Report Distorts Student Loan Debt Collection: ACA International

ACA International, the Association of Credit and Collection Professionals, strongly disagrees with a recent report from the National Consumer Law Center (NCLC) on the student loan debt collection contract between the U.S. Department of Education and private collection agencies.

ACA said in a statement Wednesday that the report paints an inaccurate portrait of debt collection created to further NCLC’s agenda. In the report’s executive summary, NCLC notes that “a long‐term solution is that the Department should simply stop using collection agencies.”

“In recovering delinquent or defaulted student loan debt on behalf of the Department of Education, collectors are proud of their exceptional customer service and efforts to return tax dollars to American taxpayers,” said ACA CEO Pat Morris.  “Our members have a fundamental belief that consumers, regardless of the type of debt being collected, deserve to be treated respectfully and lawfully.”

NCLC’s report focused mainly on complaints against ED debt collection contractors. Among its recommendations was to make the complaint system more accessible to consumers and base collection agency compensation on complaints received.

“We take consumer complaints very seriously and agree on the importance of protecting consumers against businesses that engage in deceptive, unfair or abusive practices,” said Morris.  However, the report, which relies more on assumption and personal opinion than fact, fails to paint a clear picture about consumer complaints against the third-party debt collection industry.”

ACA noted that complaints against debt collection agencies are rising due to a number of factors. As more debt is entering the third-party debt collection system, collectors are making more contacts, leading to more complaints. This is especially exacerbated in the student loan market as education costs soar. New technology has also made it easier to make complaints, the result of which is complaints rising against all businesses, not just debt collection agencies.

“Collectors want to resolve consumer complaints,” said Morris. “Debt collectors want to work with consumers to resolve complaints but can’t under the current FTC model. ACA members plan to work closely with the Consumer Financial Protection Bureau to resolve issues presented through the bureau’s proposed complaint resolution system for debt collection complaints.”

According to the BBB, which has a complaint resolution model, debt collectors resolve 83 percent of the complaints received; significantly higher than other industries.

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