Tag Archives: risk

DIY Collections – Don’t Risk It!

11 Sep

There are very clear rules about what can and can’t be said during debt collections.

The debt collection industry is governed by so many rules and regulations it could make your head spin. That’s why do-it-yourself debt collections can quickly get a company into hot water with state and federal regulators.

What are the rules that govern debt collections? What are debt collection agents never allowed to say and do? This article explores common mistakes businesses make when attempting DIY debt collections.

Bill Collector

Debt Collections No No’s

Three things you can never say when attempting debt collection:

  • Threaten to tell a boss, coworkers, or family about a past due balance. While you can contact work to try to find the customer, never share details about the debt to any third party.
  • Threaten to arrest the past due customer.
  • Don’t say, “I’ll just keep calling you.” Legally, you can’t call the person before 8:00 am or after 9:00 pm. If you call the customer at work and they ask you to stop calling there, you have to comply, however, the request must be in writing.

Understanding the rules means following federal legislation called the Fair Debt Collection Practices Act and the guidelines set by the Consumer Financial Protection Bureau.

Understanding debt collection rules is important for avoiding federal and state penalties.

If all this seems like a lot of rules for you to keep track of, you would be right. Debt collections are a highly regulated activity that makes it risky to take a DIY approach.

The good news is that there are services like TSI to help ensure debt recovery that complies with all rules and regulations. Our proven system is compliant, effective, and guaranteed.

Bonus Tip:

Various government agencies provide guidelines that help ensure that consumer rights are protected. There are specific practices that collectors must always avoid.  

Debt collectors cannot use unfair practices to collect a debt. This means debt collection practice can never include the following [Do not]:

  • Attempt to collect charges in addition to the debt. That is, unless they are allowed by contract or specific state law.
  • Deposit a post-dated check early.
  • Communicate by postcard.
  • Use language or a symbol on the envelope of a letter that indicates the correspondence is from a debt collector.

Consumers have rights that must be honored, which is why strict guidelines and regulations govern debt recovery practices. Not only is it essential that debt collectors treat consumers with respect, in addition, there are specific practices that collectors must always avoid. For instance, did you know that an individual can send a “cease and desist” correspondence to a debt collector – which means the debt collector is required to stop contacting the customer. The problem stems from an overly aggressive debt collector that goes after the customer over and over again in a short amount of time. Under federal law, this is considered harassment and if the activity continues after the cease and desist letter is received, the customer can report the debt collector to governing agencies.

Want higher recovery of past due accounts? Don’t put your business at risk by using a DIY approach; instead, put TSI’s simple system to work for your business. It’s convenient and designed with small- and mid-sized businesses in mind, AND interfaces directly with most accounting and practice management software.

Contact me for more information on how to:
  • Collect more of your A/R
  • Collect your A/R faster
  • Stay 100% compliant while collecting your A/R
  • Save both staff time and money

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Is Your Collection Agency Putting Your Medical or Dental Practice at Risk?

11 Apr

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The collection agency industry is highly regulated and there are numerous laws on the books designed to protect consumers, which make it more difficult to collect. While it costs agencies more to be legally compliant and hinders their collections efforts, not complying can lead to class action suits and sanctions against the agency (and possibly their clients) that are more costly in the long run if not fatal to the agency’s very existence. Lets examine how this affects your practice.

The Laws You Know

Most Practice Administrators are familiar with the Fair Debt Collection Practices Act (FDCPA) of 1978 which creates a set of guidelines that collection agencies are required to follow as well as penalties for not adhering to the Act. Additionally, practices are familiar with HIPAA laws and the security requirements of Protected Health Information (PHI).

But Do You Know About These Laws?

Despite having been a law since 1991, most practices are not familiar with the Telephone Consumer Protection Act (TCPA)  which also impacts collections. Among other provisions of the TCPA (such as calls can only be made between 8am and 9pm), the TCPA prohibits the use of automated dialers to cell phones or leaving automated messages on cell phones. While auto-dialers represent a technological efficiency that allows a collection agency to make more frequent calls and collect more money, their use is not compliant with the TCPA when the phone number the patient has provided the practice with is a cell phone. In order to be TCPA compliant when calling a cell phone, it must be manually dialed. Even if a live collector will be connected with the consumer upon pick up, a cell phone can not be dialed using a computer.

Medical Collections Impact

A recent data analysis by Transworld Systems, a large national collection agency specializing in medical collections, revealed that 60% of the phone numbers that their medical practice clients are obtaining from patients are cell phones. In order to avoid fines of $1500 per incident and class action suits, Transworld Systems has enforced strict policies of identifying and separating land line numbers from cell phone numbers. Additional research is conducted to see if the patient also has a land line which can be put on an auto-dialer to obtain better contact rates.

What does all this mean for your practice?

Today with the ever-changing federal and state regulations, you need to ask more questions of your collections vendor to find out if they are compliant with all laws. Ensure your practice cannot be named as a co-defendant in a potential class action suit should your agency be accused of being non-compliant. It is important to have a Hold Harmless Agreement in your collection agency contract where the agency agrees to hold your practice free from responsibility for any liability or damage that might arise out of their collection activities. Ask questions first before you have to answer for shortcuts or missteps later that could result in hefty fines for lack of compliance. It is paramount to ensure your company of choice is an expert in their field who stays abreast of, and quickly adapts to, the seemingly endless stream of regulations designed to protect consumers rights, often at the expense of their creditors.

Here is a sample list of questions to ask your current agency and any potential collection agency you are considering working with:

1.    Is your company compliant with TCPA, HIPAA and familiar with state laws regarding collections?

This is not a yes/no question, they should be able to provide additional information including how often their collectors are re-tested for compliance and how their performance is monitored for compliance.

2.    Does your company perform background checks on collectors in required states?

3.    How are cell-phone calls handled?

If they dont maintain a separate policy for handling cell phone calls, that should be a red flag to you to find another vendor.

4.    Do you know what PHI is and what steps do you take to ensure its security during storage as well as communication with our practice?Ask how they receive data from their clients (do they accept secure electronic encrypted data or do they expect you to fax or mail patient files which are more easily compromised?) Do they provide you with a secure website to view collections status and if not, do they at least have the ability to encrypt emails when attaching a list of status updates which include PHI.

5.    Is your company licensed to collect in all states?

Even if your patients are primarily local to your office, sometimes they move out of state and your agency will have to be compliant with the laws that govern the patients new residence.

6.    Is your company bonded and insured?

Ask for copies of the documents proving bonding and insurance to make sure your money wont disappear if your agency goes out of business, either as a result of poor performance or as a result of a fatal class action suit.

Call me at 888-780-1333 for a 100% compliant option that will keep you and your practice safe during these times of changing and ever-increasing regulations.

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