A study by British industry groups and academics recently set out best practices for debt collectors dealing with so-call vulnerable consumers. InsideARM, a US debt collectors’ trade publication has taken interest and encourages senior management to read it. Among the studies’ key findings were:
- 1 in 4 frontline debt collectors spoke to at least one consumer they “seriously believed” might commit suicide.
- Debt collectors need training concerning addiction and terminal illness – areas they (understandably) find difficult to discuss with consumers.
- Debt collecting businesses need to provide their staff with more support in identifying vulnerable consumers
- Ad hoc approaches to vulnerable consumers – such as temporarily ceasing collection to give the customer “breathing space” are not enough.
Non-profit hospitals get big tax breaks for providing care for patients who can’t afford it. Under new IRS rules these hospitals must take extra steps to inform poor patients they may qualify for financial assistance.
Last month, ProPublica and NPR detailed how one nonprofit hospital in Missouri sued thousands of lower income workers who couldn’t pay their bills, then seized their wages, all while enjoying a big break on its taxes.
Private debt collectors are subject to a variety of laws policing their collection of private debts. The Fair Debt Collection Practice Act (FDCPA) imposes clear and strict requirements on debt collectors – such as preventing them from shaming consumers into payment by publishing the names or calling their parents, preventing them from lying to consumers or threatening them with illegal behavior.
However, FDCPA applies only to consumer transactions and does not cover matters such as tax debts. Boyd v. J.E. Robert Co., 765 F.3d 123 (2d Cir. 2014); Beggs v. Rossi, 145 F.3d 511 (2d Cir. 1998). Federal employees are also specially exempted from the FDCPA. 15 U.S.C. § 1692a(6)(C).
So, what’s left to protect taxpayers?