The Elephant In The Room - Call Management Record For Note Investors

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The Elephant In The Room - Call Management Record For Note Investors

Imagine this scenario: You are sitting on the beach, sipping a cool drink, and enjoying the ocean when you get a call from your office staff. Apparently, the Jones, from whom you are attempting to collect a debt, are suing you.

“Why?” you ask, trying to remember the last time you had contacted them.

Your secretary states that they are suing you under violations of FDCPA and that the lawyer is asking for others to step forward in their claim, as they will also be able to sue.

When you talk to your lawyer, you ask what damages they can really get.  “Well,” she says, “they can sue you for physical and emotional stress, lost work hours, statutory damages, and attorney’s and court fees.  On top of that, other people who felt harassed can also sue you, like their employers, family members, and others whom you may have sought for contacting to try and reach the Jones.  Each one can sue for the lost wages, emotional stress and even statutory damages.

“Potentially, each case could be worth thousands, maybe more.”

Dumbfounded, you state that you only reached out to them a few times. 

“What is a few times?” Your lawyer asks.

“I don’t know, maybe 10 times?”

She asks for the phone records. Then it hits you, you have no way to prove that their lawsuit is unfounded.  Not only do you not have recordings, you don’t even have timestamped phone calls.

“I’m sorry,” your lawyer says, “you may not have much of a case. Get prepared for a ‘fun’ ride.”

The elephant we are talking about this month is the mistake that so many investors make. Namely: not having a CMR. A Call Management Record. The above story could have had a much different outcome if the character had a call management system in place to timestamp the calls. Better yet, record them completely.

Once a debtor sues someone for violating FDCPA, the primary burden of proof is upon the defendant.  If you cannot prove the amount and times of the calls, it is too ambiguous for the judge to make a ruling in your favor.  At that point you could be on the hook for all the following damages: 

Damages for Physical Distress

Some people actually get physical symptoms of stress, like heart palpitations, ulcers, etc. for which you can be liable if you are found in violation of FDCPA.

Damages for Emotional Distress

Very ambiguous, but liability can be on your shoulders if their relationships and other peace of mind is damaged.

Lost Wages Recovered 

If they miss work, you may have to pay them for it.

Wage Garnishment Recovery 

If you had a judgement for wage garnishment, it can be reversed and you may have to pay it all to the debtor.

Statutory Damages of $1,000

Attorney Costs and Fees Recovered

The judge may (and usually does) implement injunctive remedies such as forcing you not to call. Ever. And stop sending letters.

Not only that, but if any third party (such as employers, even secretaries, family members, etc.) feels like you violated the law and called them looking for your debtor, they can also sue you.

There are many software systems to choose from. But the same thing applies in all of them, you cannot contact the borrower before 8:00 am or after 9:00 pm.  That is local time to the borrower.  Therefore, if you call from the East Coast at 8:30 am and your borrower lives in California, where it is 5:30 am, you just violated FDCPA.  Same result if you call from California at 7:00 pm and the borrower lives in Florida...it’s 10:30 pm there at that time and you have to be aware of it.

Call record software helps immensely to manage these potential violations. Not only that, but time tracking and more options could help you with the burden of proof that you could need in court.

Some of the call software is listed here, though we endorse none of them. Please research them thoroughly and GET THEIR SERVICE IMPLEMENTED ASAP!

The Loan Office software is probably the standard of the industry. This software is powerful and contains added functionality as well. For notes, the Mortgage Office suite is especially pertinent.

Note Dashboard is robust and scaleable, plus you can try it for free before you buy it!

NoteWerx is another cloud-based software solution.

At the end of the day, it doesn’t matter which one of these (or other software) you use, the primary function that you need is call tracking and/or time stamping functionality.

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Saprina is a nationally recognized expert in mortgage and trust deed investing. She has over 18 years of collections and mortgage experience, and has worked debt portfolios for both national financial institutions and individual note investors. She has extensive experience with loan modification, foreclosure, short sales, cash for keys, and mortgage deficiencies. Saprina is a sought-after speaker and readily shares her knowledge and experience.