I wanted to share with you the insights I gleaned from the fourth installment of my RMAI (Receivables Management Association International) CRCP (Certified Receivables Compliance Professional) series. As always, my biggest takeaway from the course is ensuring compliance. Specifically, though, this week, I learned two ways to help ensure compliance in this ever-changing landscape. The first is to keep up to date by setting alerts for legislative and news updates affecting our industry during the pandemic. The second is to ensure consumer-centric collections during this unprecedented time.
Cha-cha-changes
The Covid-19 pandemic is bringing changes to credit card debt collection. Nevada, Massachusetts, and Washington, DC were the first to enact pauses on debt collection activities (contacting customers, filing suits, wage garnishment, for example) in light of the Covid-19 pandemic. Both Massachusetts and DC have enacted the policies to remain in effect until the state of emergency has been lifted. Since these first states enacted restrictions on debt collection activities in response to Covid-19, many other states have added moratoriums and temporary restrictions since. Considering the fluid, evolving situation of this pandemic, any collector working in any state should check the current enacted restrictions for that area.
The Association of Credit and Collection Professionals (ACA) has filed a suit that the Attorney General’s injunction on collections activities should be overturned because it is actually barred by Massachusetts Litigation Privilege; it violates the Due Process Clause of the Fourteenth Amendment to the United States Constitution; it violates the Equal Protection Clause of the United States Constitution; is invalid because it violates separation of powers, and the order exceeds the Attorney General’s authority. This case is still before the Massachusetts District Court but depending on when the judge’s decision is made, could provide a precedent for other states to drop their injunctions on collections activities during the pandemic. Currently, no student loan collection is allowed Federally via the CARES Act. Additionally, any interest-bearing accounts for any student loan debt are exempt from accruing interest until the CARES Act expires. While not Federally regulated, many states have enacted various limitations on collections of medical debt. California, Indiana, Massachusetts, New York, Oregon, Rhode Island, and Vermont have also passed Orders and Legislation prohibiting garnishment of any stimulus money.
How To Stay Informed
Given the frequency with which state regulatory agencies are changing the limitations on collecting debt during the pandemic, checking for new Orders affecting where any debt is collected is crucial prior to action. Information is constantly changing during this unprecedented time and being informed is crucial to ensuring compliance. Great ideas on ways to track this constant barrage of updates are setting up relevant Google alerts and state legislative alerts. For instance, if your work is in one particular state, signing up for actions by your state’s legislature will capture many relevant policy changes; however, given that the City of Los Angeles city council passed a ban on debt collection this spring, simply having state legislative alerts would not have captured this news. Google alerts will fill in this gap. RMAI alerts have also been very helpful in keeping our industry abreast of changes during Covid-19. ACA also provides an alert service to stay informed of the myriad of updates to debt collection changes during the pandemic.
Consumer-Centric Collections
Ensuring compliance in collections is more important now than ever given the numerous and frequent legislative changes, executive orders, and updates enacted during this pandemic. Establishing a tracking system of alerts is one way to ensure this compliance. However, enacting your company’s own consumer-centric collections policies or provisions is another way to help foster compliance. By working with consumers during this pandemic, lawsuits are less likely to be brought to bear now and into the future. For example, while there may not yet be a legislative update to bar collections from anyone who is in the hospital with Covid-19, if a consumer (or representative) calls to request some forbearance for an unprecedented life event during this pandemic, there does not have to be an Order to have our industry willingly work with this consumer and make guided, mutually beneficial decisions on how to work with this consumer.
It is imperative for our industry to be a good partner to consumers now more than ever. In addition to helping the consumer, a consumer-centric collections policy during this pandemic will help counter any misperception of our industry that could be the catalyst for strict, sweeping legislation or action by the National Consumer Law Center. The RMAI hardship policy provides an excellent template for consumer-centric policy changes and implementable ideas. While only regulated by some states so far, it is becoming industry standard during this pandemic to not garnish stimulus funds, for instance. This “policy” is an example of a consumer-centric collections practice that isn’t called for by law but that is becoming the standard simply by its humanism.
To Sum It All Up…
We’re in unprecedented times right now. Every day brings new Orders, legislation, and news affecting our country, its people, and by extension, our industry. Keeping up to date on all these changes is crucial to ensuring compliance. Luckily, we live in a hyper-news driven society and can keep abreast of relevant updates by getting alerts from our legislatures, Google, RMAI, and/or ACA. These alerts will help keep your head informed of all the updates to our industry right now, but we’ve got to keep in touch with our hearts right now, too. Implementing a consumer-centric collections policy is a great tool to help facilitate compliance and help protect consumers and our industry during this pandemic.
I want to thank everyone at RMAI and those involved in creating a great learning experience through the CRCP certification. Once again, I’m eager to do more research into these bills and cases to continue to grow my knowledge base in ensuring compliance in my work.
Disclaimer: This information is not legal advice and may not be used as legal advice. The information discussed or contained is not an explanation of the law and is presented for educational purposes only.
