The new federal consumer protection agency already is prompting debt collectors to focus on consumer-friendly practices, an Omaha collections official said Friday.
“A lot more attention is being paid to consumer-service type activities, trying to help people resolve disputes more and understand the (debt collection) process more,” said Greg Hogenmiller, a Nebraska Collectors Association board member.
The Consumer Financial Protection Bureau was formed in 2011 to oversee a wide range of industries that deal with money and consumers, including the debt collection business, alongside its historic federal regulator, the Federal Trade Commission.
Hogenmiller is vice president and deputy general counsel of West Asset Management, a division of West Corp. that includes debt collection operations. The state collectors group is an affiliate of ACA International, whose members include debt collection companies. Debt collectors employ about 1,300 in Nebraska.
Although the new bureau is still writing some of its rules, Hogenmiller said, it is concentrating on how the industry can enhance consumers’ abilities to make the right financial decisions and avoid overdue debts. Next month, the bureau is starting up a new computerized system to receive and resolve consumer complaints.
Interest in the bureau’s activities is running high. This month, about 350 ACA members took part in a teleconference hosted by the bureau to discuss the consumer complaint system. Online training for companies taking part in the complaint system starts Monday.
Debt collection companies that belong to state and national industry groups “were already trying to do the right things,” Hogenmiller said. “You always have bad apples in any industry. I think there’s more scrutiny on it than before.”
Making the rules clear should help reduce the number of lawsuits pending against debt collectors, many of which relate to gray areas in the laws that are subject to varying interpretations, Hogenmiller said.
The industry wants the bureau to write regulations so that proper practices are clear to collectors and to consumers, he said, providing a “safe harbor” for companies to operate within the law and without fear of legal liability. “We’d like them to make the rules so we all know what we’re supposed to do.”