Best Practices for Call Baiting in Debt Collection

The debt collection process can be tricky. Collection agencies must follow regulations strictly–or you’ll find your business in jeopardy. Compliance can be even harder when scammers actively try to disrupt your debt collection practices through call baiting.

Why is call baiting done and what can debt collectors do to prevent the practice? Here’s what debt collection experts David Kaminski, Partner at Carlson & Messer LLP, Kelly Parsons-O’Brien, President at Pacific Credit Services, and Mike Cheek, VP at California Business Bureau say.

First, What is Call Baiting?

The term call baiting may seem self-explanatory—baiting a debt recovery professional during a phone call. But what are they baiting the agent to do?

Call baiting is when the debtor attempts to trick you into breaking a law. This can be a Fair Debt Collection Practices Act violation, or violation of other laws or regulations which pertain to debt collectors.

Why Do People Call Bait?

In general, call baiting is done for one basic reason. “They [call baiters] want to engender some kind of litigation or legal claim,” says Kaminski, Partner at Carlson & Messer LLP, and Chair of the Financial Services and Class Action Group.

But more specifically, there are a few different reasons a debtor may engage in call baiting.

Call Baiting Reasons

Monetary Gains

Many individuals bait collection agencies in order to file lawsuits later. The goal is to trip up the debt recovery professional through questions and scripts.

Credit Repair

Some people call bait intending to seek to change their credit report. Some baiters hope suing an agency can lead to a settlement.

The aim of such a settlement would be to cause the agency to agree to remove items from the debtor’s credit report.

To Buy Time Or Avoid Bankruptcy

Some baiters are just trying to stall between attempts to collect their debt. For example, they may ask confusing questions, then suggest the agent call back in 30 days.

They often do this to buy time and avoid bankruptcy.

Prior Bad Experience

Some callers are scared. A bad experience with a previous collector may cause a debtor to worry. Their questions sound like call baiting, but not on purpose.

Industry Misperceptions

Some debtors have never spoken to a collector before. They only know what they’ve seen on TV or in movies—a negative view of debt collectors.

Their suspicions put them on the defensive and cause them to ask many questions. The questions and defensive manner may cause these consumers to be mistaken for baiters.

Common Call Baiting Scenarios

There are a few ways a payday can come from a call baiting violation. A few examples are actual damages, statutory damages and fines for willful violation of debt collection, communication, or call recording laws. If you lose a lawsuit, you may also have to pay the debtor’s attorney’s fees.

Here are some of the most common scenarios call baiters use to prompt a violation.

Through the FDCPA or UDAAP

Call baiters are often looking for a violation of the Fair Debt Collection Practices Act (FDCPA).

In rare cases, a baiter may try to prompt the Consumer Financial Protection Bureau or Federal Trade Commission to deem the violations as unfair, deceptive, or abusive acts and practices (UDAAPs).

Attorney Representation/Lawsuits

Call baiters may reach out after seeking attorney representation. This is not only a tell, it is the violation scenario they are trying to provoke.

Keep in mind that if the debtor reaches out, you are still in danger of being charged for a violation. Some baiters will contact collectors after seeking representation in hopes of tricking them into improper conduct.

Overshadowing

Call baiters may attempt to prevent disclosures or cause overshadowing through interrupting. Disrupting the flow of the debt collector’s disclosures may cause one to be overlooked.

Credit Reporting Impact

A popular scenario for a call baiter is to ask how their debt will impact their credit. For instance, a baiter may ask during the 30-day validation period whether the debt will be reported to the credit bureaus.

Consent Withdrawal

Withdrawing consent can be a tricky scenario to deal with. Some call baiters are purposefully ambiguous with how they revoke consent.

Your agent might not understand the revocation. Failing to note consent has been revoked will trigger a violation as soon as the consumer is contacted again.

CALL BAITING TELLS

When a caller asks, "Are you recording me?"
Hearing someone speaking in the background.
Using a speakerphone.
Talks like a script.
Familiar with laws.
Tries to start a fight.
Mentions being represented by an attorney or filing for bankruptcy.

Preventing Call Baiting

The first line of defense against call baiting is treating debtors with respect.

Kindness during debt collection cuts down on baiting issues by defusing tense situations. Train all of your collectors to be as polite as possible with callers.

What are some other debt collection practices that can protect you from call baiting?

Document Callers Reaching Out Despite Attorney Representation

Create a policy for dealing with debtors who are represented by an attorney. Ensure your collection agents take detailed notes on their calls, especially those who mention representation.

If a caller is still working with a lawyer, ask them for the contact information and end the conversation. Whenever possible, it is best to get written permission directly from the attorney before having any more contact with a debtor.

If permission can’t be obtained, “flag the account as one to be handled by a supervisor,” says Kaminski.

If You Don't Know the Answer, DO NOT Answer

Giving an incorrect answer is not a good policy in customer service. But, in the debt collection scenario, it can cause your company to be sued.

Train your debt collectors. If they are not sure of how to answer a question, they shouldn’t give one. Many baits can be defused with an effective debt collection call script that provides a roadmap for the conversation.

Reroute the Conversation

If the debtor is baiting, they may try to steer the items discussed with the agent. Be mindful of this tactic and be prepared to bring the conversation back to appropriate topics.

Transfer to Supervisor

Teach all your debt collectors that there is no shame in transferring a call to their supervisor. Make this practice part of your policies and procedures for suspected call baiters. Also train supervisors with the effective debt collection scripts that address how to respond.

Document the Call in Detail

Be sure suspicious calls have been documented in detail. Leave extensive notes so others who interact with the caller are prepared for future interactions.

Politely End the Call

Remember to maintain your collection communications etiquette and remain calm during a call bait. But if all else fails, politely hang up. If you can’t see a way forward with the debtor, tell them politely that you must disconnect the call.

In the end, Parsons-O’Brien suggests that call baiters be ruled out as quickly as possible. Her advice? “Ask yourself: Is this one account really worth it?”

Consider whether you really need to collect on a problem debtor’s account. If your greatest concern is protecting your agency, the answer is no.

Compliance Management Systems

An in-depth, up-to-date Compliance Management System helps protect your collection practice from call baiting. The components your CMS should include:

Categorizing: List all of your compliance obligations with statutes such as the FDCPA. Get a good understanding of the laws and regulations you must follow. Be thorough.

Risk Assessment: Take a look at what areas of your business are prone to risk. In this case, how can a baiter cause your agents to violate the rules?

Implementing Controls: Put in place the controls and corrective actions that can prevent a call baiting situation from happening within your agency.

Education: Educate your employees.

Audit: Audit the policies, procedures and work instructions you have in place. Fix any areas you find that are currently causing non-compliance. If an issue has already arisen, conduct a root cause analysis to remedy the problem.

Parsons-O’Brien, President of Pacific Credit Services, also notes that speech analytics can aid you in recognizing call baiting questions. For example, her company uses this technology to identify questions about credit reports.

If this is something you use in your collection agency, Kaminski recommends that you test your speech analytics system to ensure it is working the way it is supposed to. As with any technology, it can fail to work properly if it isn’t maintained.

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Training Program

A CMS is useful, but only if your debt collectors know what’s in it. Train them about the laws and regulations they need to follow. Then make sure they know how baiters may try to trick them into a violation.

“It’s really important that you engage all your staff in your training,” says Cheek, Vice President of Collections and Compliance at California Business Bureau, Inc. “Especially your reception people and admin staff who take care of inbound calls. It’s important they recognize some of these signs.”

A few essentials to have in your training program are:

Detection - Teach your agents how to identify baiting situations.
Scripts - Provide a baiting script or process your debt collectors can follow.
Reminders/Updates - Keep up to date on new baiting tactics. Anytime a new bait comes along, alert your staff.

Common Baiting Questions

What will happen if I don’t pay?
How will my credit be affected?
Are you going to garnish my wages?
When is my payment due?
Do I have to dispute in writing?

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