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Staying Optimistic in a World of Compliance Unknowns

  • Written by Debra J. Ciskey

ciskey debra j“It’s snowing still,” said Eeyore gloomily.
“So it is.”
“And freezing.”
“Is it?”
“Yes,” said Eeyore. “However,” he said, brightening up a little, “we haven’t had an earthquake lately.”
- A.A. Milne

I am an optimist. I get out of bed every morning with a smile on my face – after all, I get to see another morning! And we haven’t an earthquake lately!

It is hard to be an optimist among pessimists. Conversations about the future of our industry often have a pessimistic bent. Admittedly, it can be difficult to be an optimist when you are in charge of receiving, investigating, resolving and responding to complaints about your company. Just when you think you are caught up, in come more complaints.

Pessimism, I believe, is built on a fear of the unknown. Right now, there are many unknowns facing the collection industry, including the largest unknown – will our industry exist in 10 years? Our work lives are fraught with unknowns: How many complaints will I get today? Will they be justified or false? Will I get served with a lawsuit today, and will we be able to defend it? Will I get a call from a regulator who decides it is time to audit my company? Will my collectors be able to reach any consumers today, and if they do, will they conduct themselves properly in the process of collecting a debt? Will our clients stick by us when we change practices to meet regulatory expectations? And how are we supposed to know what the regulatory expectations are when the rules aren’t published?

We may not like the indirect method that our federal regulator uses to communicate with our industry – it feels impersonal and almost passive-aggressive. Regulating through enforcement actions and supervisory examinations allows the regulator to attempt to institute changes in industry practices without using the formal processes in place for publication of rules, and that feels like an end-run to us. This approach requires us to infer and make assumptions about the practices of the companies against whom enforcement actions are brought, because we are not privy to the details of the investigation. How can we know whether our practices match the practices of the company who signed a consent agreement? To what degree do they match?

Supervisory bulletins follow the same pattern. The most recent report, published in March, 2016, reported recently that supervisory activities resulted in $14.3 million in restitution to more than a quarter of a million consumers. Restitution was made by debt collectors, mortgage originators, and deposit institutions. No details are provided, leading us only to speculate.

The same bulletin described several issues it observed and directed debt collectors to correct during supervisory examinations. These issues included the failure to honor consumers’ notification to the debt collector that they refuse to pay a debt or to cease communication with them, and the use of false, deceptive or misleading representations regarding garnishment in connection with the collection of student loan debt. While few details are provided, this information should trigger a review of our policies and procedures in our offices related to these key compliance areas, and a review of the performance of duties related to them. Consider whether you have added staff or transferred duties so inexperienced people are handling these duties. Has an increase in workload had an effect on the ability of staff to properly follow procedures? If nothing else, the supervisory reports can serve as a catalyst to look under the covers, even if the result is a stronger sense of confidence that we really are doing things right. It still feels like fishing in the dark, doesn’t it? Don’t forget that the issuer of these reports expects us to infer expectations from the sections of the report that are not directly descriptive of our industry. Fishing in the dark with a bamboo pole in a rubber life raft in the Pacific Ocean without a life preserver.

How can I remain an optimist in the midst of these unknowns? I still like to think that legitimate debt collectors are problem solvers. Most of us want to do the right thing. We accept the challenge, identify and correct wrongs, and demonstrate our best efforts. Rather than begrudgingly going along to get along, we can seek new tools, develop new processes, and find common ground with our regulators that will elevate us to new levels of performance for our clients and satisfaction for consumers. I’m not waiting for my earthquake, and I’m hoping I can prevent it.


Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.