Yesterday NBCnews.com ran a story by consumer columnist Herb Weisbaum about military families being targeted by debt collectors.

We’ve seen this before. Numbers from the CFPB’s monthly complaint snapshot are quoted, and debt collection came out on top. In this case, the report highlighted servicemember complaints, which then leads to national press about servicemember complaints. The story begins by summarizing some of the common complaints: It’s not my debt; they called – or threatened to call – my commanding officer; or it’s a medical debt that should have been covered by insurance.

And then the article highlights a 2015 CFPB action against an auto lender for illegal debt collection practices. An auto lender; not a debt collection company. But the headline says “debt collectors.”

What is somewhat different about this article is that it devotes nearly half of its content to industry response, in this case provided in part by ACA International’s vice president of public affairs, and in part by the president and CEO of the Consumer Data Industry Association.

In both cases, more than one quote/suggestion is used, not only the “one bad apple” argument that seems to generally fall flat. At least the writer in this case took a small extra step to provide context, which typically does not happen.

insideARM Perspective

For years, the industry has offered the “one bad apple” defense. It hasn’t been effective, I think in large part because it doesn’t ring true; So many people can tell you a story about a negative experience they (or a friend or family member) have had related to debt collection.

What isn’t typically explained by the media is the underlying story about what tends to cause the negative experiences (not the egregious outliers, but the lion’s share of the complaints). For instance, the “harassing” hang ups or repeated calls, many of which are caused by the fact that the law so severely limits what kind of voicemail message can be left, that it has become safer not to leave a message but to try to call back. Or the fact that a collector is required to ensure they are speaking with the right person before disclosing any information… but consumers are (rightfully so) cautioned against providing any information before they can ensure that the person calling them is legitimate. A stalemate ensues.

Or, the fact that a debt collector is typically hired by a client (a creditor), who provides them with information about what a consumer owes (most debt collectors, in fact, do not “buy debt for pennies on the dollar”). Often, issues such as identity theft or a dispute over a charge (especially in the case of medical debt) don’t appear until the account has been sent to a third party collection agency.

While we know that some consumer advocates and/or reporters have an agenda that will likely have them stick to the more salacious story, we can and should share actual stories of specifically how debt collectors work. It’s not effective to counter a specific story with a general statement.

At insideARM’s 4th Annual Larger Market Participant Summit later this month, we will be facilitating a discussion between participants and national consumer finance reporters from a range of publications including The Wall Street Journal, ProPublica, and The Capitol Forum (which caters to policymakers and investors).


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