Expert Q&A

Brother, can you spare a debt collector a dime?


With the economy remaining in shambles, you might think these would be plush times for debt collectors. You’d be wrong, says the new head of the collectors’ association, who says his industry is smarting from fewer bad debts and more regulation.

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Debt collection is a nasty job, but Mark Neeb loves to do it.

As the newly installed president of the Association of Credit and Collection Professionals (ACA), Neeb puts a friendly, articulate face on an industry that’s been demonized as much by movies and television as the real-life abuses of a few bad apples.

Neeb, a resident of Rochester, Minn., was elected president of the association this summer after serving as its national director from 2002 to 2007. A Certified Public Accountant with a master’s degree in business administration for the University of St. Thomas, Neeb entered the collections industry in 1990 with his company, The Affiliated Group.

Mark Neeb, president,
Association of Credit and Collection Professionals
Q&A with ACA President Mark Neeb

Mark Neeb puts an affable face on an industry that is not much loved — debt collection. A CPA by training, he sees his job as educating the public and his new regulator, the Consumer Financial Protection Bureau, about what debt collectors do.

Neeb hopes to remedy his industry’s bad reputation by educating consumers, Congress and the industry’s new overlords at the Consumer Financial Protection Bureau about the realities and challenges of collections today, starting with restrictive federal regulation he calls outdated and unwarranted. And he does so during a time when, contrary to what you might think, the industry is smarting because there’s less bad debt and consumers are more skilled at ducking collectors’ calls.

Can America find sympathy for the debt collector? Read on. Debt collectors don’t get “liked” much on Facebook, do they?

Mark Neeb: (Laughs) There are a lot of misperceptions out there. If you ask the average person on the street, they’ll all agree that people should pay their bills and they’ll act like they know a lot about what we do, but in reality they don’t; their opinions are formed by other media. There are bad attorneys and bad doctors and there are bad bill collectors. I think the public has become accustomed to hearing just the bad stories about our industry, so their connotations about our industry are understandable. My main goal is to help educate America about what we do. These would seem to be boom times for debt collectors. Are they?

Neeb: That’s the biggest misnomer of all. In reality, people in our industry prefer an economy that is strong and robust. Yes, there is an increase in the amount of bad debt that gets placed with collection agencies in a down economy. But what we’re seeing for the first time in my career is a bad economy and a reduction in bad debt, mostly due to credit cards. We had the (card debt) elephant go through the snake a few years back and now there actually are fewer charge-offs. As a result, the need for agencies has decreased. I heard the other day that one credit card issuer had gone from 65 or 70 agencies down to about 25. So there are a lot of people in our business scrambling right now. How has the dynamic between consumer and debt collector changed in the past 10 years?

Neeb: The consumer has gotten a lot savvier in their quest to avoid the debt collector. Most people don’t want to speak to a debt collector and will go to great lengths to avoid that. There is an embarrassment factor to having a bad debt. Even today, for every 100 phone calls my collection agency makes, I talk to the right party once. So technology is extremely necessary for us to be able to talk to as many people as possible. It’s more and more difficult to get hold of people. Those in debt often think they can outrun you. Can they?

Neeb: Avoiding the debt collector is probably the worst thing you could do because the debt is not going to go away; in today’s market, that account is going to be sold. In the credit card sector, credit card debts can be sold multiple times; that chain of title gets pretty long. So if I default on my credit card and think I’m going to wait out the debt collection industry, my account may be owned by three, four, five debt buyers over time and five years down the road, I’m still getting the phone calls. What should they do instead?

Neeb: If a debt collector is calling you, talk to them. Work something out. Most collectors are going to be in that kind of mood, particularly in this economy. We’re taking payments from people like mad. How have government regulations hampered your ability to do your job?

Neeb: It’s complicated. The Fair Debt Collection Practices Act of 1978 and the Telephone Consumer Protection Act of 1991 basically restrict us from communicating with the consumer by means and at times that might be more convenient for them. The TCPA was passed primarily to stop telemarketers from indiscriminately dialing random phone numbers to sell whatever, and we came under that. Nobody likes telemarketers, but how does the law hinder debt collection?

Neeb: Here’s the thing: Some people think you’re breaking the law if you don’t leave a message for a consumer and others think you’re breaking the law if you do leave a message. Personally, I was sued by a consumer two years ago for leaving the message and a competitor of mine was sued by the same consumer and the same plaintiff attorney for not leaving the message! They can’t have it both ways. We just want some clarification. What’s the solution?

Neeb: We need to update our laws so that agencies and consumers can work together in ways that are most convenient and preferable to the consumer. Last year, roughly half of all lawsuits brought against collection agencies were messaging-related. If we can get rid of half of the lawsuits, we’ll get rid of half of the plaintiff attorneys out there who are preying upon this murky law. ACA has had reform language ready for an FDCPA update for a couple of years, and I must say, it does a lot to protect consumers. How so?

Neeb: Consumers are missing convenience. They’re missing the ability to work with agencies in manners that are most convenient for them. Land-line phone calls and letters, to me, are the dark ages when you compare it to the technology advances that have occurred in the past 25 years. For crying out loud, if I’m a consumer and I want to email you at midnight, why can’t I? If I want to text my collection agent or web chat with an avatar, why can’t I? Shouldn’t consumers have a right to be told the legal status of their debt by the bill collector?

Neeb: It’s a tangled web, but the simple answer is that bill collectors are not attorneys. There are different collection laws in just about every state. If a consumer incurred a credit card debt in Iowa, then moved to New Mexico and now they live in Nevada, the debt collector is not in a position to offer legal advice or even to know whether the laws of Iowa, New Mexico or Nevada apply to this consumer. It’s illegal for a collection agency to purport to practice the law. We can’t give legal advice. Someone could sue me for giving legal advice. How do you feel to now be subject to oversight by yet another federal entity, the new Consumer Financial Protection Bureau?

Neeb: We don’t think we belong under the tentacles of the CFPB for several reasons. One, that bureau was created to protect consumers from folks who sell financial services. Well, collection agencies don’t sell financial services to consumers; we sell financial services to companies that sell financial services to consumers. It’s a little bit odd to me that we were brought under the bureau because we already have rules and regulations. We’ve been regulated by Congress with enforcement authority placed upon the Federal Trade Commission going back as far as you can remember. I don’t know that creating another regulatory body is going to protect anybody from folks in our industry any better than they were protected the day before the bureau was created. Do you have fears about the CFPB?

Neeb: My biggest concern is I used to think it was a bad thing that it took an act of Congress to develop a law that affected our industry. I mean, how do we reform the FDCPA if it takes an act of Congress? Well, the antithesis of that is that the new bureau now has rulemaking authority, so it no longer takes an act of Congress to have an impact on our industry. If the bureau is in a bad mood one day and just doesn’t like the debt collection industry, they can make rules that govern us without having those rules vetted by a larger body. Over the course of time, I would think they would cause there to be more restrictive rules and regulations toward industries like ours because that’s what their job is. And that bothers me. On the plus side?

Neeb: There is a positive side to this as well. It’s very difficult to get to Congress in a manner that allows you to communicate well. Trying to get Congress to understand what we do is very difficult if not impossible. We have an opportunity with the bureau that we haven’t had with Congress. We already have relationships there. Our job is to help educate them on what this industry is about so they aren’t just taking information from one direction. They’ve been open to that so far. Where would you like to see debt collection 10 years from now?

Neeb: Over the next 10 years, the best thing we can do is to gain the legal right to work with consumers in the manner they are most comfortable with. Two-thirds of Americans have cellphones only and the number of land lines is declining. Why shouldn’t we be able to contact people on their cellphones? It’s their only and their chosen method of communication.

The consumer is king. If they don’t want to talk to a human, so be it. Our job is to help the person.

See related:11 tips for dealing with debt collection, collectors, What happens to credit card debt after death

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