Accounts Receivable Management Featured Article

The Shocking Truth about the Debt Collection Industry

July 25, 2012

Who likes being in debt? No one. So it’s hardly a surprise that the general public vilifies the debt collection industry – an practice that seems to thrive on kicking you while you’re down.

In fact, ABC News reported last year that, “Debt collectors generate more complaints to the FTC (News - Alert) than any other industry, according to government agency. Last year, there were 144,159 filings against collection companies, the second largest category of complaints to the FTC.”

Here’s the problem: That report is a lie.

Forbes chalks this up as "lazy journalism," and scolds not only ABC News, but the Wall Street Journal, the New York Times and the Huffington Post (News - Alert) for inaccurately depicting the industry, in a recent article entitled, "The Facts behind the Fantasies about Debt Collection Complaints."

Forbes discovered that the Assets Receivable Management (ARM (News - Alert)) industry filed a Freedom of Information Act request with the FTC, asking them to send data regarding complaints filed against businesses in the industry before January 2012.

Using this data, Forbes identified 1,833 out of 4,599 debt collection that received complaints within a two-week period, each company averaging about 2.5 complaints each.

Forbes not only discovered that the majority of the complaints were illegitimate – meaning there were no laws violated – but that the average of 2.5 complaints against the 1,833 agencies, stemmed from out of 19,230,769 contacts. The ARM industry was grateful for Forbes discovery, and the Enhanced Recovery Company issued a press release following.

“In the first quarter of 2012, we managed a portfolio of 19 million accounts, made over 150 million calls and sent over two million letters,” According to the Enhanced Recovery Company. “We feel that the number of complaints received was well within an acceptable range of 0.0003 percent of our active inventory. Despite this, every complaint received is investigated fully by our risk management team…Additionally, we have a quality assurance team that monitors consumer contact on a daily basis to ensure that behaviors that would lead to a poor customer experience are identified and addressed through coaching and development.”

Despite this revelation that the press has contrived negative statistics impairing the reputation of the debt collection agency, there were certain businesses within the industry whose actions were so egregious it casted a shadow over the industry as a whole.

Moreover, headlines such as “Notorious Debt Collection Agency Pursued by Congress and the Press” grab more people’s attention than headlines that read, “Collection Agencies PayVeteran’s Tuition.” And nothing gives people more satisfaction than reading negative publicity associated with their perceived villains.

But as the Enhanced Recovery Company has accepted, “Due to the nature of the work, we cannot expect to satisfy everyone.”


Want to learn more about the latest in communications and technology? Then be sure to attend
ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. For more information on registering for ITEXPO click here.

Stay in touch with everything happening at ITEXPO. Follow us on Twitter.




Edited by Braden Becker

Article comments powered by Disqus

Related Accounts Receivable Management Articles

ICM Introduces a New AP Center Referral Program

Accounting processes can get complex and tedious, if done without right tools and technologies. Thankfully, there are countless solutions that make accounting accurate and easier for users. [ Read More ]
08/28/2014

Wells Fargo Launches Startup Accelerator Program

Helping startups in the financial technology sector to accelerate their business, Wells Fargo will be accepting applications for the new Wells Fargo Startup Accelerator. This semiannual boot camp seeks to help technological innovators in the field of finance who facilitate customers to have smoother operations in areas like payments, deposits, fraud, and operations. [ Read More ]
08/26/2014

LendProtect UK Inks Deal with Engaged CRM

LendProtect UK partnership with Engaged CRM looks to helps financial services analyze lending performance. [ Read More ]
08/25/2014

SaaS Provider Offers Accounts Payable Improvements to Material Handling Company

A global software-as-a-service company that provides enterprise content management solutions through the cloud announced last week that it has opened up a contract with a "leading material handling equipment company." [ Read More ]
08/18/2014
FREE Accounts Receivable Management enewslettter.

Events

Weekly Live Demo
Contact Center Solutions

Register Today!


Weekly Live Demo
CaaS Small Center

Register Today!