Debt Collection and the USPS


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This article, written by insideARM Education Director Mike Bevel, is part of the iA Think differently series. Written by or recorded with members of the iA Innovation Council, the article and video series showcases thought leadership in analytics, communications, payment and compliance technologies for the accounts receivable management industry.

Friends, I am worried about the US Postal Service.

We haven’t been nice to this in the past (all those “post” jokes that were never funny), and it hasn’t always been nice to us (who haven’t had anything lost in it). mail?), but it’s in the Constitution that we have, a postal service, and things are brewing with that that collection agencies should start to think about.

Putting all politics aside (even though La Poste is a political entity), here is the problem as I see it:

The USPS has recently undergone some changes affecting the reliability of timely delivery. Current Post Minister Louis DeJoy acknowledged general slowdown in mail delivery. This puts some consumers at risk, especially if they have a payment that must be received by a certain date, or others who rely on the mail for their medications.

But I’m also concerned about the effect on the industry of consumer debt.

If you’re an agency that sends out physical initial validation notices to consumers, it’s about time (say eight months ago), you might assume that it would take up to 3 or 4 business days to reach the consumer. If you sent the letter on a Tuesday, you can expect the consumer to receive the letter by that Friday. Once the consumer receives the notice from your agency, they have 30 days to respond if they think the debt is incorrect – wrong amount, wrong consumer, wrong account, etc. So the algorithm can be Friday + 30 days with no response from the consumer equates to the date on which collection efforts can begin in earnest without the risk of overshadowing.

But let’s say the consumer does not have receive your notice in the mail on Friday. Or Saturday. Or even Monday. What if, due to current delays in postal deliveries (in addition to a pandemic with sporadic quarantines), the consumer does not receive it until the following Tuesday – a full calendar week since you sent your initial notice. Now the algorithm is a week after Tuesday, plus 30 days.

But you won’t know. You will not be alerted by mail that your letter has been delivered.

There is something called “the mailbox rule”. Reduced to its essence, the letterbox rule states that mail in a letterbox, brought to the post office, deposited in a post office bin or delivered to a postman, has the presumption of delivery. “Right now the ‘letterbox rule’ has reassured me about the presumption of receipt,” says Manny Newburger, founding shareholder and vice-chairman of the Barron & Newburger law firm. “But I was concerned that a court would find that the reliability of the postal service has dropped to a point where the rule is no longer valid.”

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And that’s also where my concern lies. You might have followed 1692g to the letter (heh), like you are supposed to. And the proof would be valid in court if that was the only problem. It is these 30 days that the consumer has to respond that obliges me to invite you to think about it a little more. If the consumer does not have to receive the letter on the date your agency assumed to be the delivery date (which is not the same as the mailbox rule – the mailbox rule, again, only states that the mail has received in any of the above methods will be delivered. But you can’t say that the date you send the review is the date the consumer receives the review (unless you send an email – and we’ll get to that). And the consumer has 30 days. What if your collector calls within that 30-day period because they are tricked into believing that they are able to pursue collection, because your company’s delivery algorithm suggests that the 30-day period for the consumer is complete, they can start collecting attempts when they should not.

Several attorneys I spoke with said that almost any agency would accept a dispute or a validation request even if it is longer than 30 days – but that is not what is at issue here. Indeed, it is very likely that the dispute or the consumer’s request for validation will suffer the same fate as your initial letter: it will be delayed by the same constraints that your initial consumer letter faced.

And it seems to me to eclipse. And it also seems like an easy way for a consumer lawyer to make money.

“I thought about it too,” says Wendy Badger, Special Compliance of Counsel for Ovaile Law Group. “It’s unclear whether the algorithm needs to be adjusted for the validation period, which is counted from the day the consumer receives the notice. I don’t think it hurts to give the consumer a few days / hour. to receive the notice In my experience, most agencies that receive a debt verification request send the information whether or not it is received within the 30-day validation period. “

She then added a new wrinkle to the situation:

“I have a slightly different, albeit related, concern with post-dated payments. The FDCPA specifically says that the post-dated payment reminder should be sent no more than 10 and no less than 3 days before the payment is due. released This is designed to remind the consumer of the payment and to take action to have sufficient funds. With the delays I hear about in postal delivery, even sending it on the outskirts of the 10 days, the payment reminder may not However, since the FDCPA is a strict liability law, which means to comply exactly or be in trouble, an agency cannot post this letter more than 10 days before the due date for payment, as this would constitute a violation.This action is intended to take into account postal delays and would comply with the spirit of the law, which is that the reminder of payment before the payment posts, the agency would always be in breach. we.”

So what to do? I have several suggestions (but should not be taken as legal advice):

1) Add 10 days to your 30 day period for a consumer to dispute before fully attempting collection efforts believing the debt is valid and correct.

2) Use phone calls with consumers to ask if they’ve received your review in the mail.

3) Be generous with consumers whose disputes come after the statutory 30-day validation period.

4) Think more about an email / text approach. This will require detailed thought and planning if you are not doing it already; and you may need to contact industry peers for help making sure all t’s are crossed out and i’s are dotted. (Can I suggest becoming a member of our research assistant program?)

5) For you, the compliance officer, consider adding “USPS” to your Google Alerts list so that you are aware of known issues and planned solutions for this issue.

All predictions are foolish in Our Present Time of Trouble. The USPS can fix things and things will go back to what we were used to. Can the USPS … cease to exist? Allow the free market a chance to better provide this service. But it can also mean increased lettering costs. I wish I could give you a definitive answer, but for now all I can do is share my concern. Let me know if you are also affected.

The IA Innovation Council is a collaborative working group of thought leaders in products, technologies, strategies and operations at the cutting edge of analytics, communications, payments and compliance technologies. Group members meet in person (and lately, virtually) several times a year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit. and establish safeguards for new technologies, and educators, entrepreneurs and innovators outside of the industry who inspire different thinking.

2020 members include:

Absolute Resolutions Corp.

AllianceOne Receivables Management

Alorica

Arvest Bank

in harmony

BBVA

Beyond investments

Billing tree

Capio

Management of capital collection

Citizens Bank

Management of Crown Assets

CSS impact

Dial-up connection

Discover

Improved recovery company

Exeter Finances

FICO

Firstsource advantage

Frost-Arnett Company

Health Income Recovery Group

Hunter’s war field

Intelligence

InvestiNet

Katabat

Livevox

MRS BPO

NCB management services

Neustar

Numeracle

Ontario Systems

Pair

Performant Corp.

Phillips and Cohen

Professional financial company

Global radius solutions

Reborn

Revenge

RevSpring

RSIEH

Capital of Spring Oaks

State collection service

TCN

The CMI Group

TransUnion

TrueAccord

Unifund CCR

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