flashing cursor, type “whois 66.220.155.163,” and press Enter. The information will be sent out to a database, queried, and then returned with the registration information for that IP address. If this function does not work with ease on your computer, entering the IP Continued on page 19

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March/April 2018

Batch or Manual Skip Tracing for You?

ROUTING SLIP Initials

There’s an age old debate on which is the most effective way to skip trace an account. The old school method is to have a collector manually skip trace an account using resources and tools provided by the collection agency. The new school method that has been around for a while now is batch skip tracing. So which is better? The reality is that they both provide value to the overall objective which is finding the consumer, generating a right-party contact, and collecting the debt. Here we will discuss pros and cons of both options and ultimately leave the final decision to you as an agency operator but we will provide you with enough information to make an informed decision.

Manual Skip Tracing

When done correctly, manual skip tracing can be the most effective method, albeit not the most efficient. Manual skip tracing and having eyes on each account will result in a successful strategy producing the desired or intended result. I say that with the understanding that the skip tracer is well trained, skilled, and knows what they are doing. Manual skip tracing is an art form in a sense and it takes a well trained eye to know what to look for and just as importantly what not to look for. Skip tracers need to be intuitive and use their judgment based on what they feel to be true even without conscious reasoning; instinctive. There are several web based platform sites that offer the ability to manual skip trace although more companies are switching to batching. I would recommend you have your skip tracer/collector have access to at least two of these web-based platforms so they can leverage multiple resources when searching for consumers. I also can’t express the importance of implementing a significant training program for skip tracers/collectors using such platforms. From experience, just turning a collector loose with skip tracing tools and telling them to go find the consumer is the least effective and efficient method. Take the time to develop training material that covers skip tracing from A to Z and ensure the training is effective and once it is unleash the material on the skip-tracer/collector and watch the results roll in.

Batch Skip Tracing

While manual skip tracing may be the most effective method of skip tracing, batch skip tracing is the most efficient. The objective with batch skip tracing is to achieve maximum productivity with minimum wasted effort or expense. This is exactly what batch skip tracing does. In the time it takes a skip-tracer/

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Collection Industry Advisor Nick Jarman

collector to manually skip trace 25 to 30 accounts, batch skip tracing can skip trace thousands upon thousands of records. During the on-boarding process of setup with a batch skip tracing company, the agency will work with the skip tracing company to set up the most efficient method(s) to provide the desired results. One strategy is to take your manual skip tracing training strategy and recreate it through the batch skip tracing process. While batch skip tracing can’t replace a set of intuitive eyes looking at each account, in collections we work in a risk-versus-reward business and it can be a good business decision when the reward outweighs the risk. Batch skip tracing has come so far over the years as well. One of the major testaments to this is that the reporting capabilities can truly help you mix and match your overall strategy to garner the best results. The ultimate question is which is better, manual skip tracing or batch skip tracing. To provide an answer that may come from an attorney (of which I am not), they both are. There are certain criteria you may want to consider when determining which method to use such as small balance, low score and bad demographic. You may want to use batch skip tracing because, again, the risk may not be worth the reward and you don’t want to spend a lot of time on accounts that are going to provide little to no return. On the flip side, higher balance, higher score and better demographics would perhaps warrant both batch and manual skip tracing if the batching doesn’t produce your desired result. In the end, it is important to find the right strategy that fits your agency. This can only be done by testing while using a champion/challenger strategy and ultimately going with the method or methods that will bring you back your biggest return. Nick Jarman is the owner of RightAway Consulting & Coaching. Jarman served the last three years on the Board of Directors for ACA International and is the past President of the Missouri Collectors Association. March/April 2018

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11 Strategies to Improve the Science of Skip Tracing BY JASON HORSLEY, DIRECTOR OF COLLECTIONS AND RECOVERY AT LEXISNEXIS RISK SOLUTIONS

kip tracing is part art and part science. The science involves leveraging technology. I’d like to share 11 strategies to improve how you use Jason Horsley technology to improve the science side of skip tracing. Utilizing skip trace technology is a business-growth engine because it takes care of “easy” day-to-day activities like phone number identification and change of address, while at the same time working harder to solve overarching skip trace challenges like optimizing allocation of resources. You want to stay relevant to your customers so that your business grows despite the jungle of compliance regulations that you wade through every day. That’s not easy to do because of the fast-paced, ever-changing and highly-competitive nature of today’s environment for the collections industry. Growing your business, while mitigating compliance risk is a top priority, and skip tracing is an important element that can help. Below are 11 best practices for effective skip tracing efforts that you should begin implementing now.

accounts, agencies can strategically assign resources, data spend and treatment approaches. Second, use predictive analytics to select and rank phone numbers. This more modern approach allows for you to make contact with the consumer sooner and with fewer failed attempts.

3. Monitor for Changes One of the

most underutilized technologies is monitoring for skip data changes. A study conducted in 2015 on Lexis Nexis phones found that in the first month of monitoring, there was a 10% lift in right-party contacts and that lift continued month-over-month. Enhance your batch processing with

change alerts on all data types including phones and address.

4. Test your Cell Phone Data Providers It’s imperative for collection

agencies to use technology to identify cell phones, but just as you test various phone number providers, you should also test cell identification providers. Also, leverage technology to identify real-time ownership of the cell number. You should test to make sure you’re protecting your agency from TCPA (Telephone Consumer Protection Act)

This article is continued on www.CollectionAdvisor.com.

1. Don’t De-Dupe Instead of de-dup-

ing in your batch process, have your data provider flag and return duplicate data that still seems to be good. This way, you’ll remain focused on quality data and avoid getting bogged down by progressively worse data. By confirming instead of de-duping, your business becomes more efficient.

Ready for your next agency audit? State Licensing & Insurance for Nearly 20 Years

2. Use Predictive Analytics Opti-

mize your use of predictive analytics. This can be done in two ways: first, by using contactability and recoverability scores to sort and prioritize your portfolios. With prioritized .com

March/April 2018

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"The time is now for us to take our

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industry back, come together as one and control our destiny; together, because NONE of us are as strong as ALL of us.

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DEERWOOD COURSE The 4th hole at The Clubs of Kingwood in Kingwood, Texas, which was featured as No. 18 in the U.S. Open scenes in the movie “Tin Cup” starring Kevin Costner.

PULL-OUT CALENDAR

COLLECTION TIPS

Last Day to File Taxes

Collectors in legal debt collections need to understand when and how court costs get billed to an account to quote the consumer an accurate balance. – David Olefsky, Partner, Blitt and Gaines, PC

THURSDAY

APRIL 2018

A professional collector will constantly strive to update the consumer’s data in the collection file. Never use phrases like, “do you still work down at Ajax Plumbing?” or, “does your wife still work at Baptist Hospital?” This type of questioning encourages the consumer to just say, “Yes.” Ask outright, “Who is your current employer and what is a number there that we can contact you?” or “Where is your wife currently employed?”– – Ron Brown

WEDNESDAY

contact information with alternate phone numbers and mailing addresses. – T. Steel Rose

Remember to update

Ask customer about tax refund

TUESDAY

Stay positive and restart after each call. Consumers can sense when a collector is struggling or when their head is not in the game. Check outside issues at the door, remain positive at all times and refresh after each call. – Sam Eidson

MONDAY

Take control of the call by demanding the balance, wait for the consumer to say they can’t prior to making the next offer. – Sam Eidson

Move on when money has gone cold. This can be one of the hardest things to do but once you have been stalled to exhaustion or the consumer stops responding it may be time to move on. – Sam Eidson

FRIDAY

Collection Letter Cases Gone Wild

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Letters are a necessary evil for debt collectors – necessary because we are required to provide disclosure of the consumer’s right, and because communication with a consumer is necessary to ccollect ollect a debt. They are evil because of the potential for FDCPA lliability, iability, even when the letter is straightforward and well-mean well-meaning. While 2016 was the year of the bar code cases on collection letters, 2017 can be characterized as the year of interest accrual disclosure cases. This article summarizes and cites some of the interest accrual disclosure cases from the second half of 2017. Deciding whether or not to disclose in a collection letter that interest may or may not be accruing makes one feel as Debra J. Ciskey though he were watching a table tennis match at the Olympics. The pace is dizzying, the faults are frequent, and at the end of the day even the observers are likely to dissolve into a puddle of card issuers, leading to confusion among least sophisticated consteaming sweat. The issue is simple: If interest is accruing on a sumers as to whether the debt collector to whom the account is consumer’s debt, disclose that fact to the consumer. The hang placed for collection will continue the original creditor’s practice up is the serve – when should this be disclosed, how should it related to the addition of interest. Several courts have disagreed be disclosed, should the interest calculation be disclosed, what with these arguments. In Derosa v. CAC Financial Corp. in the if you are collecting multiple debts with different interest rates? Eastern District of NY (9/28/17) the court, in reference to the And if you are not collecting interest, should that fact be dis- consumer’s interpretation of the language in the collection noclosed? Let’s try to organize our tice to be the kind of “bizarre or thoughts around some of these idiosyncratic” interpretation that a issues with a highly summarized court must not adopt when con“The courts are to some extent simply look at recent decisions. sidering debt collection language burdening the collection industry The Avila case (Avila v. under the FDCPA, quoting the Riexinger & Associates, LLC, 2nd Greco case decided in the Second with a continuing portfolio of litigation Circuit, 2016) agreed with a much Circuit in 2005. that potentially raises the cost of credit older case (Miller v. McCalla, 7th Other reverse Avila cases findCircuit, 2000) by suggesting that ing no disclosure is required when for all consumers.” collectors could achieve safe harno interest accrues include (not an bor by disclosing to consumers all-inclusive list): that the “amount of the debt stated in the letter will increase • Krause v. Professional Bureau of Collections of Maryland, over time, or clearly states that the holder of the debt will acU.S.D.C., EDNY, 12/27/2017 cept payment of the amount set forth in full satisfaction of the • Ozier v. Rev-1 Solutions, LLC, U.S.D.C, EDWI, 8/9/17 debt if payment is made by a specific date.” The court further • Powers v. Capital Management Services, L.P., U.S.D.C, OR, expresses a preference to advise the consumer of the specific rate 8/2/2017 of increase over time. Reverse Avila cases generally assert that if the collector is Be aware problematic language in collection notices when required to inform the consumer the balance will increase over the debt collector does not add interest has been defined: “As time due to the accrual of interest, then collectors must also in- of the date of this letter.”(Fatema Islam v. American Recovery form consumers if the opposite is true – that is, that the balance Service Incorporated, U.S.D.C., E Dist. NY, 10/31/17.) Interestwill not increase because no interest will be charged. The basis of ingly, while the court found for the plaintiff in this case, Judge this argument stems from the fact that in some jurisdictions, it Brian M. Cogan provided interesting commentary about the is possible for a debt collector to add interest, and this being the state of FDCPA litigation: “The multitude of cases on postcase, the collector is beholden to inform the consumer whether judgment interest filed in this district since Avila suggest that or not it will be taking advantage of the interest potential, be- the real beneficiaries are plaintiffs’ attorneys to recover a fee cause the least sophisticated consumer will be confused about for going over collection letters with a fine-toothed comb to snag the balance otherwise. some technical argument about how the letter could have more Another common argument stems from the fact that the clearly stated the interest component.” He cites another case Continued on page 25 original creditor added interest on the balance due, such as credit

Compliance Advisor

March/April 2018

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COMPETITION OR COLLABORATION? THE TRUTH ABOUT ARM TRADE ORGANIZATIONS BY GORDON C. BECK III

here is much debate around the ARM Industry regarding trade organizations in our world of credit and collections. Is participation valuable? Which ones have Gordon C. Beck III the most dynamic and fresh content? Which ones are expensive? Which trade group will expose me to new clientele? Which ones require an invitation? We see it everyday in our email, through our LinkedIn, in our trade publications or websites, ads for the next conference, news about industry happenings, webinars to sign up for and committees to join. Behind these sources are the true heroes of our industry. In many cases the originators or organizers of these groups work in jobs like the rest of us and then dedicate their spare time to giving us all a voice, a platform to connect and learn and network and grow. All of us professionally reside in arguably one of the most evolving, sometimes volatile, often undefined and almost always misunderstood industries of all time. We are always competing, for an edge as we seek out the best technology, vendors, employees and clients. However, what if we asked our clients what they prefer when it comes to competition versus collaboration? What if we told them that we were going to take our foot off the gas of individuality and joined forces, shared trade secrets, offer one another solutions for our related issues and products so all of us could stay ahead of the curve and ensure them through our collective efforts that no agency on the scorecard would ever finish less than 95% of best? Well I asked one of my largest clients this very question and here is what Steven Stone of Verizon Wireless had to say. .com

March/April 2018

“I have always looked at the ARM industry as more of a fraternity than a competition and although I strongly believe in friendly competition, I am much more in favor of friendly collaboration,” said Stone. “The trade organizations the industry has to offer are plentiful and have too much to offer all of us so not further tapping into those resources through participation and the sharing of best practices would be a lost opportunity. There is no question that this would improve overall performance from the agency network and most likely aid in better compliance as well. Having all of your agencies at 95% of best is every OCA (outside collection agency) manager’s dream.” Hiding in plain sight, in the bowels of your email and the reading panes of your web browser, are the platforms ready to unite us, yet too often overlooked or justified against. In a business where adaptation is survival, ARM trade organizations are there to bring us together so we can work smarter and faster then ever before. Anyone that knows me knows that I preach endlessly about the necessity to be transparent to each other in the best interests of our clients and our industry. I have watched our world in recovery consume, deter and excommunicate too many good ARM firms unnecessarily that I feel as if it is time to be the one to stand up and just say it, please get involved! There are over 6,000 agencies in America, yet on many webinars, trade group rosters and conference attendee lists, it is common to see less than 200 participants and in many cases it is much less. Big or small, the industry needs your participation. Big ARM firms didn’t start big, they grew through solid practices and great performance. I know because when I started with my agency, 20 years ago, we had 9 agents and I would like to share with you my own, undeniable proof that

trade organizations can not only teach and connect agencies, they can actually build them! In 2006, my organization joined a popular trade organization whose focus was risk in the telecom arena. When we began participating we had 3 major clients, 65 FTE and one big appetite to learn, engage and grow within the industry that we were so passionate about. What transpired was twofold:

Personal Level • • • • •

Learned the art of public speaking. Learned how to “ice-break” (yes, ice breaking is a skill). Was taught many strategies and best practices. Learned what the ARM industry truly means to America. Met some of the best friends of my life.

Company Level • • • •

•

Strategies brought back drastically improved performance. Company security and compliance improved. Met and hired vendors – best in class. Went from three major telecom clients to working with every major wireless, cable and satellite company in the country. Grew from one office and 65 people to five offices and 1,200 FTE.

None of this was possible, or at least not this quickly, if not for this trade organization. The best news here is that this is an example of what just one trade organization can do to aid in the growth and success of your agency.

This article is continued on www.CollectionAdvisor.com.

Reasons to Diversify into New Markets

For decades in the collections industry there was a tendency and a perceived strength in specializing your recovery expertise in a specific market or vertical. It was a feather in the cap of yyour our organization to say, “We only collect medical debt. It iiss our priority and specialization.” In many respects that is a platform p latform upon which you can still market your firm in 2018 but there is a popular and often-preferred trend to diversify the client base and spread out perceived industry risk. Diversification, from an investment perspective, is defined by Investopedia as, “a risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio constructed of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.” Collection organizations invest in client relationships. We are always interested in relationships that yield respectable profits, however, a large part of the decision to march into new markets has to do with perceived risk relative to compliance. It is often escalating risk in a firm’s market of expertise that serves as the impetus to look at greener pastures. Those pastures may look lush and beautiful but if you see some cows (regulators?) around, you better watch your step as you wander there! From a business perspective diversification is defined as, “the process of a company enlarging or varying its range of products or field of operation.” Even the old adage, “Don’t put all your eggs in one basket,” tells us that there may be some sound reasons to consider other markets, but the pathway can be fraught with pot holes requiring us to navigate carefully and thoughtfully. Although diversification can spread your business risk in some fashions it can create unforeseen needs to not only understand the underlying culture of other markets but to comprehend the compliance, regulatory and business environment of those sought-after opportunities. For example, recently an agency owner that specialized in financial collections approached me about expanding into the medical market. Those that have focused exclusively on the medical market have a different perspective, however, due to the evolution of hospitals. Many firms are losing decades old relationships with small to mid-sized hospitals that are being acquired by mega hospital conglomerates that already have their large collection firms in place. The bad debt recovery models are now moving upstream toward early out and extended business office models. Thus, many in the medical vertical are moving into new approaches or to completely new markets to “escape” the difficult dynamics of the medical arena. Where should you be? Let’s consider some of the pros and cons of particular markets:

Medical

There is still a mountain of business to be had. However, the large agencies are getting larger and the smaller

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Benchmark Advisor Harry A. Strausser III

players are being pushed out. Physicians are selling their practices and joining the hospitals on salary. There is a huge movement toward the extended business office models. Be ready to understand and implement the important HIPAA standards that will be required.

Financial

Many firms still engage in credit card recoveries and service banks and credit unions. There are respectable volumes of accounts available but since the creation of the CFPB, players in this space must maintain impeccable compliance standards. Many believe that the smaller players don’t have to comply or are at least not in the cross hairs of the CFPB, but that culture is changing. Many small firms are encountering increasingly stringent compliance demands in this segment. Creditors are aggressively auditing vendors and requiring infrastructure as well as operational changes to meet growing compliance mandates.

Debt Purchase/Servicing This market had seen a huge level of growth 15 years ago. Today, many buyers and servicers have left the market. Very few opportunities exist and the compliance mandates are enormous. To partner with respectable issuers and servicers the hurdles are significant thus keeping many players out of this vertical. Student Loans Some firms have seen significant growth in this segment. A sole focus on the education industry is embraced by some, with high liquidations and student payment assistance programs that help secure payment via loan consolidations. Servicers get credit for these arrangements that result in payment of the debt. There are enormous concerns about the Perkins Loan program sun setting that may reduce volumes significantly. I have been surprised at the lack of vendor auditing and oversight in this vertical and feel the future holds much more required agency management. Municipal

Many agencies have serviced a local municipality or two within their array of clientele. Today, many firms are looking to develop this vertical as it offers Continued on page 19 March/April 2018

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CFPB Rules Delayed… Again C

FPB rulemaking on debt collection has been further delayed. The delay comes from the CFPB formally canceling its request for approval of a survey on consumer understanding of debt collection disclosures. It appears the Bureau leadership decided to reconsider what it called Debt Collection Quantitative Disclosure Testing based on Acting Director Mick Mulvaney’s announcement last month to freeze all pending regulatory action. In August, the American Bankers Association opposed the CFPB’s request because the CFPB had sought to test materials and disclosures not made available for public comment, as required by the Paperwork Reduction Act. The CFPB intended to use the survey to learn more about the burden collecting information inflicts on consumers, as well as the validity of the methods used including the use of automated collection techniques. The survey was considered to be the next step in developing the long-anticipated debt collection rules, which have now been delayed over two years. - Video on CollectionAdvisor.com Diversify and Why Continued from page 18 collection leverage and is not as large a focus by regulators. The down side is that the heightened interest has increased competition and has driven down the commission structures. If you are thinking of heading in new directions be sure to engage in thoughtful planning and interact with specific industry trade associations and support networks. Be sure that the greener pasture you perceive is not just a mirage. Talk to other colleagues to determine the pit falls and challenges of a chosen segment and be ready to develop training programs to bring your staff up to speed! No matter what segment may draw your attention, pay special attention to this month’s Collection Advisor’s focus on Skip tracing. Each of the verticals addressed above require unique levels of need to find consumers. This function is probably more vital in 2018 than ever before due to the transient nature of our culture! We welcome ideas and best practices from our readers. Feel free to send your ideas for possible inclusion in a future column. Until next time, I’m in a collection office hear you! Harry A. Strausser III is the President of Interact Training and Development. He can be reached at harrystrausser@gmail.com. .com

March/April 2018

Parents Helping Children with Student Loan Debt and More A

s accounts receivable professionals know, when advising consumers on how to resolve a debt, emphasis should be placed on reaching out to parents and family members who can help. A recently published survey by creditcards.com further supports this tactic as it indicates 52% of parents have helped their adult children, 18 years or older, pay a debt. The most common debts surveyed parents paid for their children were student loan (20%), auto loan (19%), medical debt (17%) and credit card debt (16%). The survey also found men were more likely to help children pay bills than women and parents 55 and over were more likely to help pay than those younger than 55. It pays to ask consumers about their parents’ ability to help as, in this case, there is a one in two chance the account can be resolved. Recent data from the Federal Reserve says U.S. student loan debt reached $1.49 trillion in September. As of 2015 Fed research indicates the average monthly student loan payment for borrowers age 20-30 years was $351, with a serious delinquency rate of about 11%. - Video at CollectionAdvisor.com

Cybertracking Through the IP Address Continued from page 9 address at www.whois.com/whois should produce the same information. In this case, we can verify that the message was sent through Facebook. Notice we also have the domain registrar’s full address. Use an alternative lookup. You may not want to use the terminal, or perhaps it’s not loaded on your computer. Instead, you can try using an Internet lookup, such as “ip-lookup,” which gives you much the same information as a whois lookup, and in many cases, much more. I will conclude with one last bit of information for tracers, a great starting point is with the site www.freepeoplescan.com. The thing that makes this website so great is having accessibility to both general public and privately-owned data. This site will give a deeper look into information not available freely. You may well uncover criminal history records, crucial data, police arrest reports, cell phone reverse lookup and social media research. Until next time… good luck and good hunting. Ron Brown is a member of the National Association of Fraud Investigators and the author of “MANHUNT: The Book.” Contact him at rbrown2150@aol.com.

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WHO’S WHO IN COMPLIANCE 2018

Top A/R Pros Drive Compliance and Production Compliance with federal and state regulation has made and destroyed accounts receivable organizations. It is the pillar on which respect in the accounts receivable industry rests. Collection Advisor reached out to leaders in the industry for nominations for accounts receivable professionals who not only strive to discern and adhere to regulation but educate professionals around them to improve the industry as a whole. Collection Advisor is proud to present the Who’s Who in Compliance 2018. Each of those selected provides their response to the question: What is something first and third party accounts receivable professionals should act on regarding compliance in 2018?

JOE ADAMS | CCCO, CRCP, CIA Executive Vice President Hampton Pryor Group

RICK BONITZER President/CEO Credit Collection Partners

“Reviewing all aspects of their Compliance Management System to ensure that the proper controls are in place to guarantee its effectivity and success.”

“Surround yourself with good people; specifically, vendors. Your vendor partners should have your back from a compliance standpoint. Visit with them often and ask pointed questions about how they are keeping you compliant.”

JOHN H. BEDARD, JR. | Managing Attorney | Bedard Law Group, P.C. “Act on your data! Data is the raw material of analysis. ARM professionals hold the most comprehensive source of collectioncycle data in the marketplace. Analyze that data. Study that data. Mine the gold out of that data! Drive compliance and production using one of the very best resources you possess – your data!”

LESLIE BENDER | Chief Strategy Officer & General Counsel | BCA Financial Services, Inc.

“Make a commitment to converting unstructured compliance data (complaint narrative, phone calls, etc.) into structured information that can be incorporated with your account management software. Integrating usable compliance information with production data is the key to improving exception reporting and finding the needles without digging through the haystack.”

“In 2018 top compliance priorities need to include data security and ongoing awareness training and reminders for an organization’s workforce.”

DEBRA CISKEY Chief Compliance Officer Wakefield and Associates, Inc.

LADONNA BOHLING | VP of Special Ops | Contract Callers, Inc. “ARM Professionals should focus on vulnerability and risk assessments; more specifically their internal and external auditing processes, their examination cadences and their remediation efforts. Weakness in ongoing protections versus the managing of potential threats systematically requires consistent improvements.”

DAVE CHERNER Attorney Moss & Barnett

“Compliance officers must become data analysts. Valid or not valid, complaints from consumers drive the enforcement activity of regulators, so use data the way they do to spot potential problem areas in our agencies, then correct practices that drive complaints. Think like a consumer and a regulator.”

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DEBBIE DIRUBBIO | Collection Manager | CBHV Collection Bureau of the Hudson Valley, Inc.

JOANN NEEDLEMAN | Leader – Consumer Financial Services Regulatory & Compliance | Clark Hill PLC.

“A compliance management system has an absolutely necessary place in the accounts receivable operation, but we can’t lose sight of the end game – which is, of course profitability. We shouldn’t sacrifice one for the other – balance is key.”

“2018 presents a unique opportunity for first and third parties to establish long-term regulatory clarity. Industry must be actively engaging federal regulators now to craft workable and reasonable guidance in order to avoid compliance disruptions with every administration change.”

MIKE FROST | Chief Compliance, Sales Officer and General Counsel CBE Companies, Inc. “In 2018, all first and third party accounts receivable management professionals should consider the various forms of consumer communication and how those forms of communication may align within their respective compliance management system. The manner in which we communicate is continuously evolving and innovative standards warrant immense consideration from a compliance perspective.”

KATIE GRZECHNIK NEILL Compliance & Litigation Counsel ARS National Services Inc.

“While things are relatively quiet in early 2018, compliance professionals should button up their company’s change control procedures for the anticipated changes coming in 2018. A honed-in change control process will make implementing new regulatory requirements a smoother experience.”

NICK JARMAN | Owner Right Away Consulting “They should act on and embrace the latest technology. There is a myriad of technology available to the ARM industry that is relatively new such as VoApps, Solutions by Text, and InterProse to name a few. To succeed in the future, it is important to embrace technology in the present.”

ALICIA S. MCKEIGHAN Chief Compliance Officer | Afni, Inc. “The industry’s compliance focus should

shift to technology solutions such as automation of compliance controls designed to decrease risk, and machine learning tools that give us more visibility to risk. The regulatory landscape may be shifting from regulation by enforcement to real rules, potentially allowing us to make technological advances that are mutually beneficial for the industry and our consumers.” .com

March/April 2018

HARRY A. STRAUSSER III | Scholar, Fellow, MCE, IFCCE, CCCO ARM Industry Consultant

Interact Training and Development

“Active participants in the collections industry must pledge a compliant culture in 2018 as the very foundation of their organization. A company grounded in a solid, compliant mindset assures respectful relationships with consumers, acceptance by regulators and ongoing corporate growth and survival.”

NICOLE M. STRICKLER | Partner Messer Strickler, Ltd. “Letter review, letter review, letter review. I cannot stress enough how important it is to have your letters reviewed by outside counsel, preferably someone who regularly defends consumer claims. Defense litigators are generally the first to become aware of the new theories being advanced by consumer counsel. Moreover, lawsuits based upon letters have seen a noticeable uptick in the last year.”

ALEX REED | SVP, Operations CBE Companies “We must shift from focusing on pure operational efficiency to contact efficacy: reduction of wrong party contacts, and even preempting contact with low yield and compliance-risky debtors. Targeting the right yield – avoiding those that come with baggage.”

ANNE THOMAS | Chief Compliance Officer | Cavalry Portfolio Services, LLC “Continuous improvement is what a Compliance Management System should achieve. Communication and education are crucial components for compliance professionals in order to help drive this goal. Equally important, is a strong compliance monitoring program – this allows senior management, compliance and audit to answer the question – “How do you know?”

Skip Tracing Roundtable

PREVENT WASTE FROM THE BEGINNING WITH SKIP TRACING

BY JOSHUA FLUEGEL

eing unable to locate a consumer to close an account makes every other investment in collection tools and processes a waste. Therefore establishing a flawless skip tracing procedure should be near the top of every accounts receivable professionals priorities. A mistake could cost an accounts receivable entity time, money and possibly open it up to legal repercussions. Collection Advisor spoke to skip tracing solution vendors to find out about mistakes they see professionals make and how they can be avoided.

What is a misstep you see accounts receivable professionals make when handling batches for skip tracing and how do they prevent it? JONATHAN BROOKS President of LocateSmarter Development Solutions Too many companies make choices on price, when they need to think about cost; the cost of wrong numbers, the cost of fewer right-party connects, the cost of slower liquidation. Just a cheap price for wasted hits can cost you extra litigation, lost revenue and time wasted. Quality matters.

WALT WOJCIECHOWSKI CEO of Microbilt One of the biggest mistakes we see is the selection of their vendor. All vendors can and do provide good accurate data on stable and prime customers that have a long-time history in one location or will typically file change of address information. Unfortunately, many vendors do not have current information on the consumers that don’t necessarily want to be found in a skip trace situation. If you are looking for a new vendor, you should test to ensure they have access to information on your customer type. If you already have a vendor, you should schedule a periodic review of your results. Your customer type may be changing, or the vendor may have lost a source that is important to you. Another mistake that is prevalent is management of the data once it is received by the customer. Do they have processes in place that prevent re-sending inquiries if the skip tracing company has already responded? You would be surprised how many companies send an inquiry multiple times. Lastly, it is important that the customer act on the new information they receive in a timely manner. If you get an updated telephone number and/or address, make sure that information gets into your collection queue quickly.

DARREN CHAREST President of U.S. Tracers Many accounts receivable professionals limit themselves to a certain set of output fields, such as one phone number, one address. Increasing visibility by leveraging more information increases their chances to collect.

STEPHANIE CLARK President of VeriFacts A common misstep we see as a skip tracing vendor is that our client may not have the staff available to process the verifications returned. This valuable information is immediately actionable in most cases. If you’re garnishing, you’re in a race to get there first. Be prepared to process the information returned from your skip vendor, full time employment, and act quickly. Delaying action due to low staffing could lead to the information becoming stale or irrelevant. If you’ve paid for it, make sure you have the resources available to move forward and maximize your return.

What is a measure skip tracing vendors are taking today to make sure the consumer information they are receiving is correct?

This article is continued on www.CollectionAdvisor.com. March/April 2018

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Collection Tips for A/R Pros

aluable information should be absorbed whenever it presents itself, particularly when it is from the minds of industry thought leaders. Fortunately, there is some presented right here, plain and simple. Do your best to put it into practice today.

NICK JARMAN

Owner of RightAway Consulting

Be Positive: Accept full responsibility for your choices. A positive attitude is a decision we make, moment by moment. If you look for the worst, you will find it everywhere. When you learn you have the power to choose your response to what life brings, you can look for the best and find incredible opportunities. If you find yourself with an attitude that is not what you want, change it! Be Present: Be totally focused on the moment and on the person or task with which you are engaged. When you are fully present with each other, you are listening deeply and important opportunities do not escape you. The glue in us is being fully present for one another in all situations. Being present is a great way to fight burnout and it creates focus so that you do not keep wearing yourself out. Giving 100% to the task at hand demonstrates dedication, cooperation, and enthusiasm. Be Memorable: Make someone’s day or moment through a small act of kindness. Turn a routine call or encounter into special memories. Never be afraid to lend a helping hand when a situation warrants it or not. Be sure to give words of encouragement and turn difficult circumstances into positive experiences. Offer to listen to issues or situations that are going on around you and act accordingly. Do not always think about the “expected,” but think about the “unexpected” as well. Most importantly, make them remember you. .com

March/April 2018

LOU FREEDMAN

Partner, Blitt and Gaines, PC

The culture of dignity. Never lose your temper despite a frustrating call or tone from the consumer. Whether their situation is one they heaped upon themselves or a life-changing event that impacted their finances, it’s important to understand as best you can how they feel on the other end of the call. Collection with dignity is the gold standard. Get Lawyers Involved. Understand that legal collections provides support for the call center, and vice versa. If the call can’t provide a solution for payment, or the consumer refuses to communicate, understand that you work for a law office that can level the playing field through the court system. Service of summons, a pending court date, or filing of a garnishment sometimes provides the inbound contact that helps reach a solution.

HARRY A. STRAUSSER III

President of Interact Training & Development

Never, Ever, Stop Learning. One of the joys of life is to continually embrace the idea that “we don’t know everything.” The day we start thinking “we know it all” is the day that we should start looking for another job. Education is at the very heart of the collections industry. Whether you are a front-line collection professional or the CEO, the changing landscape of the ARM industry provides for a wealth of educational opportunities. Never Underestimate the Power of Positive Thinking. Dr. Norman

Vincent Peale, told us in his best-selling book, The Power of Positive Thinking, that looking at our personal lives and our professional goals in a positive light leads us to higher levels of success. When you are feeling down

or negative, do your best to look at the silver lining that might be temporarily hidden.

No One in the Company is More Important Than Another. We might

argue that without the CEO/owner, we have no company. However, those that have been part of successful organizations embrace the notion that everyone is a vital piece of the organization’s ability to build a pathway leading to growth and future existence. No job is beneath another. What impacts your company more, the receptionist or lead payment poster out for the day or the CEO?

MICHAEL STARZEC

Partner at Blitt and Gaines, PC

Situational Awareness - the case is set for trial and the notes reflect no witness. Is this the time to keep pounding on the payment plan that is completed in 12 months with a large down payment when the consumer has said they cannot do it? Or do you take the offer that is within parameters or follow up with the client to see if you can accept it.

RON L. BROWN

President and CEO of CSI Group

What Not to Ask. When dealing with a consumer never ask them if they can pay the debt. Ask, “how soon can we expect the balance in our office?” If you do not get a positive reply ask simple questions such as “why” or “why not.” The professional collector must know the consumer’s circumstances before they can set up a payment arrangement.

This article is continued on www.CollectionAdvisor.com.

Collection Education for A/R Professionals

The importance of keeping abreast of new developments in regulation, technology and collection techniques cannot be overstated. The following Collection Education Exam is a quick way of reviewing the information covered in this issue of Collection Advisor. The answer key is available at CollectionAdvisor.com/exams. However, if a question has you stumped, it is a good idea to go back to review the issue and to make sure you do not miss any valuable information.

1. According to columnist Sam Eidson, what can make the difference between a cohesive collection floor versus one that is dysfunctional? A. Creating the right culture and managing personalities B. A well-calibrated compensation structure C. Making sure upper management development does not interfere with the collection floor D. An assigned compliance officer 2. According to columnist Sam Eidson, collection managers should look out for what problem is caused by dialer systems? A. Attendance-challenged B. Prima donnas C. Dialer zombies D. Headset potatoes

3. According to columnist Fred Blitt, what is a tactic dubious consumer law firms practice to generate FDCPA violations? A. Baiting A/R professionals on the phone B. Switching names C. Coaching consumers D. Both A and C

network administrator or Internet service provider to differentiate one computer from another? A. MX record B. IP address C. ISP D. I/O address

4. According to columnist Fred Blitt, a predatory consumer firm tactic involves trading out the term â&#x20AC;&#x153;disputeâ&#x20AC;? with _________ in form letters? A. Disagreement B. Amount discrepancy C. Balance not accurate D. Conflict

6. According to columnist Ron Brown, you can ping an ________ to check its validity. A. MX record B. IP address C. ISP D. I/O address

5. According to columnist Ron Brown, what is a type of location tool, which allows a

7. According to columnist Nick Jarman, what factor must a A/R professional consider

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COLLECTION EDUCATION FOR A/R PROFESSIONALS

when deciding between manual and batch skip tracing? A. Small balance B. Low score C. Bad demographic D. All of the above 8. According to the Who’s Who in Compliance 2018, which of the following is not something described as an aspect of compliance accounts receivable professionals should act on in 2018? A. Data Security B. Awareness training C. Compliance checklist D. Risk assessments 9. According to columnist Debra Ciskey, what was a major cause for lawsuits in 2017? A. Interest accrual disclosure B. Bar codes C. Exposing confidential information D. Mini-Miranda disclosure 10. According to columnist Debra Ciskey, the recent Avila v. Riexinger & Associates case suggested A/R professionals are safe so long as: A. Letter language is not “bizarre or idiosyncratic”

B. It is stated that the balance in the consumer’s letter will increase over time C. The balance of the account is not specifically stated in the letter D. None of the above 11. According to columnist Debra Ciskey, letters must be closely examined to avoid words that could be misinterpreted. Which of the following is not a listed phrase to be avoided? A. Balance due B. Principal balance C. Current balance D. All are listed 12. What percentage of surveyed parents paid their children’s student loan debt? A. 10% B. 14% C. 18% D. 20% 13. According to Jason Horsley, what should an A/R professional do when working a batch of account contact info to remain focused on quality data and avoid getting bogged down by progressively worse data? A. Avoid de-duping B. Ask consumers for alternative contact info

Collection Letter Cases Gone Wild by Ciskey Continued from page 16 (Ghulyani v Stephens v. Michaels Assocs., 2015) in which the court wrote “the interpretation espoused by Ghulyani is indeed idiosyncratic – much more likely to be arrived at by an enterprising plaintiff’s lawyer than by a least sophisticated consumer.” Judge Cogan further commented: “We are no longer deterring collection companies from abusing, tricking, and misleading debtors into making payments that they do not have to or would not want to make if they had the relevant facts. The courts are to some extent simply burdening the collection industry with a continuing portfolio of litigation that potentially raises the cost of credit for all consumers.” The adage “say what you mean, and mean what you say” is a wise one to apply when composing collection letters. The next step is to analyze literally every word used in your letters to determine if there are multiple definitions that could possibly be applied to the word, and if so applied, would change the in.com

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C. Confirm over the phone the appropriate contact has been made D. Develop your waterfall technique 14. According to Jason Horsley, how can an accounts receivable professional optimize the use of his or her predictive analytics in skip tracing? A. Prioritizing portfolios using contactability scores B. Prioritizing portfolios using recoverability scores C. Utilize predictive analytics to rank phone numbers D. All of the above 15. According to a tip from Harry Strausser, no one in the company is more important than: A. Compliance B. The bottom line C. Another D. The client

Answer key available at collectionadvisor.com/exams

tended meaning in such a way to confuse the least sophisticated consumer. For example, labeling the balance due as the “current balance” can imply that the balance may change from what it is “currently.” The same applies with the label of “principal balance” which implies that there are other components to the balance, such as interest or fees. Maybe you have been lucky and your language has not been challenged. That fact does not mean that it might not be the subject of a lawsuit in the future. Get past the notion of “we’ve always done it this way and we have not had any problems” and reevaluate your notice language. The small cost of engaging expert counsel for a review of your notices is worth what it could save you later in defense costs should an “enterprising plaintiff’s lawyer” decide to practice his or her craft on your favorite notices. Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.

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Buyers Guide

Collection Agencies United Collection Bureau, Inc. 1st and 3rd Party Collections ucbinc.com | ssharma@ucbinc.com 954-236-6027 UCB, Inc. provides national debt programs for creditors in all markets from fully-secure high performance collection centers located in the U.S. and Latin America.

Collection Software CDS Software CollectOne collectone.com info@collectone.com 888-816-3333 CollectOne is an award winning suite of debt collection solutions that provides a feature-rich set of automated business processes designed to minimize costs and maximize results.

Comtech Systems Collect! Credit and Debt Collection Software collect.org | info@collect.org 800-661-6722 Collect! combines ease of use with total integration of functions. Accounts are efficiently tracked from the time you receive them until activity is concluded and they are closed. Collect! keeps track of critical information automatically. Total integration provides for seamless and accurate month end invoices and statements with full account histories. Comtronic Debtmaster debtmaster.com 800-414-2814 Debtmaster®360 gives you a cloud hosted, cost-effective, flexible, secure, collection solutions that helps you manage compliance and provide quality service for Clients and Debtors.

CODIX iMX Collection, Legal and Recovery Solution codix.us/debt_collection | bquinn@codix.us 404-790-0998 iMX is a complete centralized debt collection and recovery software solution. Based on the latest technologies, iMX Debt Collection includes all the most advanced business functionalities supported by native tools.

DAKCS Software Systems Beyond.Net dakcs.com | sales@dakcs.com 800-873-2527 DAKCS Software Systems has been an industry leader for over thirty years. Headquartered in Ogden, Utah, DAKCS provides a one stop shopping solution for a diverse client base. DAKCS is committed to providing their customer community with all the tools they need to succeed in the ever changing ARM business, today and in the future.

Collection Solutions Software, Inc. CSS IMPACT! HD™ 2.0 cssimpact.com | carlb@cssimpact.com 818-593-4830 CSS IMPACT! HD™ 2.0 (Enterprise), the industry’s leading ARM | Collections & Compliance Platform delivering decades of deep rooted industry acumen for the ARM, Collections & Compliance sectors. IXP (Lite) also available.

InterProse InterProse WebAR ACE interprose.com/collection-advisor aaron.reiter@interprose.com 844-244-1135 Debt Recovery Software Solutions through a patented Virtual Agent Collector and a true, web-based collection platform, open to third-party integrations and packed with process automations.

The Computer Manager, Inc. Debt$Net Collection Software debtnet5.com | sales@debtnet5.com 800-552-8397 Since 1987, Debt$Net collection software has provided collection agencies, law firms and in-house collection departments with one of the most comprehensive collection systems in the industry.

Quantrax Corporation Inc. RMEx quantrax.com marketing@quantrax.com 301-657-2084 Quantrax is a high-end collection technology company that has marketed and supported an intelligent collection software platform for over 25 years.

Simplicity Collection Software SimplicityCollect simplicitycollectionsoftware.com sales@simplicitycollect.com 866-791-0224 As an industry leader, Simplicity is the only software provider to offer a web solution with unlimited users, clients, accounts, and custom fields at an affordable price! Sentinel Development Solutions, Inc. eCollections ecollections.com | sales@ecollections.com 515-564-0585 The result of 20 years of industry-leading collections/ recovery platform development, eCollections is a comprehensive enterprise collection system with flexible configuration, ease-of-use, powerful payment features, workflow automation, and unparalleled reporting and tracking.

Collection Support Services Applied Innovation Inc. ClientAccessWeb, PayStream, GreenLight, and Papryus appliedinnovationinc.com mjeffers@appliedinnovationinc.com 800-589-5651 Applied Innovation provides a suite of compliant solutions for the ARM industry. Our solutions have proven to increase your bottom line with improved effeciencies, increased client sales and retention, and increased web services. Designed for your continued growth and success. Cornerstone Support State Licensing and E&O Insurance cornerstonesupport.com info@cornerstonesupport.com 888-445-8660 Cornerstone Support is the premier licensing and insurance provider to the collection industry; professionally trained to assist you with all of your state licensing needs.

Compliance LexisNexis® Risk Solutions LexisNexis ® Accurint ® for Collections lexisnexis.com/risk/receivables-management 800-869-0751 LexisNexis Risk Solutions assist debt recovery professionals with increasing workflow efficiencies, gaining greater insight into debt portfolios, collecting more in less time and achieving greater profitability. March/April 2018

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Predictive Dialers Noble Systems Corporation Contact Center Technology noblesystems.com info@noblesystems.com 404-851-1331 Noble Systems Corporation is a global leader in customer communications, providing innovative premise and cloud solutions for Contact Center, Workforce Management and Interaction Analytics technologies.

March/April 2018 Volume 18, No. 2 Editor-in-Chief Joshua Fluegel josh@collectionadvisor.com Editor T. Steel Rose, CPA, ACG editor@collectionadvisor.com Copy Editor Myrna Nelson Publisher Angie Rose angie@collectionadvisor.com Subscription Changes Joshua Fluegel josh@collectionadvisor.com The opinions given by contributing authors are their own and not necessarily the opinion of our staff and ownership. All trademarks used are the property of their respective owner.

Collection Advisor (ISSN# 1556-0813) is produced six times a year by Abide Media, P.O. Box 92342, Southlake, TX 76092, 888-610-1144. Standard Mail postage paid at Sussex, WI 53089. ©2018 All Rights Reserved Magazine Publishing Group, Inc. Printed in the U.S.A.

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Skip Tracing IDI Inc. idiCORE ididata.com sales@ididata.com 855-842-1410 Trusted for over a decade by collection agencies and collection attorneys. IDI provides fast, accurate and cost-effective consumer verification and skip-tracing solutions via online, API, and batch processing. Reduce Cost, Not Quality. LexisNexis® Risk Solutions LexisNexis® Accurint ® for Collections risk.lexisnexis.com 800-869-0751 LexisNexis® Risk Solutions assist debt recovery professionals with increasing workflow efficiencies, gaining greater insight into debt portfolios, collecting more in less time and achieving greater profitability. Melissa Data Listware melissa.com greg@melissadata.com 800-542-7434 Melissa offers solutions that empower collection professionals with the right-party contact information for successful collections and account management efforts. VeriFacts Payroll Promise verifactsinc.com sclark@verifactsinc.com 800-542-7434 Payroll Promise is designed to support a legal strategy by locating verified full time places of employment. The information returned is 100% guaranteed to be accurate.

Virtual Collections Applied Innovation Inc. ClientAccessWeb, PayStream, GreenLight, and Papryus appliedinnovationinc.com mjeffers@appliedinnovationinc.com 800-589-5651 Applied Innovation provides a suite of compliant solutions for the ARM industry. Our solutions have proven to increase your bottom line with improved effeciencies, increased client sales and retention, and increased web services. Designed for your continued growth and success.

Cast Your Votes! Collection Advisor’s Top Technology Partners

Collection Advisor’s Accounts Receivable Top Technology Partner Awards recognize significant vendors serving the Accounts Receivable profession. The awards recognize specific dedication in product development and breakthrough technologies to help Accounts Receivable professionals and their customers be more productive and compliant..

Collection Advisor’s Innovative Agency Awards

Collection Advisor’s Agency Innovation Award recognizes those agencies demonstrating advanced processes for technology and procedures in the Accounts Receivable profession. The awards recognize outsidethe-box thinking in management, compliance, motivation, community impact and cutting edge concepts to promote the Accounts Receivable professional. Award recipients will be decided by the Award Committee, which is comprised of the editorial staff at Collection Advisor, thought leaders among the profession, and the publication's Editorial Advisory Board. Board members include Accounts Receivable professionals from various sized firms across the country who are engaged in a variety of practice areas. Nominations for the 2018

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AND THEN THERE WERE TWO If you want the best, you will soon be evaluating these two products. One of them is powered by proven artificial intelligence, has been redesigned for today’s demanding environment and leverages automation, analytics and emerging mobile technologies. The other? Let's just say it's getting old. Fighting today’s problems with modern technology improves your results and your bottom line. Isn’t it time to modernize? Proven in over 35 states and Canada, confident and ready for a fight. We are Quantrax.

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