ACA International’s Code of Ethics and Code of Operations Ethical Considerations for the Credit and Collection Industry © 2007 ACA International. All Rights Reserved.

“Particularly in this day and age of complex regulatory requirements, companies err if they assume that their tone can be set by having effective procedures and policies in place. Having effective procedures and policies is certainly necessary, but it’s not sufficient. A company must also have the right people in leadership positions, leaders who are truthful, transparent, and fair, just as they expect their companies and employees to be. That means leaders must not only talk the talk, they must also walk the walk … a whole succession of technological revolutions can’t do away with the need for character or the ability to think and act ethically.” Harvey Pitt, former Chairman of the SEC © 2007 ACA International. All Rights Reserved.

What does “ethics” mean? 1 the discipline dealing with what is good and bad and with moral duty and obligation 2 a: a set of moral principles: a theory or system of moral values b: the principles of conduct governing an individual or a group c: a guiding philosophy d: a consciousness of moral importance Source: Merriam-Webster’s Online Dictionary: webster.com/dictionary/Ethics © 2007 ACA International. All Rights Reserved.

Why do businesses and industries need ethics programs? Avoid hidden costs associated with unethical behavior Avoid hidden costs associated with unethical behavior Increase productivity Increase productivity © 2007 ACA International. All Rights Reserved.

Hidden costs of unethical behavior Harms client relationships Harms client relationships Increases risks for scandal Increases risks for scandal Increases risk of employee fraud Increases risk of employee fraud © 2007 ACA International. All Rights Reserved.

Good business ethics can drive productivity Put the mission first, above personal considerations Put the mission first, above personal considerations Use common language of values, to increase mutual understanding Use common language of values, to increase mutual understanding Make sure your organization lives up to your employees’ values Make sure your organization lives up to your employees’ values © 2007 ACA International. All Rights Reserved.

Good business ethics can drive productivity (cont.) Make ethics decisions in groups Make ethics decisions in groups Develop a code of ethics and code of conduct, and stand behind them Develop a code of ethics and code of conduct, and stand behind them Fully support the ethics program and set the example Fully support the ethics program and set the example © 2007 ACA International. All Rights Reserved.

Good business ethics can drive productivity (cont.) Foster transparency and trust Foster transparency and trust Strengthen your business ethics skills Strengthen your business ethics skills Understand that no one’s perfect Understand that no one’s perfect Pay attention to the little things Pay attention to the little things Source: Josephson Institute Reports © 2007 ACA International. All Rights Reserved.

ACA’s Code of Ethics Last updated in 1997 Last updated in 1997 July 25, 2007, ACA’s Board of Directors approved the new Code of Ethics and Code of Operations July 25, 2007, ACA’s Board of Directors approved the new Code of Ethics and Code of Operations Passage of the new code was accompanied by the adoption of new Procedural Rules Passage of the new code was accompanied by the adoption of new Procedural Rules © 2007 ACA International. All Rights Reserved.

Promote and encourage “the highest level of integrity” within the industry Cooperate and abide by the Association’s self- regulation efforts (Ethics Rule I.D) Cooperate and abide by the Association’s self- regulation efforts (Ethics Rule I.D) Definition of Member Definition of Member Adopt an internal code of conduct (Ethics Rule II.A.8.) Adopt an internal code of conduct (Ethics Rule II.A.8.) Place any ACA member on notice of any alleged violation and seek to identify a solution (Ethics Rule II.B.10) Place any ACA member on notice of any alleged violation and seek to identify a solution (Ethics Rule II.B.10) © 2007 ACA International. All Rights Reserved.

Be fair and respectful to employees, associates, competitors, customers, the public and employers Treat consumers with consideration and respect (Ethics Rule II.A.1) Treat consumers with consideration and respect (Ethics Rule II.A.1) Communicate with consumers with honesty and integrity (Ethics Rule II.A.2) Communicate with consumers with honesty and integrity (Ethics Rule II.A.2) Avoid threatening or initiating collection litigation on time barred debts (Ethics Rule II.A.6) Avoid threatening or initiating collection litigation on time barred debts (Ethics Rule II.A.6) © 2007 ACA International. All Rights Reserved.

Commit to the development and use of the highest standards and practices for processing and handling consumer, customer and competitor disputes Cooperate with self-regulation efforts, complaint resolution Cooperate with self-regulation efforts, complaint resolution Designate contact person “having sufficient responsibility to deal with consumer complaints” (Ethics Rule I.E) Designate contact person “having sufficient responsibility to deal with consumer complaints” (Ethics Rule I.E) Promptly respond to all complaints Promptly respond to all complaints (Ethics Rule I.F) © 2007 ACA International. All Rights Reserved.

Validation Requests, Verification and Disputes Upon receipt of a written request for verification from a consumer, suspend collection activities on the account and provide debt verification, or Upon receipt of a written request for verification from a consumer, suspend collection activities on the account and provide debt verification, or If agency chooses not to provide verification or is unable to provide verification, cease collection activity, remove derogatory credit items (if any) from consumer’s credit record, and notify client/credit grantor that collection activity was terminated due to the inability to provide verification of the debt (Ethics Rule II.A.3) If agency chooses not to provide verification or is unable to provide verification, cease collection activity, remove derogatory credit items (if any) from consumer’s credit record, and notify client/credit grantor that collection activity was terminated due to the inability to provide verification of the debt (Ethics Rule II.A.3) © 2007 ACA International. All Rights Reserved.

Validation Requests, Verification and Disputes (cont.) If requested by the consumer in writing, notify the consumer that collection efforts have been terminated by the member (Ethics Rule II.A.3.d) If requested by the consumer in writing, notify the consumer that collection efforts have been terminated by the member (Ethics Rule II.A.3.d) © 2007 ACA International. All Rights Reserved.

Credit Reporting (Operations Rule II.B) Obtain authorization of the creditor, forwarder or party holding title to the account to perform credit reporting Obtain authorization of the creditor, forwarder or party holding title to the account to perform credit reporting Accurately report date of delinquency as required by the FCRA Accurately report date of delinquency as required by the FCRA Take reasonable steps not to report information that is currently furnished by another data furnisher Take reasonable steps not to report information that is currently furnished by another data furnisher Delete information upon canceling and returning an account Delete information upon canceling and returning an account © 2007 ACA International. All Rights Reserved.

Purchasing Accounts When purchasing accounts, seek to obtain access to accurate and complete information and establish a chain of title (Ethics Rule II.A.7) When purchasing accounts, seek to obtain access to accurate and complete information and establish a chain of title (Ethics Rule II.A.7) © 2007 ACA International. All Rights Reserved.

Financial Integrity Meet financial obligations (Ethics Rule I.G) Meet financial obligations (Ethics Rule I.G) Make settlement with clients at least once each calendar month (Operations Rule II.A.1) Make settlement with clients at least once each calendar month (Operations Rule II.A.1) Comply with contractual obligations to NACHA (Ethics Rule II.A.5) Comply with contractual obligations to NACHA (Ethics Rule II.A.5) © 2007 ACA International. All Rights Reserved.

Prevention of Identity Theft In instances of alleged identity theft, fraud or mistaken identity, conduct a reasonable investigation to determine the validity of the debt, the identity of the obligor on the account and the accuracy of the information in the possession of the member (Ethics Rule II.A.4) In instances of alleged identity theft, fraud or mistaken identity, conduct a reasonable investigation to determine the validity of the debt, the identity of the obligor on the account and the accuracy of the information in the possession of the member (Ethics Rule II.A.4) © 2007 ACA International. All Rights Reserved.

Data Security and Privacy Use reasonable efforts to safeguard the confidentiality, integrity and availability of consumer information entrusted to the member’s possession and control (Ethics Rule II.B.4) Use reasonable efforts to safeguard the confidentiality, integrity and availability of consumer information entrusted to the member’s possession and control (Ethics Rule II.B.4) Any healthcare account forwarded for collection must be serviced according to a business associate agreement between the Forwarder and Forwardee (Operations Rule IV.X) Any healthcare account forwarded for collection must be serviced according to a business associate agreement between the Forwarder and Forwardee (Operations Rule IV.X) © 2007 ACA International. All Rights Reserved.

So what now? Frequently Asked Questions © 2007 ACA International. All Rights Reserved.

Additional Questions Please direct any questions you have to Please direct any questions you have to © 2007 ACA International. All Rights Reserved.

These materials are not legal, accounting, or consulting advice and should not be relied upon as such. Attendees should consult with independent legal, accounting or consulting professionals for advice pertaining to their operation and unique facts and circumstances. ACA International © 2007 ACA International. All Rights Reserved.