ACA International Outlines Suggestions for Collaboration with the New Consumer Financial Protection Bureau

Credit and debt collection industry trade group ACA International Wednesday announced its recommendations to modernize America’s debt collection system for Consumer Financial Protection Bureau (CFPB) consideration as it carries out its charge under the Consumer Financial Protection Act of 2010.

“Modernizing the outdated Fair Debt Collection Practices Act (FDCPA), originally passed by Congress in 1978, is our highest priority along with enacting meaningful reform to balance a fair operating environment for debt collectionand consumer protection,” said ACA General Counsel and Vice President of Legal and Government Affairs Valerie Hayes. “We look forward to collaborating with the CFPB to ensure a balanced debt collection systemthat allows an industry that is vital to the U.S. economy to operateand protects consumers.”

Areas of focus approved by ACA’s Executive Committee and Legislative Council include:

• Modernize the FDCPA: Clarify the FDCPA so that debt collectors can communicate with consumers using technologies now available, which were never imagined in 1978 when the FDCPA was adopted, including cell phones, email, text messaging or other methods the consumer identifies as convenient. Modernization will help significantly improve communication between debt collectors and consumers.

• Leaving Messages: Clarify the information that should be provided by a debt collector when leaving a message for a consumer to collect a debt. Debt collectors want to effectively communicate with consumers in compliance with the FDCPA and better clarity will help.

• Validation/Investigation of Disputes: Require debt collectors to conduct a reasonable investigation of a consumer’s dispute regarding the amount owed on the debt, to whom the debt is owed or the party responsible for paying the debt. Require consumers to provide information specific to the dispute so the debt collector knows its basis and is able to conduct an investigation. With this information, the debt collector will be better able to determine the validity of the dispute and work with the consumer on appropriate resolution.

• Model Validation Notice: Make available a model validation notice that will provide collectors an effective safe harbor under the FDCPA when communicating with consumers in writing. In addition, a model validation notice will help collectors ensure consumers understand their rights under the FDCPA.

• Debt Documentation: Mandate that creditors maintain accurate account information for seven years, which aligns with the requirements of the Fair Credit Reporting Act. In addition, the CFPB should require that debt collectors and debt purchasers have access to the account information to ensure they have the proper information to address consumers’ claims and provide verification of debts when necessary.

ACA International is the comprehensive, knowledge–based resource for success in the credit and collection industry. Founded in 1939, ACA brings together more than 5,300 members in the United States and abroad, and their more than 150,000 employees, including third–party collection agencies, asset buyers, attorneys, creditors and vendor affiliates.