What the ARM Industry is Currently Up Against

What is the biggest threat to the accounts receivable management industry today? An unfriendly political environment in Washington? Populist rage against collectors infiltrating state politics? The economy?

All of those factors have created an operating environment that requires uncommon dexterity to navigate, no doubt. But an old threat to debt collection agencies is rearing its head with a vengeance.

A small town business and lifestyle magazine is currently running a solicitation looking for debt collectors, or former debt collectors, to come forward with official documentation detailing illegal company policies. In other words, they are trying to find written proof that collection agencies encourage their employees to break the law. And they’re offering a cash reward.

It’s just a small indicator of what faces the ARM industry in the media throughout the rest of the year, and going forward. News outlets have figured out that the “debt collectors = evil people” paradigm is stale and needs updating. I think that the solicitation is the opening salvo in a reenergized attack on the industry.

The remainder of 2010 appears to be a wash for the industry on the regulatory front. The FTC’s various outstanding information requests and reports may come to a close this year, but it’s not likely based on history. So expect the media to really attack the industry as unemployment lingers, the recovery stagnates, and charge-offs across all credit types continue to soar.

There is also a pretty good chance we’ll see a rise in enforcement actions this year. State attorneys general will be busy as always. But the FTC has already shown this year that they are going to be more aggressive. The agency will use rising consumer complaints to justify their actions, regardless of whether it’s warranted (“Exploring Rising Complaints Against Debt Collectors,” March 5).

This activity will feed the media. With more and more $1 million+ settlements, a narrative will be easy to find.

The debt collection industry has never been popular with the media, because the industry is understandably unpopular with the general public. But this year may be the year all-out war is declared.

Patrick manages all content for insideARM.com. Contact him with your news and comments at editor@insidearm.com , or call 240-499-3828.