Success Strategies

Developing Talent in Government Collections

Joshua Fluegel

Anyone who has worked in both the government and private sectors knows how much they contrast. Survival in government collections requires a great deal of training so accounts receivable professionals may use the same language and business practices as their government counterparts. No easy feat. This issue shines the Agency Spotlight on Credit Collection Partners and ask its president, Rick Bonitzer, what they have done to train and collect the way the Man does. How did you get started in collections? It was part of relocating my family from the Chicago area down to central Illinois roughly seven...

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Legal collection requires exacting tactics as this is the portion of the collection process where legal ambiguity must be wrestled into black and white. The odds of fair treatment for a collection professional are shifted even more out of proportion by the increased use of predatory attorneys using rehearsed consumers as bait. Collection Advisor shines the Agency Spotlight on The Barton Law Group and talks to its managing attorney Dennis J. Barton III about how to deal with these predatory attorneys, stay on the right side of the courtroom, and his affinity for strumming a good folk song.

Why did you become an attorney and what brought you to collections?

barton dennisWhen I was young, or even in college, I never had aspirations to be an attorney. My father owned a neighborhood lumber and hardware store, and I grew up wanting to get into business. He emphasized to me that I was always welcome to one day take over the family business, but he encouraged me to make sure I considered other options in life. As a junior at Indiana University, Delta Faucet hired me as a summer intern in the Human Resources Department. It had a progressive employment motivational philosophy rooted in positive reinforcement and personal fulfillment. I focused in human resources and graduated from I.U.’s Business School with a double major in business management and human resources management.

Straight out of school, I worked as a human resources representative at Arvin Meritor, the world’s leader in exhaust manufacturing. My office was in a three acre manufacturing plant where I was in charge of the hiring and discipline of hourly workers who were unionized by the United Brotherhood of Carpenters and Joiners. Fortunately, I spent most of my day negotiating employee discipline and company policies with the union officials that fought hard to protect their members. Every time a complicated or impactful situation arose, I was required to contact the company’s attorney, and that attorney or outside counsel made the ultimate decisions. I started to understand the impact and influence lawyers have due to their superior knowledge of potential legal consequences of even well-intended actions. I wanted to operate at that level. Soon thereafter, I took the LSAT and applied to Washington University School of Law.

In 2009, I had been a lawyer for six years working on a wide variety of cases, and I opened my own firm after locking down a commercial real estate developer as a commercial collections client. That business gave me enough income to buy the time I would need to build a respected firm. Less than three years later, Tim, a special process server I had used a handful of times in the past approached me about taking over a collections law firm that was owned by a solo practitioner who suddenly died in an automobile accident. My firm was retained by his clients who were collection agencies and first-party creditors. While I had some collection cases before, I was a general practitioner taking whatever cases came my way. With the new collection clients, the focus of my practice quickly became collections litigation. While representing these firms as a collections attorney, I was also retained by them as their consumer law defense attorney, which now is about half of my practice.

Almost overnight I became a collections attorney and a consumer law litigator. I remember when Tim was trying to convince me to take over the collection clients he told me, “Collections is easy; it runs itself.” If only that was even half true.

What kinds of collection law does Barton Law Group practice and do you see any trends in the particular branches of collections?

My collection cases mostly consist of medical debt, consumer loans, and commercial and residential real estate. A significant trend that affects me relates to medical debts. Many predict such debt will not be reportable in the not too distant future or at least reported in a different way. That will drive down the common incentive to pay those bills to rehabilitate bad consumer credit ratings.

For those who might not know, why would they predict such a thing for medical debt?

There’s been some discussion that medical debt differs from most other types of debt. These are not people who decided to make an investment in something that failed, tried to get a payday loan, or buy a sports car. These are people who had an unexpected event whether they became ill or injured. There is a philosophy that reporting medical debt is not a fair indication of that person’s creditworthiness. They didn’t plan on these expenses.

The counter to that is no matter how you got into that position, you got into that position and it still affects your creditworthiness. There’s a movement toward the idea that once a debt is paid it is deleted from your credit report instead of it just showing as satisfied. I actually think that would help in the collections area. If people knew that if they paid it off it would be taken off the record entirely, that would actually encourage payment.

What was a particularly interesting case and what knowledge did you take away that you think is very important?

Approximately two years ago, a consumer called the agency asking about a letter she received 25 days prior to the call. During the call, the collector offered a payment plan. I was retained to defend the agency after the consumer very soon thereafter filed suit alleging a violation of the FDCPA. She claimed that the offer of a payment plan overshadowed her 30-day dispute period. The plaintiff argued that an unsophisticated consumer would not understand that she still had a full 30 days to dispute the debt even after being offered a payment plan.

Those facts are a common fact pattern and far from interesting. The interesting part is that when I deposed the plaintiff, I asked her where she was during the call and who was in the room with her during her call. I asked those questions because I suspected the call was a bait call. She admitted that she was at her lawyer›s office when she called and that her lawyer was present. I filed a motion for summary judgment arguing that even if the collector overshadowed, that claim only occurs when the unsophisticated consumer standard applies. I further argued that such a standard cannot exist when the lawyer is in the room because the consumer is no longer unsophisticated.

The case settled for other reasons, so I did not get to make this argument in front of a judge that I really respected. What I learned, though, is to always pursue facts that support my suspicions. FDCPA cases are strict liability cases that are broadly construed in favor of the consumer. Collectors need to find any evidence to defeat liability, and this case reminded me that I need to dig deep into the facts to find potential defenses.

What do you think is the easiest thing a collection agency could do to stay out of the courtroom?

This industry is governed by the same federal statute, but it is interpreted differently by courts all around the country, sometimes unexpectedly with radical outcomes. Staying current with the law is essential to knowing what new plaintiff’s theory is landing agencies in court. The easiest thing agencies can do is to make sure one or more people subscribe to organizations like www.insideARM.com that have a free list serve that provides information on legal trends in the industry.

What are the most dangerous pitfalls in legal collections and how do you avoid them?

Staying out of the courtroom starts with adopting policies and procedures that comply with the many consumer laws that regulate our industry (e.g., the Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), and the Telephone Consumer Protection Act (TCPA). In order to make those policies and procedures meaningful, they must be effectively communicated to new employees. While it is true that all employees need continuing training on issues of compliance, not placing an emphasis on new employees is a common mistake. What is true in collections is true in most if not all other fields. Whether you are a collector, a welder on an exhaust systems assembly line, or a professional golfer, initial training can set the pace for the remainder of your career. It is far more efficient for agencies to invest time and money into teaching a new employee the correct way to do something rather than spend more time and money attempting to alter bad practices and techniques developed over weeks, months, or years due to inadequate training.

Emphasis of initial training is easier said than done when agencies have client demands that force new collectors to experience “on-the-job training” and “baptism by fire.” The temptation to cut corners in new employment orientation and training can be significant. Agencies create future pitfalls by setting up for failure those employees, their agencies, and ultimately their clients.

What do you think is a recent case that you feel could influence collections or affirm a direction the industry is headed?

In any lawsuit, a plaintiff must have “standing” to bring the suit. It is a requirement under Article III of the U.S. Constitution. It means that a plaintiff must have an interest in the case because the plaintiff suffered actual harm. In Spokeo, Inc. v. Robins, a consumer filed a class action lawsuit on a technical violation of the FCRA. The district court ruled he did not. The Ninth Circuit Court of Appeals overturned the district court and held that the FCRA’s statutory rights established an injury sufficient to satisfy standing. This April, the United States Supreme Court agreed to hear the case, and on November 2, 2015, the Court heard oral argument. If the Supreme Court rules that a technical violation is insufficient to have standing in a FCRA case, it may open the flood gates as to other statutory claims that affect this industry such as the FDCPA, TCPA, and others.

What is something every collection manager should be doing to help enforce compliance?

Monitoring employees is an important step in the enforcement of compliance. This can come in the form of listening to a random sample set of recorded calls or monitoring live calls. The goal is to identify problems before they become problems. This will enable collection managers to identify improper policies and procedures or collectors not following them before a consumer files a compliant with a state agency, the CFPB, or a plaintiff’s attorney.

What is a specific or common infraction to listen for?

In my geography bait calling is big. There are a few indicators of whether or not a bait call is going on. One of those indicators is that it sounds like it is on a speakerphone. The consumer will make a phone call from their own phone using speakerphone and plaintiff attorney is sitting right next to them with plaintiff attorney’s phone recording the conversation. That way when they look at the phone records it will look like you were talking just to the consumer when in fact you were talking to the consumer and the consumer’s attorney.

One thing that collection managers can do is make sure collectors are aware of that. Once they have identified there is a possibility that it is a bait call they need to be trained on how to handle it. Either disconnect the call altogether, turn it over to a manager or someone who is especially good at dunning.

Another indicator is that the person asks the question and almost no matter what the collector says the person just moves on to the next question. That’s not natural. If someone says, “Will this affect my credit?” and no matter what the answer is they just move on to the next question, there is something amiss about that. People don’t just ask questions and move on if they are truly interested in the answer.

What is your greatest achievement thus far in your career?

My greatest achievement as a lawyer has been taking over the cases of the attorney that passed away, hiring his employees, and picking up the pieces of his ongoing cases all the while teaching myself collections law. Many of the procedures of that lawyer’s firm (and thus many of the practices of his employees that I hired) were not in compliance with the FDCPA and/or state regulations. Fortunately, those employees taught me much of the nuts and bolts of the practice, and we worked together to bring the firm into compliance. My success was due to hard work by me and a team of people that I grew to trust and heavily rely upon.

What do you like to do in your free time?

I am the proud father of two daughters, ages three years and six months, respectively. That means I have very little “free” time. In those rare occasions when I can slip away, I enjoy playing guitar. My mother gave me my first guitar when I was twelve, and I have played off and on ever since.

Tell me about your experience with music.

barton guitarMy mom was a big guitar player. She played in church and a folk music group. She always liked it. She was always encouraging of m e being in folk music. It was not only fun but it was good for intellectual development. It exercised both sides of the brain, the analytic and the creative. She was always encouraging of that. I was never in a group. I was always solo. I mostly played folk and rock; mostly influences from Bob Dylan and the like. When I was in college I cut a CD and had a lot of fun with it.