The National Consumer Assistance Plan and Its Impact on Collection Agencies

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CCS has been closely following new policies announced by the three major credit reporting agencies, which are expected to roll out over the next three years.  Equifax, Experian, and TransUnion, have created the National Consumer Assistance Plan in response to cooperative discussions and a subsequent agreement with the Attorneys General of thirty states. The intended effect of this plan is to provide consumers more transparency when interacting with consumer reporting agencies about their credit reports, particularly when there are errors which result in negative information being added to credit reports.

As stated by Stuart Pratt, President and CEO of the Consumer Data Industry Association (the trade association representing the three major credit reporting agencies, among others), “While we are pleased that the most recent comprehensive study by the Federal Trade Commission showed that credit reports are materially accurate 98% of the time, we are always looking for ways to improve our procedures, and this consumer assistance plan will allow us to do that.”

Here are some of the main changes to the data reporting process affecting how debt collection agencies, such as CCS, report information to credit reporting agencies:

  • Report the name of the original creditor and creditor classification code.
  • Furnish data using newly established minimum reporting requirements for consumer personally identifiable information, such as full date of birth, and full social security number when available.
  • Do not report debt that did not arise from a consumer contract or agreement to pay, such as tickets or fines.
  • Do not report medical debt collection accounts less than 180 days old, in order to allow insurance company payments to be applied.
  • Remove debt paid or being paid by insurance.
  • Report paid in full collection accounts before purging the accounts from your internal collection system.

The fact of the matter is, these new guidelines will have little impact on us here at Credit Consulting Services, because CCS has always set high standards for furnishing data to credit reporting agencies. Accurate information is vitally important to the successful collection of debt. Legitimate collection disputes are almost always quickly resolved. Collection disputes that are not legitimate almost always involve spotty or inaccurate information on the consumer. This is something we understand thoroughly here at CCS, and we spend a considerable amount of time educating our clients about it as well.

It is also incumbent upon consumers to regularly review their credit reports for legitimate errors, and to be an effective manager of their credit rather than a victim. The National Consumer Assistance Plan can be another tool to help them do just that.

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