Every industry has its own lingo. Musicians talk about time signatures, sharps and flats, and computer programmers talk and type in code.
The debt collection industry is no different—debt collectors, lawyers, legal assistants and office personnel have their own language. While they’re typing up payment demand letters and using short hand in interoffice communications, these abbreviations and terms sometimes spill over into their phone calls and everyday speech.
While most debt collectors are trained to make their language as clear as possible to avoid confusing or alienating clients and debtors, sometimes technical terms find their way into the conversation.
Here we’ve provided a short list of common abbreviations, terms and legislation that might have you scratching your head:
Government agencies and legislation are commonly referred to as alphabet soup, because it seems that every entity is referred to in its abbreviated form. Here are some common abbreviations in the debt collection industry.
ARM— Accounts receivable management
CFBP— Consumer Financial Protection Bureau
CLLA— Commercial Law League of America
FTC— Federal Trade Commission
NARCA— National Association of Retail Collection Attorneys
PIF— Paid in full
POE— Place of Employment
SIF— Settled in full
Debt collection terms
Account scoring— Giving a numeric score to the probability of collecting on an account
Bad debt— A debt that is unlikely or cannot be recovered or paid
Skip— A consumer who is no longer at his/her last known place of address (i.e. they “skipped town”)
Skip trace— To institute a physical or electronic search for data on a skip, either a new address, phone number, POE or bank account
Federal Debt Collection Practices Act (FDCPA) — Passed in 1996, the FDCPA amended the Consumer Credit Protection Act by prohibiting abusive practices by debt collectors such as harassment and other outlined unfair practices
Gramm-Leach-Bliley Act (GLBA) — Requires financial institutions to institute plans to protect the personal data of individuals
Health Insurance Portability and Accountability Act (HIPPA) — Protects the confidentiality and security of healthcare information
Servicemembers Civil Relief Act (SCRA) — Protects those entering, called to active duty or deployed service men and women from certain civil obligations, such as outstanding credit card debt so that can devote their full attention to duty and relive stress on their family members
Telephone Consumer Protection Act (TCPA) — Restricts telephone solicitations and the use of automated telephone equipment, limits the use of automatic dialing systems and outlines conditions for using autodialers by requiring identification and contact information of the caller
Time Barred Debt (TBD)— Under the FDCPA, there is a statute of limitations on how long a debt collector can sue to collect on a debt. After the statute is up, the debt is considered time-barred.
Unfair Deceptive Abusive Acts or Practices (UDAAP) — Protects consumers from unexpected increases in the rates charged on pre-existing credit card balances
Debt collection is directly tied to the court system, which means that collections employees must be well versed in relevant legal terms, documents and procedures as well. You can take look up a variety of legal definitions here.