Is There a Need for More Legislative Representation in the Recovery Industry?
UNION, N.J. — One of the most important questions facing the recovery industry today is whether there is a need for more government intervention. Most recovery agents believe state regulation is a double-edged sword. Many dislike and disagree with government intervention, but no one can deny the fact the recovery industry is at a crossroads that might determine the future of the industry.
The automotive and lending communities have both taken hits due to the economy. As a result, so has the recovery industry. Lenders are cutting costs, which often means cutting corners with their recoveries. Fly-by-night companies are rapidly appearing and underbidding their work to get more assignments. These recovery agents are usually inexperienced and unaware of the state laws and procedures.
Unfortunately, this lack of training may be more costly to the client when it comes to violating the federal regulations concerning a customer's privacy. The courts hold the client ultimately responsible for the actions of the agents that represent them in the recovery process. Compounding the prevalence of these unqualified agents is forwarding companies. Forwarding companies contract assignments at extremely discounted rates to fly-by-night companies regardless of their lack of training, experience and knowledge of the laws.
What's more concerning is the increased risk everyone in the industry faces because of these practices. The recent rise in deaths and injuries to recovery agents and debtors are direct results of the lack of training and experience among some in our industry. Implementing a licensing process set by the states — preferably one that shares similar standards — could help alleviate the risk of physical harm to all involved parties.
To date, California, Colorado, Florida and Pennsylvania have licensing and state regulations in place for the recovery industry. Members of the California Association of Licensed Repossessors (CALR) support a political action committee that lobbies for legislation regarding industry issues. The PAC also gives them a voice in state and national legislatures.
As a result, California has added some of the most progressive repossession laws in the nation. However, states' unwillingness or inability to enforce these regulations contributes greatly to the problems the recovery industry faces.
Currently, there are more than 46 states in need of state-mandated licensing and regulation in the recovery industry.
Although there is no single answer or an immediate solution to the question of more regulation, recovery professionals can rely on strength in numbers. The largest of association, the American Recovery Association, has chosen to form alliances with competing associations and organizations in related industries to add to the legislative discussion where numbers are important. ARA also recently hosted an annual summit near Dallas for recovery agents from across the country to meet and discuss these issues and learn about relevant laws and industry best practices.
We may not all be in agreement on the details, but we do agree every single recovery professional and debtor deserves to be safe.
Art Christensen is the owner of Commercial Service Corp. in Union, N.J. He also serves on the board of directors of American Recovery Association.