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The financial services industry is being confronted with constantly changing and tightening regulations. The lack of process between originating issuers and downstream debt buyers in the supply of charge-off account information has increasingly caused debt collectors to make mistakes, such as attempting to collect from the wrong person or trying to collect the wrong amount.
As a result, Federal, State and Local Government agencies have been creating a bewildering array of new legislation to combat such mistakes and malpractices. Issuers will be increasingly held responsible for downstream collections practices on accounts that they originated and sold.
Yet today, issuers have very limited control over who procures their accounts beyond the first line buyer and no visibility into their collection practices. Equally, it is increasingly difficult for them to track, interpret and conform to new regulations. This places issuers at risk of legal action and obviates the idea that they can simply “wash their hands” of the problem.
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