Jay Gonsalves | Check yourself: Consumers pay the price for Congress’ poor decision

When a bounced check for $14 ends up costing a consumer nearly $300 to pay back and leads to harassment and scare tactics from the company trying to recoup the debt, somebody needs to say something.
Our trade association, ACA International, has been doing exactly that for the past three years in an effort to get an unwise amendment to the Fair Debt Collection Practices Act (FDCPA) repealed.

You don’t have to be a debt collector – as more than 3,500 of our member agencies are – to know that the check diversion program Congress agreed to exempt from the FDCPA back in 2006 spelled trouble from the beginning. Along with forcing consumers to pay more than $150 out of their own pocket to attend a financial management course, the amendment essentially gave collection companies like American Corrective Counseling Services (ACCS) a free pass when it came to adhering to the FDCPA. This is rather ironic considering the FDCPA was designed to protect consumers from the very type of unethical and illegal harassment ACCS has been repeatedly accused of by consumers in numerous lawsuits over the years.

CNN.com’s March 2 story, Bounced-check collection deals draw fire, is only the latest example of why check diversion programs such as the one being run by ACCS should never have been exempted from the FDCPA in the first place.

ACA International has stood in accord with consumer advocacy groups and others in opposing Congress’ 2006 decision to change federal law and allow district attorney’s offices to contract out bounced-check collections to private collection firms like ACCS.

Not only does the current arrangement lead to mistreatment and needless financial hardship for consumers whose only crime may have been accidentally bouncing a check for a large pizza, but it also takes away the level playing field created by the FDCPA for ethical debt collectors.

Our association will continue its efforts to ask Congress to repeal this ill-conceived amendment to the FDCPA, and in the meantime our association is unveiling a brand new, completely free consumer education Web site called Ask Doctor Debt. One of its many financial literacy tools is a free financial literacy Web course that district attorneys and companies like ACCS are currently forcing consumers to pay $160 to take.

Contrary to the negative stereotypes so often associated with our industry, the members of ACA International – representing thousands of agencies and tens of thousands of individual collectors – strive to treat each consumer with dignity and respect, along with making available – free of charge – the financial literacy and education tools consumers need in order to make informed choices.

It is our sincere hope Congress makes the same informed choice and repeals the check diversion program amendment to the FDCPA before more consumers suffer the same fate as those described in CNN’s recent story.


Jay Gonsalves is the President of ACA International, The Association of Credit and Collection Professionals and President of Action Collection Agency of Boston.

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