Navigating and Surviving the Jungle of Collections:  What Educational Institutions Need to Know! Presented by Harry A. Strausser III Collections Industry Consultant Interact Training and Development

State of the Industry Continued Economic Crisis Fallout Change in credit perception and use Legal environment Regulatory environment

Regulatory Review Fair Debt Collection Practices Act (FDCPA) State/Municipal Collection Regulations Fair Credit Reporting Act (FCRA) Gramm Leach Bliley Act (GLBA) Health Insurance Portability Accountability Act (HIPAA) Consumer Financial Protection Agency (CFPB) now the Bureau of Consumer Financial Protection (BCFP)

State Collection Laws “Individual states have bonds, permits, licenses and trust accounts for agencies and creditors”

Fair Credit Reporting Act (FCRA) “A federal law that governs creditors, agencies and any entity that reports, accesses or distributes consumer credit data”

Gramm Leach Bliley Act (GLBA) “Federal law mandating financial institutions disclose their data use procedures annually to customers”

Bureau of Consumer Financial Protection Launched as the first government agency solely dedicated to consumer financial protection. The name was changed from the Consumer Financial Protection Bureau.

BCFP Authority Includes: Prescribe rules related to debt collection Issue guidance concerning compliance with the law Collect complaint data Educate consumers and collectors Undertake research and policy initiatives related to consumer debt collection.

What is the Perception of What we do? An evolved stigma surrounds the collection representative The cocktail party encounter Reactions to our profession Any profession less respected?

Group Exercise What do you like about the collections process? What don’t you like about the collections process?

Are You Prepared? Do you have a well-defined credit policy? Do you have a well-defined collection policy? Have you instilled a “culture of paying” within your organization?

Credit Policy Who gets credit in your institution? Do you have a credit policy in writing? Have you seen it lately? Does everyone in your office enforce it? Are credit decisions out of your control?

Collection Policy Do you have collection notices? Do you make collection calls? Are notices or calls more effective? What steps are taken according to age and balance of your accounts? When to place with your agency.

Do you really know your collection agency?

For what services do you use your collection agency?

Questions you should ask: How long have they been in business? Who are the principals of the company? Where are they located? More than one location? Do they belong to ACA International Inc, the association of credit and collection professionals?

Questions Continued: Are they active with any other industry trade associations? Do they represent other schools? How do they educate staff members? Do they offer educational programs to clients?

Service Agreements It is a good idea to have a signed service agreement with your agency which may include: Rates Available reporting Regularity of remittances (gross or net) Indemnity clauses Term of agreement (evergreen clause?) Termination clauses

Is Your Agency Compliant? Are they conversant on the Fair Debt Collection Practices Act? Do they follow the Fair Credit Reporting Act? Are they familiar with TCPA rules? Do they use a dialer to call consumers? Are they registered for the BCFP complaint portal? Do they leave messages for consumers?

Ask for Copies of their Standard Operating Procedures for: Bankruptcy Call monitoring Cease and desists Clean desks Data security Deceased consumers Disciplinary procedures Disputes Electronic payments Meaningful Attorney Involvement Money Laundering Out of statute Debt Phone messages Post dated checks Recorded line disclosures Right party contacts SCRA Policy Use of alias Vendor management Visitor policy

Conduct an onsite Visit!

“A Culture of Paying” “Enforcing credit policy, adhering to collection policy, asking for payment, and consistent follow up”

What are the challenges of the collection process at your institution? Group Discussion What are the challenges of the collection process at your institution?

Group Discussion What are the most common student problems that lead to delinquency in your institution?

Group Discussion What techniques do you use to guarantee payment and reduce broken promises?

STALLS AND OBJECTIONS!

THE STALL An excuse for nonpayment An attempt to buy more time

THE OBJECTION An actual reason for nonpayment felt justified in the mind of the student

Group Discussion What are the most common stalls and objections you have encountered in your financial office?

Motivated collectors….. ……are successful and happy collectors.

A Team Philosophy….. …is key to the success of the collection program. Everyone in the financial office must share in the responsibility for developing an effective recovery program.

Thank You! Harry A. Strausser III Collections Industry Consultant Interact Training and Development harrystrausser@gmail.com 570-336-7056