Credit reporting is a powerful tool used in aiding the collectability of accounts. Consumers and patients are often compelled to pay due to the possibility of something affecting their credit score and report. But changes are coming to the way we report to credit agencies. If you are a credit reporting client, you might be affected by this.
Consumer Assistance Plan
In 2015, Equifax, Experian, and TransUnion announced the National Consumer Assistance Plan to enhance their ability to collect complete and accurate consumer information and provide consumers more transparency when interacting with consumer reporting agencies about their credit reports. The plan was announced after cooperative discussions and an agreement with the Attorneys General of multiple states. Under the plan, the three companies are taking a number of steps to improve data accuracy and quality and make it easier for consumers to understand their credit information. The companies are implementing the plan over a three-year period with full implementation of the plan expected by March 2018. What does that mean for our clients?
What it Means for Businesses
The important matter at this point is that we determine what you, as our client and the original creditor, specify as the date of first delinquency. The date of first delinquency must be a date prior to bad debt placement with PRC (Revco Solutions). Medical debts won’t be reported until after a 180-day waiting period from the date of delinquency to allow insurance payments to be applied. The credit reporting agencies will also remove from credit reports previously listed medical collections that have been or are being paid by insurance.
If we are currently credit reporting for you, we will follow this directive, beginning September 15, 2017, based on what you determine is your date of first delinquency.
Letters and forms have been sent to our clients that will be affected by this directive. If you are in need of help determining your date of delinquency, or need further clarification on this, please contact PRC (Revco Solutions)’s Chief Client Officer John Cook.
Things are always changing in the collection industry. If your collections department is planning ahead for 2017, here are some federal and state legislative items to keep in mind.
Donald J. Trump
The President-Elect will be in office shortly and it’s anticipated that while the Dodd-Frank Act is not going to be rescinded entirely, it will be weakened from its hyper-regulatory state. Even still, the CFPB will likely submit rules to the collection industry prior to any changes taking place to the Dodd-Frank act. We can anticipate the new rules will be forthcoming shortly.
ACA International, Chamber of Commerce v FCC
This case was argued October 19, so we may see a decision on it shortly. ACA International argued that under the current opinion of the FCC, the definition of an autodialer is too broad as every smartphone can technically be considered an autodialing device.
California A.B. 2251
Starting on July 18, 2018, student loan services will be required to submit criminal checks to the state for licensure. Also under this law, upon receipt of a payment-related dispute, the service shall not report to credit reporting agencies for a 60-day period.
Tax Collections
Private collections agencies will begin collecting for the IRS in the Spring of 2017. This should be interesting.
Credit Reporting on Medical Debt
Many of the points below (from a CBS Money News article) will be coming to fruition in the 2017 year, as CRA’s are required to comply with the tenets of a class action within three years and nine months of the day of a class action suit.
- Each credit bureau must notify the other bureaus if it finds a mixed file.
- Credit reporting agencies and data furnishers must use a more detailed system for sharing information.
- Data furnishers cannot add information about fines or tickets to credit reports.
- Credit bureaus must wait 180 days from the time medical debt is reported to add the account to a credit report, allowing consumers time to address the bill with their insurance and care provider.
- Debt collectors must provide the original creditor’s name and details of the debt before an account can appear on a credit report.
- Consumers who succeeded in disputing an item on their credit reports can get an additional free credit reports from the bureaus.
- The bureaus must also increase their efforts to educate consumers about their access to free credit reports, while also minimizing marketing of paid products to consumers trying to access free information.
Not sure about what this means for your company’s collection efforts? Contact us for help.