Turns out, any “statement of dissatisfaction” is a complaint, legitimate or not.  The CFPB is requiring all third-party debt collection companies to register with them as part of their new authority to regulate this industry under the 2010 Dodd-Frank act.  You remember the Dodd-Frank act?  It was enacted after the financial “crisis” with all those banks and insurance companies that were “too big to fail” needed bailed out by the American taxpayers to keep the economy from tanking.  (Seemed to have worked well, didn’t it?)

Any consumer can “complain” about anything we do or don’t do, and we are going to be required to respond or they will indicate in our published public rating we are a non-responsive company.  And if you are non-responsive enough, or the complaint allegations are egregious enough, they will send an investigator to find out why we are treating those consumer so badly.

In the past five years, about a dozen complaints have been lodged against our company with the Oregon Attorney General’s office.  They range from “their process server embarrased me by dropping papers  at my neighbor’s house” (wasn’t our company, wasn’t our process server, wasn’t our lawsuit, wasn’t even our debtor!) to “they refuse to take this off my credit report and I can’t buy a house” (wasn’t us reporting it, and it was a title report not a credit report).  Anyone can accuse us of anything, and we are required to respond or else we are guilty. 

What I would really like to know is; when is our industry going to have a place we can lodge complaints for harassment and abuse by consumers?  Southern staff members treat all consumer with respect and dignity.  Period.  They may not like the consequences that occur due to their choices and actions that lead up to us getting involved, but we are in no way rude to people, like some are to us.  Where do we go to tell regulators about nasty people who swear and threaten us?  Who steps in and protects our employees (who are consumers as well, by the way) when  a debtor who files bankruptcy walks into our office and demands we give him some paperwork while using some of the foulest language not allowed on television?  Then threatens a staff member? 

This doesn’t happen frequently, but it happens to us and not the other way around!  Can we call the police?  Sure, and they will do what exactly?  Since we have called the police in the past, I can assure you the answer is “very little” or “next to nothing”.  If we do half what this person did, we get a lawyer suing us for tens of thousands of dollars, bad press, a client wanting to fire us, the Attorney General, FTC and CFPB sending us forms demanding we answer for this illegal and awful conduct.  Someone treats a bill collector like garbage, and what we hear are crickets from the regulators, police, and public.

Is it okay to expect people to pay their just bills?  Isn’t it part and parcel of our economic system that people who make promises to pay for something they have received, and have the ability to pay, should be held accountable for that promise?  We can do it in a respectful manner, why can’t others be held to the same standard?  Next time a “complaint” is filed with the Attorney General or CFPB against our company, maybe I should ask that question.

This is the written purpose of Small Claims court in Oregon.  I thought it might be useful to review the law on small claims courts and discuss what the true expectation a creditor can have when appearing in a local court.  Let me start off by stating most small claims cases are heard by judges Pro-Tem, who are not “real” Circuit Court judges but lawyers who volunteer for this work.  If you are fortunate enough to have an actual Circuit Court judge hear your case, you may disregard all of the following.

Many of the attorneys who volunteer for judge pro-tem make their living as trial lawyers suing businesses, doctors, insurance companies, and other medical providers.  Trust me when I say they have a negative bias against the health care profession, creditors, and collectors. Most of the reasonable and fair-minded judges cannot hear our cases as they dismiss themselves due to conflicts of interest.  (We have worked for many lawyers and law firms in the area who still expect to be paid for their services.) 

This is a two-edged sword for us, as it limits the pool of potential pro-tems to the trial lawyers, but also grants us a few more hearings in front of the “real” judges.  So, what can a creditor expect in front of one of these “biased” pro-tems?  Based on the past four or five years of appearances in local southern Oregon court rooms dozens of times, the trend is getting more and more toward a bias against creditors.

Start with a snarky attitude.  In the past two years, we have seen pro-tems lecture us and our clients (appearing as witnesses) on everything from basic business services to contract law to fairness and what they would do.  I don’t see anything in ORS 46 about the judge getting on their Crusader soap-box and lecturing the plaintiff about their business practices.  Yet it happens almost every time we appear in court, either to us or other creditors in court. It is unnecessary, unprofessional, and without basis in law or fact.  How these lawyers know how to run all these different businesses is beyond me, but they apparently are geniuses in every aspect of business and medicine, according to themselves.

Secondly, the creditors required burden of proof will exceed the normal view of evidence.  Written documents, itemized statements, signed contracts, and witness testimony all will be ignored if the judge wants to.  And they frequently do. Recently, we had a judge state he was finding on our behalf, because we had all the evidence and the defendant even admitted owing the bill, but he cut the award in half because he “felt sorry” for the defendant.  These lawyers NEVER feel sorry for the creditors who do the work, pay their bills, pay their staff, pay their taxes, and then have to watch their former customer drive off in nice cars with a drive-through coffee in one hand a cell phone in the other, while headed to the mall or nearest gaming facility. “Fairness” is in the eye of the beholder.

Third, do not expect anything close to true fairness.  After the pro-tem does their very best imitation of the defendant’s attorney, after they lecture the creditors about business practices they absolutely know nothing about, and after they make several smarmy comments about greed or fairness, expect them to look at all the evidence and ignore it.  They will rule according to how they feel about the case.  And how they feel about it was decided long before you showed up in court that day.  They have a bias against businesses, against the medical profession, against insurance companies, and in favor of anyone they can determine is a victim in their eyes and can pick up their cause. 

Fourth: the defendant can get a reset any time they want for any reason whatsoever.  The plaintiff will not get one even if they did not receive notice of a trial.  This is a true story for us.  We lost a case because the court granted the defendant a reset of the trial date THREE times, twice after we had appeared.  The third time we never received the notice from the court for the trial date, and the judge found in favor of the defendant since we did not show up.  The presiding judge would not overturn the ruling.  There are no appeals in small claims court, and there is no equitable treatment either.  A defendant got a reset the other day by stating to the judge he wasn’t ready.  We were ready.  Legal service was done.  We had our client there as a witness, who had to arrange to be away from work for several hours.  Doesn’t matter.  Bias against creditors is the rule, and the exception is a fairness in judging cases. 

What can be done about it?  Very little, I’m afraid.  When we encounter very egregious cases of bias, we will file a motion with the courts and ask that judge no longer be able to hear our cases.  Sometimes it’s granted, sometimes it isn’t.  But that won’t change their mind or any of their previous rulings. These pro-tems do not believe in the legal concept of quantum merowit, the idea you cannot get something for nothing.  They let debtors walk away after receiving goods and services (many times after the debtor ADMITS they owe the bill!) without having any financial obligation whatsoever.  And then lecturing our staff and clients that there has to be a written contract for everything.  Well, that’s not really the law, except in their eyes and their court rooms.

Is this just sour grapes on our part due to a couple of cases we lost and thought we should have won?  Not even remotely true.  We have lost cases we felt we had the correct evidence and should have won, but also saw what the judge was looking at and understood.  We may not agree, but we understood.  (See again, “Real Circuit Court Judges”).  This is about a pervasive and prevailing attitude of bias and pompous attitudes that permeates the pro-tem benches in southern Oregon.  We simply no longer expect a fair or reasonable outcome in front of one of these judges. 

It is unfortunate, but we are taking more cases to Circuit Court now.  This means more costs to the debtors, longer times getting recovery, and more cases in the court system that should be going through small claims.  The only real solace we get from this is many of these pro-tems have to deal with us and our clients when they represent people against medical providers and insurance companies.  Then they ask for a favor and want to pay a small fraction of what’s owed.  Funny how they expect to be paid their full fee when asking for others to take a pay cut, isn’t it?

The first question is; What is your office’s financial policy?  If you have policies that indicate you will “accept payments”, then you may be on the losing side of the argument.  If your policy allows for payments under certain circumstances, then you should be able to participate in the payment plan negotiations.  Perhaps the best place to be is “Payment due at time of services”.  This way, any payment plan your office negotiates is a courtesy on your part, and you are not agreeing ahead of time to any payment plan.

Next question; Are you receiving anything for the payment plan?  Are you charging a finance fee or interest in exchange for the payment plan?  If so, you may be receiving “consideration” in exchange for the payment plan.  A true contract requires at least five tenants: offer, acceptance, consideration, lawful purpose, and legal parties.  You as the creditor need to accept the payment plan and receive consideration for it to be a real and binding contract. 

How many payments before it becomes a contract?  This really doesn’t come into play.  If you haven’t agreed to a payment plan, and your continued billing efforts are asking for the FULL BALANCE, there is no contract for payments.  Sometimes, statements will have something printed on them like: “Your Payment is Due” or “Your payment amount of $50 is past due”.  In these instances, a consumer could argue you are only asking for a payment amount.  But if your statements say “Your Balance is Past Due” then they have a much tougher time arguing they had a contract for payments with your office.

It is important to have a well-worded office policy about payments and payment plans.  Consulting a qualified attorney is worth the money to get the correct wording.  And be consistent!  The point-of-entry personnel need to state the policy the same as it is written the same as the billers the same as the collectors.  And remember, if you are paid time of services, any arrangement you make is a courtesy!

That’s where Junior Achievement comes in.  As a Board member for the Southern Oregon JA, I see first-hand the need and reward of investing financial literacy with our students.  And in 2013, Southern Oregon Credit Service has the privilege as the title sponsor for a brand new venture for Junior Achievement – “JA Finanace Park!” 

JA Finance Park is a traveling financial literacy project that will make it’s inaugural trip around Oregon this spring, stopping in Medford at the Expo Park on April 16 and 17. We expect about 200 students from Scenic and Ruch Middle Schools to participate at the Park.  After receiving 12 hours of education and prep leading up to the event, the students will be handed a tablet with a financial profile, and then they will need to negotiate their way through a day in the life at the park!  This is real-life teaching and experience brought by the private sector in cooperation with these schools.  These professional kiosks include banks, real estate, utilities, and other stores and expenses we all experience in life.  The traveling Park was created and financed through donations and grants from many businesses in Oregon, with individual events having local sponsorships.

Junior Achievement is a great organization bringing necessary and valuable knowledge and experiences to our students through volunteers and private sector donations and action.  The core missions are financial literacy, work-rediness, and entrepreneurship.  We are looking toward a great event in 2013 and seeing many more schools and students participate in the years to come!  Our future needs and will require people who know how to handle money! 

For more information about JA in southern Oregon: http://jaorswwa.org/

In a very pleasant meeting with him and another representative from the World’s Greatest Bank, I was regaled at the myriad reasons this was THE best bank to work for, be a customer of, and benefit from.  How this bank had put customer service as it’s primary goal and even hired executives from the Four Seasons hospitality chain to train all of their personnel in great customer service.  Both men loved their jobs and loved their employer.

I politely told him thanks, but my loyalty was secured and my services well taken care of.  He thanked me for my time and hoped that in the future I would consider his bank a “second option” should something happen with my current relationship.

I recently saw him again, and he now works for another bank.  I thought of the hour I spent listening to the pitch on The World’s Greatest Bank, and what it might have taken for him to “jump ship”.  Now he is faced with making a new sales pitch to many of the same prospects for a competitor he very recently said was second-rate.

I got my start as a salesman, and have many business relationships with other salespeople, and fully understand and appreciate the opportunity to improve and move to another position or company.  I just couldn’t do it in the same industry.  I was offered the opportunity on several occasions to go to work for a competitor, or start up a new competitor.

I can see going out on your own, then meeting prospects and telling people it was good with Company A, but my new company will be even better!  But what do you say when you go with a competitor you have worked against for years, telling your clients and prospects you had the best service or widget, only to go to work for them and tell them you were wrong before but now your ARE working for the best company?

In the past ten years, three of our main competitors have done this; losing a salesperson to one of the others only to have them go right back to the same clients and sell the new company, which they had said for the past many years was not as good. 

Who and what should you believe? Is a salesperson telling you what they actually believe, or something to make them more money?  Does it matter to you?  It matters to me.  As I said, I was offered positions with competitors over the years (and even since I become an owner!) and told everyone the same thing; I can’t sell for another company because I truly believe Southern Oregon Credit is the best option for most business looking for a professional debt collection firm.  Period.

Too expensive, you say?  How can we afford that, you ask?  Not to worry!  If you choose not to buy the mandated insurance, you can simply pay a fine of about $695 per year per adult.  Since it’s the IRS, it’s not always that simple; you have to do a very complex calculation to come up with the “exact” amount of your fine.  So the family of five that chooses not to pay the twenty grand in premiums will pay about $2400 fine.  And now the good news:  you still get coverage!

Under Obamacare, there will be NO such thing as a pre-exisiting condition that will not be covered by the taxpayers!  Want to spend your money on anything but insurance?  Go ahead.  Then when you get sick, just buy the insurance you want and TA-Dah!  Your covered!

I recently attended a seminar for employers on how to deal with Obamacare and what it means for your company and your employees.  Two interesting points were brought up in the Q&A session at the end I would like to share with you, since other employers asked I assume many may not know these important issues.

Question 1:  After listening to 3 hours of lecture from insurance experts, an attorney and a CPA, would you tell me how this law is going to save anyone money?

Answer: (From the PacificSource representative) : Even though “Affordable” is in the title of the law, there is nothing in that law that mandates anything become more affordable for anyone.

Question 2: If the penalty is so much lower than the mandatory insurance, how many people will still be uninsured when this is fully implemented?

Answer (from the attorney): The CBO just put out a report that about 24 million Americans will still be uninsured in 2016.

There you have it!  An incredibly expensive program that doesn’t work!  And don’t forget about the impending doctor shortages, increased taxes, increased budget deficits and borrowing, and mandated compliance and bureaucratic mess for every business in the country.  Just can’t wait…

I recently had a discussion with one of our clients about this, and she was VERY relieved the debate was over, and most of the Medicare funding had been restored.  You didn’t know Medicare was a central part of the “Cliff” discussions?  That’s odd… the news media usually does such a good job informing the public of what’s important in DC.  Anyway; Medicare was facing very steep cuts had the negotiations gone another way, or not at all.  So much so, that many providers may not have made it through the year on what the reimbursements were going to be reduced to!

Which once again brings us to the primary focal point of any legitimate discussion on health care reform; Medicare.  This is the federal government’s insurance company for people over 62, and providers who accept this form of insurance are told how much they will get for certain types of services.  These payments, or “reimbursements”, usually run about 40% of what the list price of a service is, depending on the service and where you live in the country.  That number was going down by half, or more for some services, if the Cliff was not averted. My friend at the surgeon’s office was prepared to shut the doors if things weren’t changed!  Depending on the news source, nearly $1 trillion was going to be “cut” from Medicare reimbursements over the next 10 years if we went over the “Cliff”.  As it stands, there are reductions, but not the size and scope that was feared.

How does that affect debt collections?  The same way Medicare payment reductions always affect collections: they go up!  Ask providers how they arrive at the price for any given service and they will tell you something like this: first we have to get the Medicare reimbursement chart, then we can negotiate with commercial insurance providers, then we can set the cash price of the services.  When Medicare is reduced, the cash price has to go up, irrespective of the actual cost of the service!  So those with no insurance, or those with growing deductibles, will face higher prices for the medical services, which means more dollars going to collections, which will in turn raise prices too.

There are seven or eight major issues to consider when talking about health care reform, but if you are not starting with Medicare, you will not change the primary problem; service prices are not related to their true cost due to Medicare cost-shifting.  Well, we can all breathe a bit easier now that Congress and the President have put another band aid on Medicare via the “Cliff” negotiations and kicked this can down the road for a bit longer.

We work for many medical services providers and doctors, and they will ask themselves these questions when trying to decide whether to pursue non-payers with us or simply write it off as a charitable event.  I wish the “world” at large knew and understood the amount of pro-bono work doctors do in their communities, but the concept of the greedy physician seems to only grow.  We have a harder time now getting doctors to turn accounts to us for collection than ever before.  The misconception of the overpaid, fat-cat, greedy doctor is as fictitious as that of an honest politician!

So: is it fair to send accounts to collections when the economy is bad and it seems people don’t really have the money?  Let me ask it this way:  For your good customers who are struggling to pay you, is it fair to them to ignore those who could pay but choose not to?  Aren’t those people who choose not to pay you making your services more expensive for those who do pay?

We can’t collect from people who don’t have money or income, so turning them to collections won’t affect them.  But for those people who have the money, but are doing something else with it (like buying flat screen tv’s, cell phones and service plans, xbox games and consoles, drive-though coffee drinks, gambling, tattoos, jewelry, hair and nail fixes, etc.) we can recover some of what you are owed, thereby keeping costs down for your “good” customers!  Most people of working age can’t stay on unemployment indefinitely, so at some point they will need to go back to work and should be able to pay something.  After all, they received your services or goods you sold, and you deserve to be paid for the work you do!  Why would you want to punish those who are trying to pay you and reward those who ignore you and their responsibility?

What types of holiday excuses do we hear?  Well…let’s take a look at some of the classics we have been given over the years.  With a tip of the hat to Letterman, our Top Ten Reasons I can’t Pay my Bill this Month! (these are actual excuses – not made up!)

10. I won’t have money to buy my kids the presents they want.

9.  I’m too busy shopping for presents to make my payment.

8.  It’s just too stressful this time of year to make my payment.

7.  I’m having family come to my house and I forgot to pay you.

6.  We went to Disneyland and I spent all our money.

5.  I am at Disneyland and forgot to mail my payment before we left.

4.   I won’t have money to buy my kids the presents they want. (I know this is also #10 – but we hear this one ALOT!)

3.  You should let me skip my payment because the economy needs me to buy presents.

2.  Only a real Scrooge would make me pay this month.

And the #1 reason we actually heard for not paying their bill at Christmas time:

1.  I am in Hawaii for three weeks so I won’t be able to make it to your office and make my payment!

Yes – these are all excuses we have actually been given for not paying a bill this time of year!  So how do we handle people who ask to skip a payment so they can shop for presents?  If the person has been paying faithfully, we tell them; “Sure you can skip this month, but you will need to make two payments next month.  What days will you be paying?”  Seems few people actually skip when given this option! (If they haven’t been paying faithfully, we simply tell them “no”,)

The age-old question about interest charges is one our company deals with everyday in attempting to follow the law.  There are a number of things that can complicate the matter, most of them involving computers! (Of course, we always knew they would take over the world in a bad way some day!) 

I know some of our clients don’t understand the financial gymnastics we go through when we remit or enter their account balances, but it is all in the “interest” of following the law – the Oregon Unlawful Trade Practices Act (UTPA), or ORS 646.605 and following.  You see, if our client has an agreement to charge interest or finance charges, and they are asking us to collect those sums, we have to keep those charges separate from the principle balance so we do not “compound” the fees, or charge interest on interest.  Our clients’ software program separates the two amounts, then combines it in the amount written off to collection as one balance.  We then have to break it back into two parts, thereby confusing the matter when we collect the principle and finance charges separately.  And it usually amounts to only a few dollars, so it doesn’t seem like it should be that difficult, right?

The UTPA lists numerous potential violations, among them are “deceptive practices” whereby a business uses “false or misleading” conduct toward a consumer.  And many lawyers would look at compounding interest as a violation.  Additionally, the Oregon Attorney General has regulatory authority over the UTPA, so not only does a violator face a civil lawsuit with class-action potential, but criminal charges are a real possibility!  Fines up to $25,000 plus damages etc. etc. So the few dollars a business compounds in interest charges, multiplied by tens of thousands of consumers, over a year or two…well that is worth fixing before you have a problem!

We would like to apologize in advance for being highly sensitive about finance and interest charges and keeping them in their respective “buckets” in our software system, but it is what we are supposed to do to treat consumers fairly, and also to lessen potential legal claims against us and our clients.  So, it really does take everyone involved to correctly calculate interest charges!