Pioneer Credit Recovery in Trouble for IRS Collections Calls

Pioneer Credit Recovery’s IRS Collections Unit is in the Dog House!

On June 23, 2017 four United States Senators sent a letter to the President of Pioneer Credit Recovery and the CEO of Navient, the parent company to Pioneer Credit Recovery, alleging they are abusing tax payers and are in violation of the private collections authorized by the FAST Act.

As we have written previously about how Pioneer Credit Recovery is calling to collect IRS Debts, they have quickly found themselves in hot water due to their collections practices.

Some of the shocking highlights from the letter stem from Pioneer Credit Recovery’s IRS debt collections calling script and training manual. It includes instructions for the collections caller to urge the taxpayer to do the following in order to “find the money.”

  • Empty their 401K
  • Use their credit card
  • Find a co-signer for a loan
  • Sell any stocks and bonds owned
  • Get a loan from your employer
  • Borrow some money from friends and family
  • Take out a second mortgage

The letter alleges the following:

1) Pioneer fails to adequately protect taxpayers from criminals posing as IRS agents.

With the rampant IRS phone scams out there the IRS has put in place requirements for these private collection companies, including Pioneer Credit Recovery, to send a letter to the taxpayer prior to calling about the IRS debt. According to the Senators:

But Pioneer does not adhere to this practice. In cases where taxpayers have not received the initial contact letter from Pioneer, the call script directs Pioneer employees to “update the account, request a certified letter, and suspend the collection activities” only “for 5 calendar days” to allow the taxpayer to receive the letter. II This brief five-day period would allow Pioneer to call taxpayers twice in the same week, even if the taxpayer has not been able to authenticate the caller.

Pioneer’s failure to allow taxpayers adequate time to receive authentication materials by mail may prevent taxpayers from distinguishing IRS impersonators from Pioneer’s own debt collectors.

2) Pioneer pushes taxpayers into products that could risk their home and retirement security

From the letter:

The script for the debt collector states, “Ifunable to come to a resolution, we advise the taxpayer we will notate the account and advise our client that they do not want to voluntarily satisfy their obligation.”15 By using the term “voluntarily satisfy their obligation,” this call script implies that the debt collector will subsequently have means to seize payment involuntarily. Implying the ability to involuntarily seize assets is prohibited under the FDCPA as a “threat to take any action that cannot legally be taken or that is not intended to be taken” since Pioneer does not in fact have the authority to involuntarily collect this debt.16 Intimidating language about “notat[ing] the account… that they do not want to voluntarily satisfy their obligation” should not be included in the call script.

3) Pioneer’s call scripts may violate the Fair Debt Collection Practices Act and provisions of the Internal Revenue Code

This is where it gets downright nasty. The things these debt collectors are trained to say are really unethical and probably illegal. We have obtained a copy of Pioneer Credit Recovery’s IRS collection calling script and training manual and it is quite a read. Some highlights, as described in the letter:

The script for the debt collector states, “Ifunable to come to a resolution, we advise the taxpayer we will notate the account and advise our client that they do not want to voluntarily satisfy their obligation.”15 By using the term “voluntarily satisfy their obligation,” this call script implies that the debt collector will subsequently have means to seize payment involuntarily. Implying the ability to involuntarily seize assets is prohibited under the FDCPA as a “threat to take any action that cannot legally be taken or that is not intended to be taken” since Pioneer does not in fact have the authority to involuntarily collect this debt.16 Intimidating language about “notat[ing] the account… that they do not want to voluntarily satisfy their obligation” should not be included in the call script.

4) Apparent violations of Pioneer’s IRS contract and IRS policies

From the letter:

The potential violations of the FDCPA and the Internal Revenue Code described above are a breach of contract. Pioneer’s contract with IRS states that “failure to comply with applicable laws and regulations shall be considered a breach of contract.”

The IRS contract with all private collection agencies says that  cases must refer back to the IRS for negotiation “if the case involves significant hardship for the taxpayer.” No where in Pioneer’s scripts does it note this option.

“When Congress required the IRS to hire private debt collectors to collect certain tax debts, it did so under strict provisions to ensure that taxpayers were not put at risk during the collection process,” the letter from Senators Warren, Merkley, Brown and Cardin states. “But it appears that Pioneer is not adhering to these protections.”

Jack Remondi, the President and CEO of Navient, Pioneer’s parent corp, responded in in the New York times and astoundingly politicized the accusations of taxpayer abuse. To wit:

“My commitment is to continue to provide superior service to our customers, including taxpayers and student loan borrowers. Further, I am committed to defend any false allegations against the 7,000 Navient employees who work every day to deliver this value. I retain my faith that the facts will eventually be reported, putting an end to the false allegations put forward by those with a political agenda.

Conclusion

If you have been contacted by Pioneer, or any of these collection companies, you can talk directly to the IRS and cut them out. If you are uncomfortable speaking directly with the IRS (you have good reason to avoid this), you can have a tax relief professional conduct all communication on your behalf.

You can read a full version of the actual letter to Pioneer Credit Recovery here.