Have You Hugged Your Regulator Lately?

Special thanks to insideARM.com for providing me with a forum to interact with members of the credit, collection and debt purchasing industry. Today’s post is the first of many and I encourage you to agree, disagree and share your perspective. Better yet, I encourage you to send me your questions about any facet of the industry. I will be sure to address your questions in future blog posts.

Today’s topic is near and dear to my heart. Through my work as an advocate for the collection and debt purchasing industry I have come to know, respect and understand many, many state regulators. They are human beings first and regulators second. They are challenged by their mission and challenged by their position.

Often times underpaid, over utilized, and rarely understood, state regulators wrestle with a very long list of responsibilities. They are expected to balance and work within tight budgets, manage people, work within bureaucracies, manage complaints, process license applications, report to state legislatures, investigate, and litigate while at the same time driving their mission forward. Left in isolation, they base their opinion of all collection agencies and debt buyers upon negative press, consumer complaints, reports from fellow regulators, and the bad actors who place a black mark across the industry as a whole.

But can we blame them? Unless we educate them, how are they to know about the changing model of debt buying, the advances being made through technology, or the compliance challenges presented by conflicting laws, regulations, or even conflicts between state consumer protection laws and the Fair Debt Collection Practices Act (FDCPA)? How are they to know that with every new impediment to consumer communication comes another spike in the number of collection lawsuits filed against consumers?

Many business owners naively believe that if they keep a low profile, operate under the radar, and remain persona non grata in the eyes of the regulator, they will avoid negative press, investigations, and scrutiny. This notion could not be further from the truth.

If your state regulator doesn’t know you and your company by name, you have a problem. If your state regulator doesn’t understand the nuances of your business and your company’s market segment, you have a crisis brewing. If your state regulator only knows your company because its name is often listed on complaints, your reputation is being defined without you.

Despite the title of this blog post, I am not seriously proposing you hug anyone today. But I am challenging you to pick up the phone and call your state regulator. Introduce yourself and ask if you can schedule a meeting. Send press releases about your business to your regulator first. Don’t expect them to read about your success in the newspaper. Pay them the courtesy of keeping them informed about the issues you face as a business owner and an employer in their state. Most important, let them know about your commitment to compliance. I guarantee it is worth your time and your effort.

Your To-Do List:

1. During the first quarter of 2011, introduce yourself and your company to the regulators in those states where your company is licensed.
2. Meet with your state regulators at least annually, and periodically email them information about your company or the industry, issues you are facing, or challenges the industry is facing as a whole.
3. Respond promptly and thoroughly to complaints and respond completely to any questions they pose about your company or its practices. Don’t be coy.

Feel free to ask me for a list of the state regulatory agencies that oversee the collection and debt purchasing industry and their contact information. I can be reached by email.