Encore Capital Keeps Flooding CFPB With Comments About Proposed Rule

Full credit goes to the folks at Encore Capital, which continues to flood the Consumer Financial Protection Bureau with comments supporting the agency’s proposed debt collection rule.

Hundreds of more comments were submitted last week by employees at the company, many of which all took the same form and used the same language, displaying support for the CFPB’s proposal to cap the number of calls per account that a collector can make to an individual at seven, and the proposal to more freely allow collectors to use alternative, digital communication channels to contact individuals.

[EDITOR’S NOTE: Have you downloaded a copy of AccountsRecovery.net’s Digital Communication Survey? What are you waiting for?]

Employees from Encore have been submitting comments for weeks now, and represent the overwhelming majority of comments from the credit and collection industry and have offset comments that were filed by consumers at the behest of a consumer advocacy organization which were critical of the proposed rules.

Regarding the call caps, the comments express concern about reaching individuals in order to help them work out their debts.

With regards to the CFPBs proposal to cap calls at seven attempts per week, per account, it is helpful to have a clear rule for calling consumers. Still, I do have some concerns.

Reaching consumers by phone is very difficult. Most consumers have several phone numbers and are often unavailable to speak. The seven-call cap per week will make it harder to connect with our consumers. The unintended consequences to consumers is that they wont be able to reach a workable repayment plan to resolve their outstanding debt, may be charged additional interest and fees, and may have negative credit reporting. If collectors and consumers are unable to connect by phone, consumers may also face debt collection litigation. For these reasons, it is critical that the CFPB does not reduce the number of calls allowed below seven because any restriction, quite frankly, means less opportunity to work out a payment plan with consumer.

In addition, the seven calls per week should apply to each account, not each consumer. Collectors that service multiple accounts for the same consumer typically service the accounts separately because each account is different. Each account may be a different product type (for example, telecommunications versus student loan debt), and can have a different statute of limitations. Different types of debt also have different regulatory requirements (for example, medical debt collection requires different legal and privacy considerations than credit card collections), and would need to be serviced differently by collectors with specialized expertise. It is therefore critical that call caps be applied per account, not per consumer, so that collectors can appropriately service different types of accounts separately.

Regarding the use of text messaging and emails, the comments express support at the opportunity to use a passive communication channel to try and reach consumers.

Allowing for communications by emails, texts and voicemails will update the law to accommodate how most consumers prefer to communicate today.

While the CFPB apparently views phone calls as a more active form of communication, requiring a bright line call cap, its critical to make sure that passive forms of communicating are not similarly restricted. It is important that these new technologies are not hindered by unnecessary barriers, and a main goal should be to enhance the communication between consumer and collector to resolve debt obligations. The CFPB created an appropriate balance by giving the consumer overt opportunities to opt-out of receiving communication through these technologies. 

Equally important to note is that these communications are passive forms to reach the consumer. Emails, voicemails and text do not interrupt consumers, as consumers can respond to them at their convenience. This differentiates them from how the CFPB has apparently viewed the active communications of phone calls, where the CFPB has proposed a contact cap. As they are passive communications, there should be no contact caps on emails, voicemails and texts. To take any action to restrict use of new technologies would chill their use and undermine the value of modernizing debt collection rules for the 21st century.

A huge influx of new comments will likely be posted today. The site used to manage the comments indicated that, as of Monday morning, there were 5,634 comments received, but only 2,413 were published.

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