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Automobile Fraud: 3.6.6 Timing Requirements for Temporary Tags and Registrations

If a dealer has not completed the title documents for the transfer of ownership, then issues may arise as to how a consumer can legally drive the vehicle. If ownership remains with the dealer, and the consumer is only conducting an extensive test drive, then the consumer can operate the vehicle using the dealer’s plates. But if ownership has passed to the consumer, the consumer will either need temporary tags and registration, or an immediate transfer of the title document.

Automobile Fraud: 3.7.1 Introduction

In 2019, in a long awaited final rule, the National Highway Traffic Safety Administration (NHTSA) established federal standards for electronic titling and electronic title disclosures.103 The rules came in response to years of growing demands from Congress, the states, industry participants, and others for standards to allow the use of electronic titles and liens by states.

Fair Debt Collection: 1.3.1.1 Overview

As used in this treatise, consumers are individuals who borrow money or purchase goods or services on credit for personal, rather than business debts.

Americans owe large amounts of money for consumer debts.52 In the first quarter of 2021, the Federal Reserve Bank of New York reported that Americans owed $4.15 trillion in non-housing debt and $10.49 trillion for housing debt.53 However, only a portion of this outstanding debt is delinquent.54

Fair Debt Collection: 1.3.5.2.4 Types of debts collected

In a 2019 study of third-party collection tradelines, the CFPB found that the most common tradelines furnished by collection agencies to credit bureaus in 2018 were medical (66%), telecommunications (17%), and retail (11%).291 However, in a 2019 study of the credit card market, the CFPB reported that financial services is the largest share of third-party debt collection revenue, noting that credit card issuers may be issuing this information directly to credit bureaus.292

Fair Debt Collection: 1.3.5.2.5 Check diversion programs

“Check diversion” programs consist of a partnership between a collection agency and a district attorney. Typically, the collection agency sends consumers who have written a check that was dishonored by their bank a letter on the district attorney’s letterhead, threatening criminal prosecution and jail time if the consumer does not pay the check plus high fees and tuition for enrolling in “financial responsibility” classes they may conduct. The fees they demand may exceed a small check by more than $150.

Fair Debt Collection: 1.3.6 Collection Attorneys

In 2019, the CFPB estimated that there were “1,000 law firms in the United States that either have as their principal purpose the collection of consumer debt or regularly collect consumer debt owed to others.”301 Searching Martindale for “creditors rights” as an area of practice returns 6604 law firms and 13,475 attorneys.302 Separately, the National Creditors Bar Association (NCBA) states that its membership consists of “over 500 law firms and individual members, totaling approximately 2000 att

Fair Debt Collection: 1.3.7 Consumer Locating Services, a.k.a. “Skip Tracers”

Some businesses, known pejoratively312 as “skip tracers,” specialize in locating consumers’ contact information when the consumer has changed addresses, employment, or phone number. They will try to match the information they are given—such as Social Security number, name, former address, employer, etc.—to try to locate consumers for creditors, collection attorneys, and collection agencies.

Fair Debt Collection: 1.3.8 Consumer Reporting Agencies

Consumer reporting agencies are businesses that maintain files of information relevant to consumers’ creditworthiness, employability, and insurability and disseminate that information to businesses dealing with consumers. A delinquent debt on a consumer’s credit report lowers the consumer’s credit rating making it harder to get worthwhile credit.

Fair Debt Collection: 1.3.9 Debt Relief Services

There are legitimate credit counseling organizations that provide help to financially distressed consumers. However, there are also a wide variety of predatory debt relief scams.316 Although the details differ, debt relief scams typically prey upon consumers by claiming that they can provide debt relief to financially distressed families and then failing to deliver any meaningful assistance, often at great cost to the consumer.

Fair Debt Collection: 1.4.1 Overview

This section provides a brief overview of some typical collection practices by different parties. Unless otherwise specified, this section is discussing the collection of unsecured credit card debts. The collection of secured debts like automobile loans and home mortgages involve a number of different practices.319 The collection of other types of unsecured debts can have a number of important distinctions.320

Fair Debt Collection: 1.4.2 Credit Reporting

Creditors and other collectors sometimes turn to consumer reporting agencies (CRAs) to obtain information such as a consumer’s current address or to assess the collectability of their claim.321 Some CRAs also offer monitoring services to debt collectors.

Fair Debt Collection: 1.4.4.1 Collection Prior to Charge-Off

In the Consumer Financial Protection Bureau’s survey of large credit card issuers,337 almost all respondents engaged in targeted outreach to high-risk accounts that were current or past the due date, but not yet delinquent.338 Outreach might include “softer” contact strategies like email or text reminders.339

Fair Debt Collection: 1.4.4.2 Charge-Off

When a credit card account is more than 180 days past due, it must generally be charged-off.346 This means that the debt is no longer carried as an asset of value on the company’s books, giving investors and lenders a more accurate picture of a company’s net worth.

Fair Debt Collection: 1.4.4.3 Collection After Charge-Off

A CFPB report has found that, after charge-off, large credit card issuers can either retain accounts for in-house collection, place accounts with third-party collection agencies, place them for litigation, sell them, or warehouse them.350 Each approach is discussed briefly below. If one approach to collection is unsuccessful, a new approach may be attempted after a period of time.

Fair Debt Collection: 1.4.5 Collection by First-Party Debt Collectors

Two-thirds of large credit card issuers surveyed by the CFPB reported using first-party collectors to supplement in-house collection pre-charge-off.368

First-party collectors used the credit card issuers’ case management system and call technology.369 Accounts were typically allocated randomly between credit card issuers’ in-house collectors and first-party collectors based on collector availability.370

Fair Debt Collection: 1.4.6.1 Length of Placement

The CFPB’s 2015 survey of credit card issuers found that creditors place credit card accounts with a collection agency for a specific length of time, that the length of time ranges “from several weeks to several years,” and that the length of placement tends to increase with the age of the debt.372

Fair Debt Collection: 1.4.6.2 Information Transferred at Placement

The CFPB’s 2016 survey of third-party collectors found that when an account is placed with a third-party debt collection agency, collection agencies generally receive account information electronically via a secure site.375 Typically, review of new accounts was limited to “using external data sources to identify accounts belonging to bankrupt or deceased consumers, and often also to identify address changes, consumers covered by the Servicemembers Civil Relief Act, and litigious consumers.”376 A

Fair Debt Collection: 1.4.6.3 Methods of Consumer Contacts

A 2021 TransUnion survey of collection agencies reports that 57% of collectors communicate with consumers by email, 31% via text, and 3% via social media, compared to 94% by letter and 87% by manually dialed telephone calls.379 For more information about different communication technology used in debt collection, see

Fair Debt Collection: 1.4.6.4 Consumer Disputes and Requests for Verification

In a 2021 TransUnion survey, 31% of respondent reported that 10% or more of their accounts had been disputed in the previous year, while 20% reported that less than 1% of their accounts had been disputed.384 An earlier collection industry survey of third-party debt collection agencies found that consumers requested verification for 18.1% of accounts, raised a dispute in 9.6% of accounts, and closed 47.8% of accounts because of a “valid dispute, wrong person,