How we can safely work accounts with Creditors after November 29, 2021.

In order for Sarma Collections, Inc., to safely collect debt, clients must take certain actions and provide specific information regarding the debt. We cannot take these actions, do not have this information, and cannot generate it; it can only come from the client.

What information do we need?

The most significant information gap we see right now pertains to the Itemization Dates needed for us to use Reg F’s Model Validation Notice. The Model Validation Notice must include an Itemization date which can be one of five different dates. There are no substitutions and no exceptions; it is one of these five dates, and these five dates only:

1. The Last Statement Date – The date of the last periodic statement, written account statement, or invoice provided to the consumer by the creditor or their service provider. Note: a statement generated by a previous debt collector is insufficient.
2. Charge Off Date – The date the debt was charged off (written off the books as a loss or “uncollectable” debt). Note: It is a fixed date that never changes. It is NOT the same as the placement date which would change every time the debt is placed with a new agency.
3. Last Payment Date – The date the last payment was applied to the debt. Note: this can be a payment made by a 3^rd party such as an insurance company, repo agent, or a previous debt collector.
4. Transaction Date – The date the loan originated or the date the good or service giving rise to the debt was provided or made available to the consumer.
5. Judgment Date – The date of the final court judgment, which determines the amount of the debt owed by the consumer.

In addition to the above dates, creditors need to provide:

1. The name of the creditor to whom the debt was owed on the itemization date.
2. The amount of the debt on the itemization date.
3. The amount of any fees, charges, interest, credits, payments, refunds, or adjustments applied after the itemization date; some of these must be listed in separate buckets. Note: the debt itemization should add up to the current balance on the account.

The CFPB’s intent in creating the Model Validation Notice is clear: it was designed to reduce consumer confusion. The CFPB has explicitly stated that the itemization date is intended to be a date that a consumer will recognize.

What happens if a creditor can’t or won’t provide this information?

Without this information from creditors, we are unable use Reg F’s Model Validation Notice. By not using this notice we will risk lawsuits and potential complaints. This is the only validation notice that Sarma will be using effective November 30^th, 2021 to avoid any risks.

What does a Creditor need to do to ensure its accounts will continue to be collected on and after November 30, 2021?

To limit or eliminate significant downtime in collections, creditors must immediately do the following:

1. Call and ask questions if you have any.
2. Look at your systems, see which itemization date(s) it can provide, confirm your system can convey the accurate balance on that date, and any interest, fees, credits, or adjustments that occurred after that date.
3. Talk to us about the itemization dates your system can provide.

Reg F is the biggest change to the ARM industry in over 40 years, we believe with focus and cooperation, we can ensure we are in compliance with Reg F on November 30, 2021.