Over the summer the Consumer Financial Protection Bureau (CFPB) released an outline of proposals for much stricter debt collection regulations. The proposed rulemaking was announced in conjunction with the publication of a “Study of Third-Party Debt Collection Operations” report, which analyzed survey data from agencies regarding the operational costs of debt collection.
Many operators in the accounts receivable management (ARM) industry have been tying down their operations to brace for the hurricane force winds of change that have pummeled the industry in recent years. 2014 proved to be a continuation of new perspectives, regulatory turmoil, increased litigation by the consumer bar and internal office modifications as we look for common ground, understanding and agreement of how our industry should perform our services.
A big change is coming for debt collections. FICO has announced that its newest scoring model, FICO 9, will disregard paid collection agency accounts and will place a lower weight on medical debt. Under the new score, those consumers with only medical debt on their records are expected to see an average score increase of about 25 points.