An open letter from the ARA to Agero, MBSi and RISC

To Agero, MBSi and Recovery Industry Services Company:

The American Recovery Association (“ARA“) prides itself on its demonstrated history of instilling a culture of compliance within the professional recovery industry through years of careful and dedicated efforts and collaboration between ARA, member and non-member recovery agencies, and other compliance professionals and industry stakeholders.

We write this open letter on behalf of the agencies that form the backbone of this culture of compliance.

ARA is deeply concerned about the add-on compliance certification requirement Agero and MB Si have instituted for use of their account placement and tracking software. In our view, this add-on requirement is anti-competitive, monopolistic, and potentially violative of federal antitrust law.

We understand that a particular lender and its servicer require forwarders and recovery professionals to use MBSi ‘s placement and tracking software when servicing a defaulted auto-loan account. The required software is not free; the lender and forwarders pass the licensing cost on to the professional recovery agencies tasked with repossessing the collateral, without any reciprocal compensation.

ARA is not opposed to the use of account placement and tracking software. The problem, in our view, is that MBSi further requires individual agents to obtain a compliance certification from the Recovery Industry Services Company (“RISC”)—an Agero partner—known as Certified Asset Recovery Specialist (“CARS”) in order to utilize the account placement and tracking software. This additional cost for CARS certification is likewise borne by the agencies and continues to increase at an alarming rate with each passing year.

This “add-on” requirement to obtain RISC’s CARS certification, as we understand it, has all the hallmarks of an improper tying arrangement. Put simply, Agero and MBSi appear to have leveraged auto lenders’ business to corner the recovery software and compliance-certification markets—thereby eliminating any meaningful competition in those markets—and are now using that leverage to require CARS certification as a tied product with the MB Si placement and tracking software.

It is ARA’s opinion that this “add-on” requirement results in ever-increasing software and compliance certification costs to individual agencies without any reciprocal increase in compensation for completed work or the option to obtain compliance certification elsewhere.

Additional problems exist. MBSi has represented in certain contexts that only a single lender and its servicer require RISC’s CARS compliance certification as a prerequisite for agents to access MBSi’s software. Yet, in other communications MBSi has represented that “several lenders, who work directly with RISC and/or MBSi, have also pushed for and/or mandated that all persons who access their assignments be CARS certified.”

These seemingly contradictory messages leave ARA to wonder if multiple lenders require this monolithic approach to agent compliance solutions by exclusive use of RISC’s CARS certification. To be sure, if it comes to light that additional lenders or servicers are in fact requiring exclusive CARS certification as a prerequisite to access MBSi’s software, additional questions will arise concerning the propriety of the lender-MBSi-RISC arrangement.

On the other hand, if MBSi is unilaterally implementing the CARS certification requirement, the question will become whether this constitutes a restraint of trade vis-å-vis recovery agents and the lenders and forwarders they serve.

For now, and in any event, the solution to this problem is simple: do away with the RISC certification requirement as a prerequisite to utilizing MBSi’s software and allow agencies to choose the compliance program that is best for them and their agents. ARA trusts that Agero, MBSi, and RISC will promptly remove this “add-on” requirement.