Debt Collection

Challenges
Leader's Guide

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Suggestions For Using This Program:

Get set for a great training experience! This DISCUSSION CATALYST™ program will help set the stage for
your group to have a meaningful meeting on the topics they're about to see.
You'll notice that the DISCUSSION CATALYST™ format is especially useful when the subject matter is
related to your organization's unique policies, as opposed to dealing with universally acceptable skills or
techniques.

Before you begin, start by letting your group know the ground rules: They'll watch each scene, stop the
program, then talk about what they just saw. After your discussion, the presenter, Nancy Friedman, will be
back with some thoughts.

The goal is to help them understand the policies at your organization. In many cases, it'll be up to you to
help build consensus and aim your group to arrive at the proper outcome.

Open-Ended Questions/Phrases:

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Use these immediately after stopping the program. Examples include:
1. "What did you think about that?"

2. "Tell me what you just saw."

3. "That was interesting; what was your take on it?"

4. "What were your initial impressions?"

5. "How did that scene make you feel?"

Open ended questions will get your group talking. Once you've gone around the room, focus your questions
by using the suggested questions for each vignette in this leader's guide.
Brainstorming:
Although it's important to have an overall agenda and keep your discussion on track, it's critical in any
brainstorming session to resist passing judgment at individual suggestions, no matter how "different" they
may sound. Phrases that might assist you include:
1. "That's interesting; tell me more about what you mean."

2. "I hadn't considered that angle yet."

3. "Okay, thanks for sharing that with us."

4. "That'll be one of the things we need to consider."

5. "I really like your insight."

6. "That's sure a unique perspective. Who else has some ideas?"

Take Control:
While group input is key, the objective for your session is to have your team be clear about your
organization's unique policies. An effective group leader will manage the comments from the group in such a
way as to lead your trainees down the path they need to go.
Good luck and have fun! Please direct feedback about this program to info@telephonedoctor.com.

IMPORTANT: This training program is not meant to present a complete account of the Fair Debt
Collection Practices Act. These vignettes were developed as a tool to assist in educating your employees.
The goal is to help them recognizing some of the pitfalls of professional collections. The content of the video
program and/or its leader’s guides are not a substitute for legal advice. In the event legal advice is
necessary, consult your attorney. Telephone Doctor, Inc. shall in no event become liable for the
interpretation or use of its materials by the end user and user waives all recourse against Telephone Doctor,
Inc.
The FDCPA - The Fair Debt Collection Practices Act was enacted in 1977 by Congress. Here's the
actual wording from the Act on why FDCPA was needed.
15 § 802. Congressional findings and declaration of purpose
USC
a. There is abundant evidence of the use of abusive, deceptive and unfair debt collection
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practices by many debt collectors. Abusive debt collection practices contribute to the
number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions
of individual privacy.

b. Existing laws and procedures for redressing these injuries are inadequate to protect
consumers.

c. Means other than misrepresentation or other abusive debt collection practices are
available for the effective collection debts.

d. Abusive debt collection practices are carried on to a substantial extent in interstate

commerce and through means and instrumentalities of such commerce. Even where
abusive debt collection practices are purely intrastate in character, they nevertheless

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 directly affect interstate commerce.

e. It is the purpose of this title to eliminate abusive debt collection practices by debt
collectors, to insure that those debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged and to promote consistent State
action to protect consumers against debt collection abuses.
More about the FDCPA
The FDCPA is a Federal Law, so it affects collectors throughout the nation who collect consumer debts,
meaning debts, which were for personal, family or household purposes. Originally the Act only applied to
collection agencies, but later was expanded to include collection attorneys and in some instances to even
affect creditors. Some states have passed their own Debt Collection Practices Acts and many of these state
laws are stricter than the Federal Act. The Fair Debt Collection Practices Act doesn't just ask collectors to
"Be nice." It requires some very specific language and if the collector fails to comply, the violation can have
very costly consequences.
Why the Discussion Catalyst format?
This format has been billed as a particularly effective training tool. We have received comments that single
out various factors that increased the effectiveness.
These factors include:
1. Active participation vs. passive video watching; participants stay alert, involved through spirited
classroom discussion.

2. Customization of delivery to include company specific information.

Compliance with the FDCPA is one component of the policies and procedures unique to every
organization. This format allows the skilled presenter to incorporate sometimes mundane
policy/procedure manual information into a fun, creative presentation.

3. Through active involvement, participants become a part of the decision-making implementation of a

solution resulting in much greater "buy-in"
Basic Assumptions
This video assumes the following:
1. All debtors are being called about consumer debt, not business debt. Business debt is not covered
under FDCPA.

2. The initial contact to the debtor carried the information that you are a debt collector attempting to
collect a debt and that any information obtained will be used for that purpose.

Dan Kramer, a partner in Kramer and Frank, a firm specializing in collections, well known
throughout the collection industry, calls this the mini-Miranda. It's a mandatory notice that the
debtor needs to be advised of the fact that you're a debt collector.

3. Because your company may have specific policies and/or your state's collection laws may be more
stringent then FDCPA. Please add to the observations and comments as befits your specific
situation.
Scene #1:
We saw Joe make a collection call to Oscar Champion. What comments do you have about Joe's attitude?

1. Negative before he made the call.

2. Condescending and sarcastic to Oscar.

3. Aggressive and not very friendly or conciliatory.

What questions could Joe have asked Oscar to build a better rapport?
1. How is his son? Is his finger in a cast?

2. How much did the bill run on the hospital emergency room?

3. Does Oscar have any medical or health insurance to help cover the emergency room bill?

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Oscar mentioned his wife. What questions should Joe have asked about Oscar's wife?
1. Does she work too?

2. Where does she work?

3. What does she do?

What do you think about Joe calling Oscar at work when he's been asked not to by Oscar?
1. It's not determined if Oscar's employer has forbidden these collection calls. It looks like the
employer has, because Oscar looked around nervously, to see if he was being overheard. Oscar
also said he didn't want to lose his job or he couldn't pay his bill to Joe. If the employer has
forbidden these collection calls, and Oscar asked not to be called, that's a violation of FDCPA.
Scene #2:
Cynthia called Cathy at 7:30 A.M. because she wasn't able to reach Cathy on prior calls. Is that a good
idea? Or violation of the FDCPA?

1. A violation of FDCPA. No calling of debtors before 8:00 A.M.

The 8:00 A.M. calling time. Is that based on the time in the city of the collector or in the debtor's local time?
1. The debtor's local time.
Cynthia threatened to take away Cathy's car to convince her to pay. Is that legal or not?
1. It's illegal - a violation of FDCPA. Cathy's car had nothing to do with the debt to Logimax or a phone
bill.
Cynthia and Cathy's conversation became heated. Is that a good idea, because it would cause Cathy to pay
and get rid of the aggravation? Or is it a bad idea that could hinder future attempts to collect?
1. It's probably a bad idea. While different people respond in different manners, the chances are if
Cathy has limited funds to pay debts, she'll pay someone else more and Logimax less, or not at all.

2. Getting the debtor angry usually stiffens their resistance to paying the balance in a timely fashion.
Scene #3:
Joe called Mr. Nichols at Dot.com Enterprises. In fact, he called him several times that day. Was that a good
idea or a bad idea?

1. Bad idea. He might possibly be guilty of harassing the debtor.

2. If so, that's a violation of FDCPA.

The receptionist at Dot.com Enterprises, after receiving numerous calls from Joe, recognized his voice. She
then asked what the call was in regard to. Joe told her about the debt and amount. Any comments?
1. It's illegal to tell a third party about the debt and amount. FDCPA violation.

2. The receptionist was routinely screening the call as she has been instructed to do. She probably
asks most callers "what's this in regard to?" Joe's answer should have been something like "it's a
personal matter."
When Joe reached Mr. Nichols about his personal cell phone bill, Mr. Nichols reminded him that he had
instructed Logimax Financial Services people to talk to his attorney. Joe had tried numerous times, but the
attorney hadn't called him back. Was Joe justified in calling Mr. Nichols again?
1. He was not justified in calling the debtor back. Having been told to talk to Mr. Nichol's attorney and
going back to the debtor is a violation of FDCPA "unless the attorney fails to respond under a
reasonable period of time to the communication from the debt collector." Joe's calls to the attorney
appear to be made in a period of weeks, not months, which would probably be construed as a
reasonable time.

2. The information that the attorney, Mr. Sterling was out of town could probably have been verified by
simply asking whoever answered the phone at Mr. Sterling's office, if he was in or out of town.
Scene #4:

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We watched Cynthia call Karen. Cynthia implied that she was with a law firm. That was inventive, but was it
legal?

1. It's a violation of the FDCPA, to imply you're with a law firm or that you're a lawyer.

2. Not using the correct name of her employer, Logimax Financial, is another violation of FDCPA.
Was Cynthia required to tell Karen that she was a debt collector?
1. Yes, this appeared to be a first contact and FDCPA requires the use of what many in the industry
call, the "mini-Miranda."
"I am a debt collector, attempting to collect a debt and any information obtained will be used for that
purpose."
Cynthia talked about affecting Karen's credit rating in her role as an employee of the law firm. Is that legal or
illegal?

1. Since this whole role is false representation and/or deception, this is another FDCPA violation.
Scene #5:
We watch as a debtor calls in to talk to Joe. That's the good news. The bad news is he's calling to advise
he's filed for bankruptcy. Joe still attempts to collect something on the bill, as long as he has the debtor on
the phone. Is that a good idea or a bad idea?

1. Bad idea. If a debtor has filed, the collector can't take a chance of violating, not FDCPA, but the
Federal Bankruptcy laws.

2. At this point, the collector needs to find out if the debtor filed bankruptcy papers by himself or if he
had an attorney do it. Otherwise, we may be getting lied to.

3. If an attorney is involved, what's his or her name? Address? Phone number? Is this particular debt
you're trying to collect listed in the bankruptcy petition? It's time for verification of the debtor's
statements whether he filed bankruptcy papers himself or had an attorney do it.
Scene #6
Cynthia calls and wakes up Kenny at 2:00 PM. Kenny goes from being hostile to being very hostile and
insulting to the collector. With the debtor getting angry and being unreasonable, was Cynthia justified in
getting angry right back at Kenny?

1. It's hard not to respond to the insults and poor attitude of the debtor but it's not productive. Cynthia
losing her temper only stiffened Kenny's resolve not to pay and gave him an excuse to hang up.
How should a collector handle an angry and abusive debtor?
1. Cynthia needs to stay cool as difficult as that is. She can't take it personally and let the debtor
poison her mood. She should get even by collecting, if at all possible.
Cynthia did a number of things right on this call. What did you notice her doing worthy of comment?
1. She knew Kenny was a tough customer; a tough call to make, but she bravely did it anyway.

2. Cynthia was cheery and pleasant most of the way through the call. She was hoping her mood
would be contagious; unfortunately, his mood was the contagious one.
What will the probable effect of the conversation be?
1. Kenny will remember it vividly.

2. Logimax will probably be paid last or not at all. Kenny's attitude now will likely be that paying will be
caving in and he'll show Cynthia and Logimax how stubborn he can be.
Scene #7:
Joe reaches a debtor who wants some clarification of his debt. He requests a written statement be mailed to
him. In fact, the request has been made before. How should Joe handle this situation?

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 1. Joe breezed right past the request and ignored it. That violates FDCPA.

2. He should apologize for not having it sent out before and should have one sent out promptly.
What about the debtor's request for a copy of his "debtor's rights?"
1. Joe slipped past this request too. The debtor is entitled to that information too.

2. Joe should have all requested information mailed out promptly.

Scene #8:
Cynthia calls Judy Davis about her past due cell phone bill. In discussing the balance, Cynthia pads the
balance by $100. Judy is shocked and keeps returning to the true balance at $100 less.

Finally Cynthia offers to waive the extra $100 if Judy will pay with her credit card right then. What do you
think of this seemingly effective technique?

1. It's dishonest and deceptive.

2. It's a violation of FDCPA.

What About Cynthia's mild threat to call Judy's boss and garnish Judy's wages? Your comments, please.
1. Cynthia doesn't have the right to garnish Judy's wages. A court does that. Cynthia also shouldn't
make that threat. FDCPA violation.

2. Cynthia seemed to be accommodating and reasonable, but she was using underhanded methods.
We hope you and your attendees found this program to be educational and entertaining.
Thank you.
Dick Friedman
Vice President
Telephone Doctor®