At yesterday’s joint FTC-CFPB roundtable on the debt collection industry, industry representatives advocated for a uniform, national standard for the documentation to be provided to debtors in the pre-litigation phase of the process. (Local court rules govern required documentation during litigation, making it unlikely that a national standard could be adopted for the litigation phase). Panelists suggested including such documents as charge-off statements, the last account statement, and identification of the original creditor (together with the retailer for private label cards). The industry representatives reiterated that they want to provide as much information as possible to help the consumer recognize the debt.
In addition, panelists generally agreed that records of consumer interactions with debt collectors, such as consumer dispute history, should be translated throughout the life of the debt—from the original creditor to the collection agency and through to any subsequent debt buyer or agency. There will likely be complexities in sorting out how to efficiently accomplish this, but panelists agreed that the necessary technology exists.
The debt collection industry is currently facing a rash of documentation-related challenges, which is why Ballard Spahr formed a Collection Documentation Task Force. The Task Force assists clients in responding proactively to documentation challenges, review collection procedures and counsel on best documentation practices.