Glossary
Collections, Receivables and Auto Finance Glossary
68 terms in 6 groups, written for lenders, dealer principals and collections managers. Terms that come from a statute or rule name the section and link the primary source; operating terms describe practice as TEKS runs it. Nothing here is legal advice — how a rule applies to a particular program is a question for your counsel.
Group 1
Delinquency and portfolio
How a receivables portfolio is measured: the stages an account moves through and the rates that describe the book.
- Delinquency
The state of an account on which a scheduled payment has not been received by its due date. Delinquency is measured in days past due and reported either as a share of accounts or as a share of outstanding balances, and the two are not interchangeable.
- Days past due(DPD)
The number of days since the oldest unpaid scheduled payment was due. It is the clock every delinquency bucket, cadence rule and roll-rate report runs on.
- Delinquency bucket(aging bucket, stage)
A range of days past due that groups accounts for reporting and treatment, commonly 1 to 29, 30 to 59, 60 to 89 and 90 or more days. Contact cadence, escalation and the collector assigned are usually defined per bucket.
- Serious delinquency(90+ days delinquent)
An account 90 or more days past due. The Federal Reserve Bank of New York reports the share of auto loan balances in this state each quarter, which is why it is the most quoted delinquency benchmark for auto lending.
Source: Federal Reserve Bank of New York, Household Debt and Credit ReportGuide: Collections kpis auto lenders
- Roll rate
The share of accounts or balances in one delinquency bucket that move into the next bucket in the following period, instead of curing or staying put. A rising 30-to-60 roll rate is the earliest sign that early-stage contact is failing.
- Cure rate
The share of delinquent accounts that return to current status within a period, whether by paying the arrears or by an arrangement the lender's policy treats as current. It is the counterpart of the roll rate.
- Charge-off
The accounting step in which a lender removes a loan it no longer expects to collect from its performing assets, typically at a fixed number of days past due or at repossession under the lender's policy. A charged-off account can still be collected, sold or placed with an agency.
- Recovery rate
The share of a charged-off balance that is later collected, net of the cost of collecting it. It is the figure a lender compares against the fee or contingency it pays for post-charge-off recovery.
- Net credit loss(net loss, NCL)
Charge-offs in a period less recoveries in the same period, usually expressed as an annualized share of average balances. It is the portfolio-level cost that a collections program exists to reduce.
- Subprime borrower
A borrower whose credit score falls below the threshold a lender or a data provider uses for the prime tier; the Federal Reserve Bank of New York reports auto originations to borrowers with scores below 620 as a separate line. Definitions differ by institution, so the threshold should be stated whenever the term is used.
Source: Federal Reserve Bank of New York, Household Debt and Credit ReportBhph dealerships
- Repossession
The secured lender's recovery of the financed vehicle after default, under the security agreement and the state's commercial and consumer law. In a collections program it is a decision the lender makes, not an action a first-party support team takes or threatens.
- Deficiency balance
The amount still owed after a repossessed vehicle is sold and the proceeds, less allowable costs, are applied to the loan. Whether and how it may be collected is governed by state law and the lender's policy.
Group 2
Contact and cadence
The vocabulary of the daily work: who was reached, what was promised, and how often an account is worked.
- Contact cadence
The scheduled sequence of contact attempts for an account by delinquency stage, specifying channel, timing and the stop rule. A written cadence enforced in the dialer is what makes a collections program auditable.
- Right-party contact(RPC)
A contact attempt that reaches the account holder or an authorized party, as opposed to a voicemail, a wrong number or a third person. The right-party-contact rate is the denominator that makes promise and payment rates meaningful.
- Wrong-party contact
A contact attempt that reaches someone other than the account holder or an authorized party. Communications with third parties about a debt are restricted under the Fair Debt Collection Practices Act and Regulation F, and a first-party program run to those standards limits them the same way.
- Promise to pay(PTP)
A commitment obtained from the account holder to pay a stated amount by a stated date. Each promise is recorded with a follow-up date so the account is worked again if the payment does not arrive.
- Promise-kept rate
The share of promises to pay that are honored by the promised date. It is the single best early indicator of whether a cadence is producing real payments rather than polite conversations.
- Attempts per account
The number of contact attempts made on an account in a period, counted per channel. It is tracked against both the cadence and the Regulation F call-frequency presumption, which counts telephone calls per debt in a seven-day window.
- Dialer
The telephony system that places and records collection calls, whether manually, in preview mode or automatically from a campaign list. Frequency caps, time-zone windows and cease flags are enforced in the dialer's rules, not in a collector's memory.
- Skip tracing
Locating an account holder whose contact information no longer works, using the lender's data, references and licensed data sources. A first-party support team flags the account and hands skip work back to the client per its policy rather than performing searches in its own name.
- Time-zone window(8 a.m. to 9 p.m. rule)
The presumption in Regulation F that a communication before 8 a.m. or after 9 p.m. in the consumer's local time is at an inconvenient time. A program that serves several states keeps a time-zone table per account and lets the dialer enforce it.
- Inconvenient time or place
A time or place the consumer has said is inconvenient, or that the rule presumes to be, at which a debt collector may not communicate. The consumer's stated preference is recorded on the account and honored across channels.
Group 3
Compliance and regulation
The federal and state rules that shape how accounts may be worked. Definitions here describe the rules; whether and how they apply to a given program is a question for the client's counsel.
- Fair Debt Collection Practices Act(FDCPA, 15 U.S.C. 1692)
The 1977 federal statute that governs the conduct of debt collectors toward consumers: communications, harassment, false or misleading representations, validation of debts and related remedies. Its definitions decide who is covered, so the definition of debt collector is where any analysis starts.
Source: FTC, Fair Debt Collection Practices Act textGuide: Regulation f for creditors
- Debt collector (FDCPA)
Under 15 U.S.C. 1692a(6), a person whose principal business purpose is collecting debts, or who regularly collects debts owed to another. The definition excludes a creditor's own officers and employees collecting in the creditor's name, with exceptions such as using a name other than the creditor's. Whether a particular program falls inside or outside it is determined with counsel.
Source: FTC, Fair Debt Collection Practices Act textGuide: First party vs third party collections
- Creditor
The person or company to whom a debt is owed, including a lender that originated a loan and a dealer that finances its own sales. A creditor collecting its own debts in its own name is generally outside the FDCPA's definition of debt collector, though state law and federal unfair-practices authority still reach it.
- Regulation F(12 CFR Part 1006)
The Consumer Financial Protection Bureau rule implementing the FDCPA, effective November 30, 2021. It sets the call-frequency presumption, time and place rules, electronic-communication opt-outs, validation information and disclosure standards that first-party programs adopt as an operating floor whatever their legal classification.
Source: CFPB, Regulation F, 12 CFR Part 1006Guide: Regulation f for creditorsCollections
- Seven-in-seven(call-frequency presumption)
Regulation F's presumption that placing more than seven telephone calls about a particular debt within seven consecutive days, or calling within seven days after a telephone conversation about it, violates the FDCPA's prohibition on harassment. The count is per person and per debt.
Source: CFPB, Regulation F, 12 CFR 1006.14Guide: Regulation f for creditors
- Validation information(validation notice)
The information a debt collector must provide at or shortly after the first communication about a debt: the creditor, an itemization of the amount, the consumer's rights and how to dispute. Regulation F specifies the content and a model form.
- Cease communication request
A consumer's written request that a debt collector stop communicating with them, after which communication is limited to specific notices. In an operating program the request is flagged on the account and honored across every channel and every agent.
- Electronic opt-out
The requirement that every email or text message sent to collect a debt include a clear and conspicuous statement of a reasonable and simple way to opt out of that channel. An opt-out received on one channel is recorded and honored program-wide.
- Limited-content message
A voicemail that contains only the content Regulation F specifies — a business name that does not indicate the caller is in the debt collection business, a request that the consumer reply, the name of one or more natural persons the consumer can contact, and a telephone number to reply to, plus a short list of optional items such as a salutation and the time of the call — which the rule does not treat as a communication. Anything beyond those elements makes it a communication with all the rules that follow.
- Unfair, deceptive or abusive acts or practices(UDAAP)
The standard in the Consumer Financial Protection Act, 12 U.S.C. 5531 and 5536, under which the CFPB may act against covered persons, including creditors collecting their own debts, for unfair, deceptive or abusive conduct. It is the main federal reason a first-party program adopts Regulation F standards even where the FDCPA's definitions may not reach it.
Source: CFPB, UDAAP examination proceduresGuide: Regulation f for creditors
- Consumer Financial Protection Bureau(CFPB)
The federal agency that writes and enforces Regulation F, supervises larger participants in consumer debt collection and auto finance, and publishes the complaint data and annual FDCPA reports that collections benchmarks draw on.
- State debt-collection statute(mini-FDCPA)
A state law regulating debt collection that may define debt collector more broadly than the federal statute, add licensing or bonding requirements, or impose its own notice rules. Several states reach creditors collecting their own debts, which is why classification is decided state by state with counsel.
- Texas Debt Collection Act(Texas Finance Code Chapter 392)
Texas's debt-collection statute, whose definition of debt collector includes a person who directly or indirectly engages in debt collection, including creditors collecting their own consumer debts. It prohibits threats, harassment and certain misrepresentations and gives consumers a private right of action.
- Telephone Consumer Protection Act(TCPA, 47 U.S.C. 227)
The federal statute that restricts calls and text messages made with an automatic telephone dialing system or an artificial or prerecorded voice, and requires the called party's consent for many of them. Consent records and dialing-mode rules are part of every outbound program's design.
- Regulation E(12 CFR Part 1005)
The rule implementing the Electronic Fund Transfer Act, which among other things requires written authorization for recurring electronic debits from a consumer's account. It governs how an autopay or ACH arrangement is set up on a servicing or collections call.
Group 4
Operating models and outsourcing
How the work is organized and who performs it, and the terms a proposal or a service-level agreement uses.
- First-party collections
Collection activity conducted in the creditor's own name, inside the creditor's own systems and procedures, whether by employees or by a support team the creditor engages to work as an extension of its operation. TEKS provides first-party collections support operated to Regulation F standards; the legal classification of any engagement is determined with the client's counsel.
- Third-party collections
Collection activity performed by an agency in its own name on accounts a creditor has placed with it, usually later in delinquency or after charge-off and usually paid as a contingency share of what is recovered. Third-party agencies fall within the FDCPA's definition of debt collector and are typically licensed under state law.
- Contingency placement
An arrangement in which accounts are placed with a third-party agency that is paid a percentage of the amounts it collects rather than a fee for its time. The percentage rises with the age and difficulty of the accounts placed.
- Business process outsourcing(BPO)
Engaging an outside provider to perform a defined business function, such as collections support, customer service or verification, to the client's procedures and service levels. It is distinct from placing accounts with an agency, because the function stays inside the client's systems and name.
- Nearshore
Outsourcing to a provider in a nearby country that shares working hours and, often, a language with the client's customers. For U.S. finance operations, Mexico is the common nearshore location: Central-time floors and bilingual teams with same-day coaching and escalation.
Why teksGuide: Nearshore vs offshore customer serviceCoverage
- Offshore
Outsourcing to a provider in a distant time zone, where the lower seat price is traded against overnight escalations, accent and language fit, and heavier management overhead. Often appropriate for high-volume, low-judgment work.
- Dedicated agent
An agent assigned to one client only, trained on that client's systems, scripts and policies and never rotated across accounts. The alternative is a shared pool, in which agents handle several clients' work in the same shift.
- Service level(SLA)
A measurable standard the provider commits to, such as the share of calls answered within a set number of seconds, the response time to a lead, or the turnaround on a verification. Service levels belong in the contract and in the weekly report, defined the same way in both.
- First-contact resolution(FCR)
The share of customer contacts resolved without a transfer, a callback or a repeat contact about the same issue. It is the primary quality measure for a servicing or customer-care desk.
- Quality-assurance scorecard(QA scorecard)
A fixed set of scored criteria applied to a sample of recorded calls and messages each week: script adherence, accuracy, compliance rules, tone and note quality. Calibration sessions keep supervisors scoring the same call the same way.
- Onboarding(ramp)
The period after contract signature in which system access is provisioned, procedures and scripts are written and approved, and agents are trained and certified. After onboarding and training, TEKS typically targets approximately two weeks to production go-live, depending on scope, systems access and customer readiness.
Group 5
Insurance and verification
The terms of the work that protects collateral and confirms an application before funding.
- Insurance verification
Confirming that a financed vehicle carries the coverage the loan requires, that the policy is in force, and that the lender or dealer is listed as lienholder or loss payee, at funding and through each renewal. The verification is documented in the servicing or dealer system with the carrier, policy number and dates.
Insurance verificationGuide: What is insurance verification outsourcing
- Lapse
A period during which a required insurance policy is not in force, usually because a premium went unpaid or the policy was cancelled. Lapse tracking identifies the accounts affected and drives the outreach to reinstate coverage.
- Lienholder(loss payee)
The lender or dealer-lender whose security interest in the vehicle is recorded on the title and listed on the insurance policy, so that the carrier notifies it of changes and pays it in a total loss. Verifying the listing is part of every insurance check.
- Lender-placed insurance(collateral protection insurance, CPI, force-placed insurance)
Coverage a lender buys on a financed vehicle when the borrower's required insurance has lapsed, with the premium charged to the loan under the contract and applicable law. A verification team identifies the lapse and notifies the lender; whether and when to place coverage is the lender's decision under its own policy.
- Uninsured motorist
A driver operating a vehicle without the liability coverage the state requires. The Insurance Research Council estimates the share of uninsured motorists nationally and by state, which is the context for why lenders track coverage on financed vehicles.
Source: Insurance Research Council, Uninsured and Underinsured Motorists: 2017 to 2023Insurance verification
- Stipulation(stip)
A condition a lender attaches to a credit approval that must be satisfied before funding, such as proof of income, proof of residence, a reference check or a signed form. Clearing stips quickly and accurately is what a verification team is measured on.
- Proof of income(POI)
Documentation that supports the income stated on a credit application, such as pay stubs, bank statements or tax records, reviewed against the lender's stipulation matrix. Verification checks the document's consistency and, where required, confirms employment by phone.
- Employment verification
Confirming an applicant's stated employer, position and tenure through a call to the employer or an approved data service, documented with the name and time of the contact. It supports the underwriter's decision and never replaces it.
- Funding package(deal jacket)
The complete set of documents a lender requires before it funds a contract, including the application, contract, stipulations, title paperwork and insurance verification. An incomplete package delays funding, which is the cost a verification service level is written to avoid.
Group 6
Dealership and auto finance
The structures and systems of the businesses TEKS supports.
- Buy-here-pay-here(BHPH)
A used-vehicle dealership that finances its own sales and collects the payments itself, typically for customers who do not qualify for conventional financing. Because the dealer is the lender, collections is part of the business model rather than a back-office function.
Bhph dealershipsGuide: Bhph collections in house vs outsourced
- Indirect lending
Auto financing in which the dealer arranges the loan and assigns the retail installment contract to a finance company or bank, which then services and collects it. Most non-BHPH auto lending is indirect, so the borrower's relationship is with a lender they never visited.
- Retail installment contract(RIC)
The contract by which a buyer finances a vehicle purchase through the seller in periodic payments, with the vehicle as collateral. It is the instrument a BHPH dealer holds and an indirect lender buys.
- Dealer management system(DMS)
The dealership's core software for inventory, sales, financing, service and accounting, and for a BHPH dealer, the system of record for its portfolio and collections notes. A first-party support team works inside the client's DMS rather than in a separate system.
- Loan servicing platform
The system a lender uses to bill, post payments, track delinquency and record every contact on a loan from funding to payoff. Collections and servicing teams work inside it so that notes, arrangements and outcomes stay where the lender's managers already look.
- Business development center(BDC)
The dealership desk that answers sales and service calls, responds to internet leads, sets and confirms appointments and runs follow-up, inside the store's customer relationship management system. It is measured on response time and on appointments set, shown and sold.
- Payoff quote
The amount required to pay a loan in full as of a stated date, including accrued interest and any fees the contract allows, with a good-through date after which the figure changes. It is generated from the servicing platform, never calculated by hand on a call.
- Title release
The lender's release of its lien on the vehicle title after payoff, delivered to the borrower or the state under state titling rules and timelines. Questions about it are among the most common calls to a borrower servicing desk.
- Captive finance company
A finance company owned by a vehicle manufacturer or a large dealer group that finances that brand's or group's sales. Captives, banks, credit unions and independent finance companies are the main indirect lenders in U.S. auto finance.
How to use this glossary
Link to a term, not to the page.
Every term has its own anchor, so a policy document, a training deck or an RFP can point at one definition. When a definition cites a rule, read the rule: the glossary states what the section says as of the date it was checked, and rules change.
Classification
First-party, under your name.
Whether a specific engagement is classified as first-party servicing or third-party collection under the FDCPA depends on its structure and is determined with your counsel. TEKS runs every program to Regulation F standards regardless of classification.
Definitions of legal terms here describe the rules as written; whether a particular program falls inside or outside a definition is determined with the client's counsel.
The operating standards each program is held to are listed on the collections support page.
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