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Collection Service Board debates whether statute covers business debt and accepts amended legal report
Summary
The Tennessee Collection Service Board discussed whether its statute or board rules determine oversight of collectors pursuing business (commercial) debt, accepted a 34-case legal report with one closure and two referrals to attorneys general, and directed staff to record discussed changes. The vote was unanimous.
The Tennessee Collection Service Board on April 8 debated whether state law or board rules govern the licensing and discipline of firms collecting business (commercial) debt, then unanimously accepted an amended legal report covering 34 complaints.
Legal counsel Joe Wharton told the board that the board's underlying statute defining "collection service" does not specify the party being collected from, while the board's rule (Rule 0320-05) frames standards of practice with a focus on "consumers." "The rules are more specific," Wharton said, adding that "the statute does not" limit the definition to consumer debt. He recommended the board consider each case on its facts and noted that if a respondent were to litigate, a court could provide a definitive interpretation.
Chairman Chip Helman said the board's historic practice has been to treat unlicensed collection activity the same way even when the debt was commercial, often resolving matters with a consent order and modest civil penalty. "I've always viewed our true purpose is to protect consumers from harm," Helman said, explaining that past consent orders in similar circumstances have typically assessed $500.
Board members agreed to three immediate changes Wharton described: (1) close complaint 2026014341 after the respondent produced a continuation certificate proving a surety bond remained effective; (2) keep the two representation cases (2025028321 and 2025022121) recommended for closure and flagging but also refer them to the attorney general with jurisdiction for further review; and (3) continue to evaluate case 2026004701 (listed as complaint 18), which raises the central question whether the board's rules or the broader statute should control enforcement when the debt at issue is commercial rather than consumer.
Tony Zicovich said the commercial-debt situation "caught me off guard" and described it as a gray area; the board discussed the value of consistency and whether to continue the longstanding practice of consent orders in such matters. Wharton warned that a litigated case could require the board to present both the statute and its rules to a judge for resolution.
The board voted unanimously to accept the legal report as amended. Wharton read the 34 complaint numbers into the record before discussion. The board did not impose new civil penalties in this meeting; deliberations about penalty amounts were handled separately under new business.
Next steps: the board accepted the report with the recorded changes and (separately) directed staff to prepare a proposed civil-penalty matrix for future consideration.
