Collection Agencies Industry Terminology

A2P 10DLC

The US carrier framework for Application-to-Person messaging over local 10-digit phone numbers. Requires brand and campaign registration, use-case vetting, opt-in/opt-out compliance, and adheres to throughput and content policies for SMS to consumers.

Register our 10DLC campaign before sending payment reminders; Include STOP, HELP, and opt-out language per 10DLC rules; Our carrier throughput for 10DLC is capped, so schedule SMS in batches.

ACDV (Automated Credit Dispute Verification)

The electronic form sent by credit bureaus to data furnishers to investigate consumer credit reporting disputes and provide verification, corrections, or deletions.

We received an ACDV via e-OSCAR and must respond within the FCRA timeframe; Attach the billing statements to the ACDV response; Update Metro 2 after closing the ACDV as verified.

ACH (Automated Clearing House)

The US electronic network for bank-to-bank payments. Agencies use ACH for recurring payment plans, settlements, and one-time debits with proper authorization and compliance.

Set the payment plan as monthly ACH debits on the 15th; Verify bank account ownership before initiating ACH; Follow NACHA rules for re-presentment of ACH returns.

Affidavit of Debt

A sworn statement attesting to the amount owed and the authenticity of account records, often required for litigation to obtain a judgment.

The attorney needs a notarized Affidavit of Debt before filing suit; Ensure the affidavit states the charge-off balance and itemization; The client’s custodian of records signed the affidavit.

Automatic Stay

A legal injunction that halts collection efforts immediately upon a bankruptcy filing. Violations can result in penalties and damages.

Stop all collection activity due to the debtor’s bankruptcy automatic stay; Close dialer campaigns and mail on the stayed accounts; Note the case number and chapter under the stay.

Bankruptcy Discharge

A court order that wipes out personal liability on eligible debts after bankruptcy, permanently barring collection of those discharged obligations.

Write off the account after the Chapter 7 discharge; Do not report balances on discharged debts; Confirm whether the debt was reaffirmed or excluded before closing.

Bona Fide Error Defense

An FDCPA defense allowing a collector to avoid liability for an unintentional violation if it occurred despite procedures reasonably adapted to avoid such errors.

Our procedures support a bona fide error defense to this FDCPA claim; Document the training and audits to show a genuine mistake; The dialer mislabel was unintentional and promptly corrected.

Cease and Desist

A consumer’s directive requiring an agency to stop communications, often triggering strict limits under FDCPA and state laws (except for specific notices).

Mark the consumer communication preference as cease and desist; Send written confirmation and stop all calls; Restrict contact to attorney-of-record after the cease request.

CFPB (Consumer Financial Protection Bureau)

The federal regulator overseeing debt collection, credit reporting, and consumer financial protection, issuing rules (e.g., Reg F), guidance, and enforcement actions.

Review CFPB enforcement actions when updating policies; Submit complaint responses through the CFPB portal; Align our CMS with CFPB supervisory expectations.

Charge-Off

An accounting event where a creditor writes a delinquent debt off as a loss for bookkeeping purposes. It does not eliminate the consumer’s obligation.

The creditor charged off at 180 days past due; Use the charge-off balance as the itemization start under Reg F; Charge-off doesn’t erase the debt—it changes the creditor’s accounting.

CMS (Compliance Management System)

The integrated framework of policies, procedures, training, monitoring, and issue remediation used to manage compliance risks across collection operations.

Our CMS includes policies, training, monitoring, and complaint management; Perform annual CMS audits; Track corrective actions in the CMS log.

Consent to Call/Text

Consumer permission required under laws like TCPA (and carrier rules) to place certain calls or send texts, particularly with automated systems.

Capture express written consent for autodialed texts; Log and honor revocations of consent immediately; Our dialer suppresses numbers without TCPA consent.

Credit Reporting (Metro 2)

The process of furnishing account data to credit bureaus using the Metro 2 standard, including accurate statuses, DOFD, and dispute handling under FCRA.

Furnish monthly updates in Metro 2 format; Do not re-age the account in Metro 2; Suppress reporting on time-barred medical debt if policy requires.

Data Furnisher

An entity that supplies consumer account information to credit bureaus. Furnishers must ensure accuracy, investigate disputes, and follow FCRA and CFPB guidance.

As a data furnisher we must maintain FCRA accuracy and integrity; Respond to ACDVs within required timeframes; Implement policies for direct disputes from consumers.

Debt Validation

The consumer’s right to receive information substantiating the debt and the collector’s obligation to provide required disclosures and verification under FDCPA/Reg F.

Send the Model Validation Notice within five days of first communication; Pause collection efforts until validation is provided when required; Provide itemization and creditor info in the validation response.

DOFD (Date of First Delinquency)

The month and year of the consumer’s initial delinquency that led to charge-off. Critical for FCRA obsolescence, accurate credit reporting, and dispute responses.

Use DOFD to calculate the obsolescence date for reporting; Do not reset DOFD when the consumer makes a partial payment; Confirm DOFD from client placement data.

Do Not Call (DNC) Scrub

The process of removing phone numbers from dialing lists that appear on federal/state Do Not Call registries or internal do-not-contact lists to reduce legal risk.

Scrub campaigns against the National DNC and state lists; Exclude cell numbers without consent; Re-scrub weekly to catch new registrations.

Dunning Letter

A collection letter sent to request payment and provide required disclosures, often forming part of the initial communication sequence.

The first dunning letter includes the mini-Miranda and dispute rights; Trigger the second notice after 15 days; Use clear itemization per Reg F guidance.

Early-Out Collections

Pre-default collection services performed shortly after delinquency, typically first-party style and customer-service oriented to prevent charge-off.

Our early-out team handles accounts 0–90 days past due; Use softer scripts focused on customer service; No credit reporting in early-out per client policy.

e-OSCAR

The online platform used by credit bureaus and furnishers to exchange and resolve consumer credit reporting disputes (ACDVs).

Log into e-OSCAR to process today’s disputes; Attach supporting documents when responding; Track ACDV cycle times in the e-OSCAR dashboard.

FCRA (Fair Credit Reporting Act)

Federal law governing consumer credit reporting, including accuracy, dispute investigations, data furnishing obligations, and permissible purpose.

Follow FCRA when furnishing and correcting data; Provide accurate DOFD and status codes; Investigate disputes within statutory timelines.

FDCPA (Fair Debt Collection Practices Act)

The primary US federal law regulating third-party debt collection conduct, disclosures, communication limits, and prohibitions on unfair or deceptive practices.

Include the mini-Miranda in initial communications; Avoid contacting at inconvenient times under FDCPA; Document procedures for the bona fide error defense.

Garnishment

A court-ordered process to withhold a portion of wages or funds from a bank account to satisfy a judgment.

Serve the employer with a wage garnishment after judgment; Calculate state-specific garnishment limits; Cease garnishment upon bankruptcy filing.

HIPAA (Health Insurance Portability and Accountability Act)

US health privacy and security rules governing protected health information. Relevant to medical debt collections and data handling.

Do not include PHI in emails to consumers; Execute BAAs with vendors handling medical data; Limit access to medical accounts to HIPAA-trained staff.

Itemization Date

A specific reference date required by Reg F for the Validation Notice to itemize the debt (e.g., last statement, charge-off, or judgment date).

Choose charge-off date as the itemization date for the MVN; Show interest and fees since the itemization date; Keep the itemization date consistent across channels.

Judgment

A court’s final decision that a consumer owes a debt, enabling enforcement remedies like garnishment or liens subject to state law.

File for judgment after proper service and affidavits; Record the judgment lien where applicable; Track post-judgment interest by state statute.

Limited-Content Message

A voicemail defined by Reg F that includes only certain elements (like business name, request to reply, and contact info) and is not a communication under FDCPA.

Leave a limited-content voicemail with only permitted elements; Train agents to avoid additional language; Use LCM templates to reduce FOTI risk.

Litigator Scrub

The practice of removing numbers associated with professional plaintiffs or frequent litigators to reduce TCPA and FDCPA litigation risk.

Suppress known TCPA litigators from dialer lists; Use a litigator database before SMS campaigns; Re-scrub monthly to update the exclusion list.

Mini-Miranda

The FDCPA-required disclosure that a communication is from a debt collector attempting to collect a debt and that any information obtained will be used for that purpose.

State this is an attempt to collect a debt at the start of the call; Include the mini-Miranda in the first letter; Ensure Spanish scripts include the disclosure.

Model Validation Notice

The CFPB’s model template for the initial Validation Notice under Reg F, offering a safe harbor if used correctly and fully populated.

Implement the CFPB’s MVN template for safe harbor; Populate itemization fields and dispute tear-off; Keep the MVN in plain language and required format.

NACHA Rules

Operating rules for ACH payments governing authorizations, returns, data security, and dispute handling for electronic debits and credits.

Obtain proper ACH authorization per NACHA; Follow timelines for R10 and R11 returns; Securely store and tokenize bank details to meet NACHA and PCI expectations.

Payment Arrangement

An agreed schedule of partial payments to resolve a debt over time, documented, consented, and monitored for compliance and performance.

Set a three-month payment plan with due dates; Document hardship terms and confirm in writing; Auto-cancel the plan after two broken promises.

PCI DSS (Payment Card Industry Data Security Standard)

Security standards for handling cardholder data. Agencies must ensure compliant storage, transmission, and processing when accepting card payments.

Never store full PAN or CVV in recordings; Use a PCI-compliant payment gateway; Pause call recording during card capture to maintain PCI scope.

PTP (Promise to Pay)

A consumer’s stated commitment to pay a certain amount by a certain date, used to forecast cash flow and manage follow-up actions.

Log a PTP for the 25th and set a reminder; Apply broken-promise workflows after a missed PTP; Use PTP rates as a leading performance KPI.

Re-Aging

Illegitimately changing the delinquency timeline to make an account appear newer than it is. Prohibited by FCRA and industry standards.

Never re-age an account to appear less delinquent; Correct any inadvertent re-aging in Metro 2; Audit client placements for re-aging risk.

Reg F (Regulation F)

CFPB regulation implementing the FDCPA, setting standards for disclosures, call frequency, validation notices, limited-content messages, and recordkeeping.

Configure dialer to Reg F call frequency limits; Use the Model Validation Notice for safe harbor; Apply limited-content message rules to voicemails.

Remittance File

A periodic report to creditors detailing collected amounts, fees, chargebacks, and balances due, used to reconcile trust accounts and client statements.

Send the client weekly remittance files with payments and fees; Reconcile the trust account to the remittance; Include chargeback adjustments in the file.

Revocation of Consent

A consumer’s withdrawal of prior permission to be called or texted. Must be promptly recorded and honored to remain compliant.

Honor STOP requests immediately for SMS; Record TCPA consent revocations in the CRM; Suppress numbers and emails after revocation.

Right-Party Contact (RPC)

Successful contact with the actual consumer or authorized party responsible for the debt, typically verified before discussing account specifics.

Verify RPC before discussing account details; Use authentication questions to confirm RPC; Track RPC rate as a key effectiveness metric.

SCRA (Servicemembers Civil Relief Act)

Federal protections for active-duty servicemembers, including interest caps, stays, and additional procedural safeguards affecting collections.

Run SCRA checks before litigation; Reduce interest rates for eligible servicemembers; Suspend collection on deployed consumers when required.

Segmentation Strategy

The practice of dividing accounts into treatment groups based on risk, balance, propensity-to-pay, demographics, and channel preferences to optimize results.

Route high-propensity accounts to SMS-first workflows; Assign low-balance accounts to digital-only queues; Use credit and behavioral scores to segment work.

Settlement in Full

A negotiated payoff amount less than the full balance that resolves the account, typically documented with terms and timing and then reported accordingly.

Offer a 60 percent settlement if paid by month-end; Confirm settlement terms in writing before payment; Report settled-in-full status per Metro 2 after payment.

Skip Tracing

The process of locating consumers using external databases, public records, and proprietary tools to update contact information.

Use batch skip tools to update phone numbers and addresses; Validate new numbers before dialing; Document sources used in skip tracing for audits.

Statute of Limitations

The legal time limit to file a lawsuit for a debt. After expiration, the debt is time-barred for litigation though collection may still be permitted with restrictions.

Flag accounts nearing the statute; Avoid threatening suit on out-of-stat debts; Determine the applicable statute based on state and claim type.

STIR/SHAKEN

Caller ID authentication framework that helps prevent spoofing and reduces call blocking/labeling, improving answer rates for legitimate calls.

Ensure outbound calls are signed with A-level attestation; Monitor call labeling and blocking analytics; Work with carriers to improve STIR/SHAKEN reputation.

TCPA (Telephone Consumer Protection Act)

Federal law restricting telemarketing and automated calling/texting, requiring consent and honoring do-not-call requests, with significant statutory damages for violations.

Obtain prior express consent before autodialed texts; Maintain internal do-not-call lists; Use manual dialing for numbers without TCPA consent.

Third-Party Collections

Collections performed by an agency on behalf of a creditor rather than by the creditor itself, triggering FDCPA requirements.

As a third-party agency, include the mini-Miranda in calls; Keep client data segregated; Follow FDCPA restrictions applicable to third parties.

Time-Barred Debt

A debt for which the statute of limitations to sue has expired. Collectors must follow special disclosure and conduct rules depending on jurisdiction.

Disclose when the debt is time-barred where required; Do not threaten suit on time-barred accounts; Avoid partial payments that might revive the statute in some states.

UDAAP (Unfair, Deceptive, or Abusive Acts or Practices)

A CFPB enforcement standard prohibiting practices that are unfair, deceptive, or abusive toward consumers in financial services, including collections.

Avoid implying credit reporting where none occurs; Use clear, non-misleading settlement terms; Vet vendor scripts for potential UDAAP issues.

Vendor Management

The governance of third-party service providers, including due diligence, contracts, monitoring, and audits to manage operational and compliance risk.

Perform due diligence and ongoing monitoring of letter vendors and dialers; Include SLAs and compliance requirements in contracts; Conduct annual vendor audits.