Red Flags and Collections Procedures
Answered by BOL Gurus Mary Beth Guard and Jack Holzknecht Bios
Question: When we are collecting delinquent loans, it's common that borrowers will claim verbally that accounts are not theirs, or they never took out the loans in attempts to avoid paying. We already take steps under FACTA to send letters requesting additional information to research these claims, even if the account is legitimate. Is there any other action required under the Red Flags guidelines on these claims that are not legitimate?
Answer: No additional action is required under the Red Flag regulations. Make sure that your procedures comply with Section 154 (Repollution) and Section 155 (Debt Collector Communications) of the FACT Act. This would be an example of Red Flag #26 - information received from others. Your red flags program, if it includes this as a red flag (and we assume it will) will need to spell out what your response will be, and you will detail the steps you take -- requesting additional information, researching the validity of the claim, etc., and putting the matter to rest when you determine the claim is without merit.
BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.
Print Friendly!
Email This Article!
Discuss NOW!
