Customer Service – When Less May be More

Traditionally, “customer service” meant paying more attention to the consumer. However, in some cases it may actually mean paying less attention – at least from a human to human perspective. A different form of service is increasingly being requested – self-service.

At one time, customer service representatives were the primary provider of information and consumers needed to contact them as a key source for that information. Now that same information is often just a click away. Additionally, a company representative was almost always needed to complete a transaction.
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Handling Collection Disputes

After another successful year of studying (with a pinch of parties) at the University of San Diego, Credit Consulting Services welcomed its favorite intern back for another summer!  My role at CCS this summer has been similar to last summer, but I have taken on additional tasks.

Last summer I was pumping out more blogs and working with the social media side of CCS. This summer I have continued working in marketing, and also helped implement the company’s Client Relationship Management (CRM) database.  CRM allows CCS to identify and manage creditors who need help with their accounts receivable.  As a social butterfly with a creative mindset I enjoy working with the marketing aspect.  Unfortunately not all of my work is fun and games.

frustrated-internet-marketerThere is one particular task I find tedious yet eye-opening: consumer’s disputes on accounts.  This is my first hands-on experience with disputes.  Some consumer’s disputes are valid and the debt is not their responsibility.  More often than not, though, consumer’s disputes are not valid and the consumer knows full well the debt is his/her responsibility.  In my experience in the debt collection industry I have concluded that some people simply don’t want to pay their bills.  For instance, I have come across consumers with various accounts that they dispute multiple times.  A consumer with various accounts clearly has no desire to pay their bills.

I returned to CCS at the end of May, immersing myself into the not-so-wonderful world of e-OSCARE-OSCAR is a program developed as an online solution for processing Automated Credit Dispute Verifications (ACDVs).  It helps CCS process disputes and also helps consumer’s dispute accounts.

Using e-OSCAR and our system in place at CCS, I verify that the information between the two is correct.  Sounds exciting, right?  Although it is less than riveting it is extremely important to CCS.  If a dispute is ignored by the collection agency, the account is deleted from the consumer’s credit and the bill is never paid to the creditor.  Agencies are also at a constant risk of lawsuit if they do not comply with the Fair Credit Reporting Act (FCRA).  Just in the past year FCRA cases increased 22.7% according to ACA International.

Just how important is e-OSCAR? Well, I and another individual spend at least some, if not all, of our work day responding to these disputes.  Between the two of us, we found that at least 95% of the disputes are unfounded.  Even though nearly all disputes are erroneous, the FCRA requires ALL disputes be responded to within a 30 day window.  If not responded to, the credit account will be deleted.  Consumers hope a collection agency is neglectful so their account will fall through the cracks and be forgotten.  At CCS, no dispute is ever forgotten! In fact, we respond to disputes well before the end of the 30 days.

I must reiterate my final point from Collection Disputes: Good Faith or Bad Faith?: if you have a legitimate dispute, respond within 30 days of receiving the statement from the creditor or the first demand letter from the collection agency.  Do not dispute the bill simply because you did not pay and want it removed from your credit report to get a better credit rating, which falsely misleads the lender into believing you pay your bills on time.

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Collection Disputes: Good Faith or Bad Faith?

Less than 5% of disputes are valid.  Disputing debt to a collection agency is a lot like pleading not guilty to a murder trial when the victim has come back from the grave as a witness.  Both are a waste of time and resources for all parties involved.

What is a dispute?  Under the Fair Debt Collection Practices Act (FDCPA), a consumer has the right to dispute the validity of their debt due.  A dispute can be verbal or written.  A written dispute is the more common of the two because it is a non-confrontational form of dispute.

Grinch 1The internet is a beautiful thing.  The amount of information one can find online is astounding.  On the flip side, that information can be misleading, especially when it comes to disputing debts.  For instance, consumers often find that a collection agency needs to validate the debt.  This is true only within the 30 day window after the consumer has received the first demand letter from the collection agency.

The consumers do their own research knowing that they do, in fact, owe the debt.  They find that they can write a letter to the collection agency hoping the debt will be dismissed and the account will vanish into thin air.  A reputable collection agency will not just dismiss the debt, but do their due diligence and make sure that the debt is in fact in need of repayment.  At Credit Consulting Services, we pride ourselves in reviewing documents thoroughly.

Invalid disputes are a hassle not only for a collection agency, but also for the consumer.  The consumer knows they owe the debt.  They try to dispute it in an attempt to get it removed from their credit even though disputes can negatively impact credit.  The consumer goes through the trouble of composing a letter themselves, or more likely they find some general form letter to use while surfing the web.  That letter can then be sent as “registered mail” which costs the consumer about $6.  That money could’ve been used to repay part of the debt!

Disputing debt does nothing to improve a consumer’s credit score.  Also, bad debt affects the economy as a whole.  When a consumer does not alleviate their debt with a creditor, the creditor has to raise prices in order to pick up the slack the consumer created through their debt.  So this individual’s debt hurts other consumers as well.  Disputing not only affects an individual, but it has a domino effect and hinders other consumers.

ConfusedWe live in the 21st century, and if a debt is truly not valid wouldn’t you pick up the phone and call the agency or creditor to try and get things figured out?  A true dispute happens immediately after the first bill is received by the responsible consumer who pays their bills on time.  Invalid disputes can occur months or even years after the bill is received.  Consumers with wrong intentions do not dispute the debt until it affects their ability to borrow money.  It is quite simple, the debt is either owed or it isn’t.

At the end of the day, if you have a legitimate dispute, respond within 30 days of receiving a statement from the creditor or the first demand letter from the collection agency. Do not dispute the bill simply because you did not pay and want it removed from your credit report to get a better credit rating, which falsely misleads the lender into believing you pay your bills on time.

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