Panel discussions about collections at events hosted by the National Alliance of Buy-Here, Pay-Here Dealers sometimes stir the most attention from conference goers.
This week's enforcement action revealed by the Federal Trade Commission regarding the illegal use of text messages in collections likely will give panelists and attendees at the NABD East Coast Conference even more to discuss.
Officials indicated a Glendale, Calif.-based debt collector will pay $1 million to settle FTC charges that the defendants violated federal law. This is the first FTC action against a debt collector who used text messaging to attempt to collect debts in an unlawful manner.
The FTC alleged that Archie Donovan and two companies he controls — National Attorney Collection Services and National Attorney Services — used English- and Spanish-language text messages and phone calls in which they unlawfully failed to disclose that they were debt collectors.
The FTC charged the defendants with violating both the Fair Debt Collection Practices Act and the FTC Act.
In their text messages, phone calls, and mailings, the FTC said the defendants also falsely portrayed themselves as law firms by using the names National Attorney Services, National Attorney Service, National Attorney and Abogados Nacionales.
Building on their deceptive company name, officials stated the defendants falsely threatened to sue consumers for not paying their debts or to garnish their wages.
The FTC also alleged that Donovan and his companies illegally revealed debts to the consumers' family members, friends and co-workers. Among other tactics, the defendants used mailing envelopes picturing a large arm shaking money from a consumer who is strung upside down. The law does not allow debt collectors to disclose publicly someone's private debts, because doing so could endanger their jobs and reputations.
Mailing envelopes can include only the name and address of the company, and cannot indicate that the consumer may owe a debt, according to the FTC.
In addition to the $1 million civil penalty, the settlement requires the defendants to stop sending text messages that do not include the disclosures required by law, and to obtain a consumer's express consent before contacting them by text message. The defendants also are barred from falsely claiming to be law firms, and from falsely threatening to sue or take any action such as seizure of property or garnishment that they do not actually intend to take.
"No matter how debt collectors communicate with consumers - by mail, by phone, by text or some other way - they have to follow the law," said Jessica Rich, director of the FTC's bureau of consumer protection. "The FTC has a zero tolerance policy for deception."
NABD dedicated an hour-long panel discussion to collections on the closing day of its East Coast Conference. The event — the first time the alliance will conduct one of its major conferences in New Orleans — runs from Nov. 3-5 at the Hyatt Regency Superdome.
The conference begins with concurrent workshops covering 12 topics of timely importance. These workshops feature industry experts, including leading attorneys Tom Hudson, Terry O'Loughlin and David Bafumo.
"These workshops will be highly interactive and will not be infomercials," NABD founder and conference chairman Ken Shilson said. "For instance, we have added operators to several of the workshop panels to provide a user's perspective on various products and services which increase efficiency and profitability. Successful operators today spend every dollar wisely. These sessions are very timely."
General education sessions will start on the second day of the conference, featuring new topics and speakers not previously included in NABD's annual conference this past May in Las Vegas. Along with BHPH industry benchmarks, Manheim chief economist Tom Webb will discuss the used-vehicle marketplace and industry economics.
Some of the nation's most successful operators will provide tips and techniques on best operating practices and collections. A panel of experts will discuss new inventory sourcing technology. In addition, roundtables have been added covering inventory, capital, compliance, and technology where attendees can individually interact with speakers and experts. The program also features two compliance sessions covering a regulatory update on the Consumer Financial Protection Bureau and new legal issues.
"The New Orleans conference provides new information of vital importance to help operators be successful in 2014," Shilson said.
NABD arranged discounted room rates of $169 per night at the Hyatt Regency Superdome, which was the host hotel for the Super Bowl this past February. The discount expires Oct. 4 or until supplies are gone.
"The new venue, the exceptional facilities, timely information, and some great New Orleans cuisine make this conference a must-attend for everyone," Shilson said.
Reservations can be made online at www.bhphinfo.com or by calling (832) 767-4759.