Daily Digest – September 30. Collector Compensation in Crosshairs; Senator Warren Blasts Collection Practices

The Daily Digest is sponsored by TCN, a leading provider of cloud-based call center technology for enterprises, contact centers, BPOs, and collection agencies worldwide. 

COLLECTOR COMPENSATION IN CROSSHAIRS AS COMMISSION QUESTIONS COME TO FOREFRONT 

• Compensation structures are moving into the spotlight, as the Consumer Financial Protection Bureau works on its debt collection rule and as the scandal at Wells Fargo continues to generate headlines. Wells Fargo employees were accused of creating thousands of fake bank and credit card accounts in order to achieve sales goals and receive commissions. Many collection agencies compensate employees using commission as a financial incentive to get them to try and collect more money. Roger Weiss, a noted collections industry veteran, shared his process for developing a compliant, yet attractive, compensation policy for his collectors.

SENATOR WARREN BLASTS EDUCATION DEPARTMENT FOR DEBT COLLECTION PRACTICES

• Sen. Elizabeth Warren [D-Mass.] is coming to the aid of students of for-profit colleges, specifically those who attended Corinthian Colleges and are now being “hounded” by debt collectors to pay their student loans even though those loans may be eligible for a loan forgiveness program. Sen. Warren wrote a letter to the Secretary of Education calling on the department to give the students relief fro their student loans. Reports say that as many as 80,000 former Corinthian College students are in some form of debt collection for unpaid student loans. Corinthian College and its subsidiaries have closed and the company has filed for bankruptcy protection after it was accused of misleading students about their chances to find jobs upon graduation.

N.J. STUDENT LENDER CALLED OUT TO BE LESS AGGRESSIVE DEBT COLLECTOR

• A student lending agency in New Jersey is being called on to be less aggressive with its debt collection tactics following an 18-month investigation. The Higher Education Student Assistance Authority was spotlighted earlier this year when it forced the mother of a deceased college student to continue paying her son’s student loans, after he passed away. The agency currently has the authority to seize bank accounts and wages, garnish state tax refunds, and take away professional licenses, all without needed a court order.

ADVOCATES CLAIM TAXPAYERS WILL BE UNABLE TO TELL REAL IRS COLLECTORS FROM FAKE ONES

• Now that the Internal Revenue Service has taken the next step in meeting its requirements to send unpaid tax accounts to private debt collectors by contracting with four different companies, the consumer advocates have stepped up and are using the news as another opportunity to warn everyone about the perils of using debt collectors. Advocates expressed concern that individuals will not be able to tell the difference between collectors who are legitimately representing the IRS and those who are impersonating themselves as IRS representatives in order to scam people into giving them money. It looks like the advocates have no problem believing that most taxpayers are the least sophisticated consumer.

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The Daily Digest is sponsored by TCN, a leading provider of cloud-based call center technology for enterprises, contact centers, BPOs, and collection agencies worldwide.