Is the FTC Acting More Fairly Toward Collectors?

For those of us who have been in the ARM industry for a while, it does not seem imaginable, but it happened twice in the past week; the FTC acted favorably toward bill collectors.

Yesterday, insideARM Editor Patrick Lunsford reported that the FTC quickly ruled that it is not a violation of the FDCPA for mortgage collectors, in their initial consumer communication, to inform a debtor of settlement options that could prevent foreclosure (See the actual letter at http://www.ftc.gov/os/2008/03/P084801fdcpa.pdf).

This is big. The FTC is rarely quick to react to anything – especially in favor of bill collectors. In this particular case, the FTC not only moved quickly but also acted in a way that is a win-win for collectors and debtors alike. Wow! Kudos to Babara Sinsley and Manny Newburger for taking a stand against the FTC and, as a result, eliminating one circumstance where consumer lawyers file frivolous lawsuits against agencies.

While I am on the topic of the FTC, you may not be aware that they filed their annual report to Congress on the FDCPA last week. I realize that most bill collectors are not jumping up and down for joy at this news, as the report is notorious for pointing out the rise in the number of consumer complaints against collection agencies. Maybe you will get excited though, when you learn that, for the first time, the FTC actually provided context for understanding the nature of its data. Did you ever try to sift through the FTC’s annual report on FDCPA? Providing context is not a small accomplishment.

The report also noted that complaints against collectors do not mean that laws were actually violated or that the complaints were even valid. It is about time! The ACA has been fighting this fight on behalf of the collection industry for quite some time. Kudos to Rozanne Anderson, the ACA’s executive vice president and general counsel, and to the ACA for their efforts on this front.