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CREDIT BUREAU REPORTING:
What you should be asking your
Collection Agency and Why?
Tuesday, June 2, 2015
Kenlyn T. Gretz
President and CEO Email: [email protected]
This is not legal advice.
You should contact your company attorney for legal advice.
In 2014, Roughly 1 in 5 American
Adults Were Contacted by a Debt
Collection Agency about Medical
Bills” – Nerd Wallet
http://www.nerdwallet.com/blog/health/2014/10/08/medica
l-bills-debt-crisis/#_ftn2
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Medical Debt Responsibility Act
According to the U.S. Census, there are 245
million American adults 18 or over.
According to the Urban Institute, more than
one-third of adults have debt in collections.
According to the ACA’s Top Market Collections,
the majority of new business in the third-party
collections market is for health.
Who do they report to?
Big Three Credit Bureaus
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TransUnion
PO Box 1000
Chester, PA 19022
www.transunion.com
800-888-4213
Experian
PO Box 2002
Allen, TX 75013
www.experian.com
888-397-3742
Equifax
PO Box 740241
Atlanta, GA 30374
www.equifax.com
800-685-1111
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Some counties still have
smaller credit bureaus
Usually ineffective
What do they know about the FCRA?
Not just the agency saying:
“we have to report
what is true and accurate.”
Fair Credit Reporting Act
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Fair Credit Reporting Act
The plaintiff has two years from the date of discovering
the violation that is the basis for liability or five years
from the date on which the cause of action arose,
whichever is earlier.
Example:
If the violation occurs on Jan 01, 2005, the plaintiff has
until Jan 01, 2010 to file suit.
Fair Credit Reporting Act The plaintiff has two years from the date of discovering
the violation that is the basis for liability or five years
from the date on which the cause of action arose,
whichever is earlier.
Example:
If the plaintiff discovers the violation on Jan 01, 2006,
the plaintiff only has until Jan 01, 2008 to file suit as
the Statute of Limitations would run from the date of
discovery.
Fair Credit Reporting Act
The plaintiff has two years from the date of discovering
the violation that is the basis for liability or five years
from the date on which the cause of action arose,
whichever is earlier.
Example:
If the plaintiff discovers the violation on Jan 01, 2009,
the plaintiff only has until Jan 01, 2010 to file suit
because the five year statute of limitation cannot be
extended by the discovery of the violation.
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Fair Credit Reporting Act
Willful violations: $100 to $1000 per violation,
attorney fees and punitive damages.
Negligent violations: only awarded actual damages
and attorney fees.
Do they have enough FCRA
compliance education?
Do they have a CCCO on staff?
Credit & Collection Compliance Officer (CCCO)
Designation (Advanced Level)
Designed for the advanced professional, typically a
Chief Compliance Officer, this designation provides
an in-depth range of knowledge on compliance
strategy in the debt collection industry.
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Fair Credit Reporting Act
Certificate from
Consumer Data Industry Association
http://www.cdiaonline.org/About/content.cfm?ItemNumb
er=10922
Who We Report To and When
All Three
$10.00 for Experian and Equifax and $50.00
TransUnion
10th & 25th of the month after 60 days of listings –
METRO2 Format of Data
Allows notice and many phone attempts
Lenders do not always pull all three bureaus
What We Report
Creditor Name unless Medical, then it says
Medical Account
Amount owed
Original Default date from the original
creditor
Any payments made at our office
Compliance Condition Code
Redacted Account number
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Update Frequency
Within next 2-3 months, we are moving
toward reporting daily to decrease the
amount of calls about credit files.
Why We Report
Leverage to pay before
Smaller Balances have no legal leverage
Leverage to pay when denied
Canceled must remove from credit file-FCRA
Skips
Refuse to communicate
Credit Bureau Listings
Lowers Score for 7 years
Even after paid, but not as much
Consumer who is paying monthly will have a
better score than those that do not pay until
the end.
Lenders will often require consumers to pay
the debts before a loan can be issued,
especially now.
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I don’t Care
“I don’t care if you put it on my credit file, it is messed up!”
“I don’t care if you list the account with Americollect, my credit
is ruined anyway.”
“John, you sound like a hard working person who is really
struggling now. I realize that right now, you may think – what
is one more account. In a year or so from now when you are
working hard at re-building your credit, you may think that “I
wish I would have worked with XYZ’s office when they called
to work out a payment plan.” John – I have several options
for you.”
Demand for Removal
Not allowed.
I need to get this account paid in full.
It is on my credit file.
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Your Staff Gets the Inbound
“Thanks for calling and I am sure I can help you, but I first need to
update my system. What is your current address? Phone
number, including cell number.”
Get Info.
“Now are you trying to get a loan or have you been denied?”
Get Info.
“I personally cannot help you, but I am going to transfer you to our
collection agency. One second.”
Call us with your info or use weblink www.americollect.com
Your Staff Gets the Inbound
Why should you not give a pay out?
Legal
Interest
Unrecorded Court costs or attorney fees
Sometimes you still take the payment. We understand. WRONG:“Your account is cleared in full and your credit will be cleared up
(removed ).”
CORRECT: “The balance that we show is paid in full but you may owe
more to the agency. You can call them and check. I will be contacting
them with your payment of $.XX. They will report to the credit bureau
what is true and accurate within 30 days.”
Helping Out
Hurry to Pay You – When they
want something.
15 days to update with credit
bureau normal way-inline
Metro2 reporting.
If they ask, we offer to send a
letter to their financial institution.
The can be your customer
again.
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What are the agency’s reasons
for removal of a credit file?
Removal Circumstances
Account was listed in error
Mistake made on your part
Misapplied payments
Certain instances where consumer didn’t get
notification of the debt
Payment in Full at times.
How long?
Consumer 15 days but soon, daily.
We can do it instantly, but a manual process.
How do they handle repeat
frivolous credit bureau disputes?
Sample Letters
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Credit Repair Companies
Rip Off
All of the instructions are at
www.annualcreditreport.com
=
Credit Repair
Reporting Accurate Negative Information When negative information in your report is accurate, only the
passage of time can assure its removal. A consumer
reporting company can report most accurate negative
information for seven years and bankruptcy information for 10
years. Information about an unpaid judgment against you can
be reported for seven years or until the statute of limitations
runs out, whichever is longer. To calculate the seven-year
reporting period, start from the date the event took place.
Is the agency prepared to deal with
the NY Attorney General
Schneiderman?
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Knowledge Center
http://www.americollect.com/three-national-credit-
reporting-agencies-settle-with-new-york-a-g-
schneiderman/
Schneiderman Agreement
Phase 1 initiatives: Completed within 180 days.
DOBs will be required. Americollect will be prohibited
from reporting debts without a date of birth and
Experian, Equifax, and TransUnion will reject data
that does not comply with this requirement.
Guarantor DOB’s are important. Please add them to
your placement files or create a piggy back file.
Schneiderman Agreement
Phase 2 initiatives: Completed within 18 months
Must have a CCC of “BP: Paid by Insurance” and “AB:
Being paid by insurance” While delinquencies
ordinarily remain on credit reports even after a debt
has been paid, Experian, Equifax, and TransUnion
will remove all medical debts from a consumer’s credit
report after the debt is paid by insurance.
(CRAs will remove these from the credit file – III.A.3.c)
Clients need to tell us if insurance paid or personal paid.
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Schneiderman Agreement Phase 3 Initiatives: Completed within 39 months
Postpone reporting/listing medical debt to the CF for
180 days from Date of Delinquency allowing
appropriate time for insurance to pay. Medical debts
often result from insurance coverage delays or
disputes. As a result, medical debt may not accurately
reflect consumers’ creditworthiness. According to the
agreement, Experian, Equifax, and TransUnion will
institute a 180-day waiting period before medical debt
will be reported on a consumer’s credit report.
Does your agency have the tools?
What are they doing about IRS Rule
501(r)
http://www.americollect.com/501r/
Shawn Gretz, VP of Marketing
501(r) for Non-Profits
Extraordinary Collection Activity
Credit Bureau Reporting must
be done AFTER 120 days from
first discharge bill date.
Are you providing the first post discharge bill date?
Can your statement vendor provide this?
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How do they handle
E-Oscar Management?
E-oscar!!
http://www.e-oscar.org/
What is their back log?
Do they simply remove from the credit
file or do they do an investigation?
Skill set of those working it.
Join Us NEXT WEEK For A
Special Webinar
501(r)(6) ECA & CREATING COLLECTION POLICY
Learn the Requirements to Stay Compliant
Host: Shawn Gretz
Tuesday, June 9th, 2015
1:00 PM - 1:45 PM CST
If you would like to register today, visit our website at
https://attendee.gotowebinar.com/register/5530171118996348162
OR send an email to [email protected]
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JOIN US AGAIN IN AUGUST
NEXT WEBINAR
CHAPTER 13 BANKRUPTCY
Does it pay for you to file a claim based on the labor and
repayment length?
Host: Kenlyn T. Gretz
Tuesday, August 11, 2015
1:00 PM - 1:45 PM CST
If you would like to register today, visit our website at
https://attendee.gotowebinar.com/register/6758039732159836930
OR send an email to [email protected]
You’ll receive a registration email about two weeks prior to the webinar.
Thank You. [email protected]
SIX time winner of Inc Magazine’s Fastest Growing Private Company!
2009 – 2014
SIX time winner of Inside ARM Best Places to work in Collections.
