Debt Collection Association Widely Supported Retaining Debt Buyers Classification

To some third-party contingency debt collection agencies the idea of ACA International focusing solely on their business and lobbying needs seemed logical. However, a recent proposal by a state unit to rebrand the accounts receivables management industry’s main lobbying group as a debt collectors group and reclassify debt buyers as creditors didn’t garner much support among ACA’s leadership – at least not this time around.

The proposal failed to pass the initial ACA Board vote. It did not go on to a vote by the general membership based on ACA-established processes.

“Basically, the board of directors believes in our big tent model with a diverse membership,” said ACA International Spokesman Mark Schiffman.

David Sands, president of the New England Collectors Association, which sponsored the proposals, said that trying to be the big tent has failed ACA’s third-party contingency agencies, which make up the bulk of ACA’s membership. He also said that he doesn’t believe it is necessary for ACA to take up debt buyers’ political cause because the group has its own representatives in the Debt Buyers Association.

If the general membership had been given the opportunity to vote on NECA’s proposal as presented to rebrand ACA as “The Association of Collection Agencies” and dedicate itself almost exclusively to third-party debt collectors, ACA’s Asset Buyers Division (ABD) would have been dissolved and current ABD members would have been reclassified as “creditors.”

A second proposal also called for the new ACA to support, and in some cases propose, separate legislation and regulations for debt buyers on the federal and state level. Sands said the shift would have separated collection agencies from debt buyers, and debt buyers from original creditors, effectively creating three distinctly regulated groups.

Sands said the state unit proposed the changes because its membership believes it has become increasing difficult for ACA and its state units to lobby on behalf of debt buyers once they step into the shoes of a creditor. Doing so, he said, exhausts ACA’s resources and creates confusion in the minds of the media, the public, and legislators about the role of each group.

Sands said the confusion about which group pursues aged debt is particularly harmful to third-party contingency debt collection agencies, which primarily collect debt that is about 90 days old and still owned by the original creditors. Sands said that confusion hurts state units when they challenge bills that will hurt third-party collection agencies.

“If you’re trying to support a debt buying bill that strictly deals with passive debt buyers, and it’s not a poplar bill, the media perception is, ‘Aren’t you the guy that fought for that other debt-buying bill?’ A lot of units don’t want to blow their political capital fighting for a debt-buying bill. Unless it affects third-party agencies, I don’t want to be involved.”

Sands said he believes that DBA should be taking center stage in the fight for debt buyers.

DBA Spokesman David Rubinger said it is DBA’s sole mission to represent debt buyers and that the organization does not take any position on ACA’s structure. He added that DBA has worked well with ACA and looks forwards to continuing the relationship.

“DBA and ACA work hand and hand on the most critical issues to the ARM industry. We operate as a separate industry but like to work together to put the ARM industry in the best light,” Rubinger said.

Although NECA’s proposals were voted down, Sands said the proposals were supported by the California, Ohio, Kentucky and Wyoming units and may be restructured and presented again.

“Only time will tell if it was the right decision or not. It may resurface again in another form,” he said.