Fintech Insights

Collections and customer connect in the time of COVID: An evolving regulatory landscape - Part 2

Jaspreet Kondal | SVP, FIS and Gemel Clark, President, Complete Payment Recovery Services Inc. (CPRS, FIS Collection Group)

December 28, 2020


Over a 5-year period, we have seen a 20% drop in the number of collections agencies in the US. This is due to several factors: an inability or low capacity to use tech and innovation to comply, no internal audit system in place, or lack of depth and breadth. The need of the hour is to be able to respond quickly, by helping clients remain compliant while also tending to their collections.

Right contacts mean better collections

Making the right party connects is essential, because contacts mean collections. Thus far the lines have been blurred around email and text communications. We are seeing some excitement in the industry around the ability to contact and communicate with consumers as a result of the proposed changes – with 32% of debt collectors having said it is more difficult than 5 years ago to contact consumers.

Adding to the obstacles are the protocols (shaken/stir and RoboCall Legislation) to reduce the spoof, spam and scam calls that we all receive. While this is a good thing, for all of us as consumers and collectors, it does make it difficult for a collections agency to do their job. We are after all contacting the person against a need, we aren’t spam or a scam, even though we are obviously an unwelcome call for the consumer. We need to have our calls get through and be able to reach the right person, so consumers get the assistance they need to resolve their debt issues.

Let us look at the 3 primary goals of the proposed rule changes and how we think they can be handled to successfully manage collections:

  • Clear, bright-line rule to limit calls
    CFPB says that there can be no more than 7 attempts in a 7-day period by a collections agency to contact a consumer. CPRS has in place systematic controls across our channels (2 step - proprietary system, cutting edge dialer) to ensure we adhere to the limit. All contact information will be tied to a unique account
  • Clarifies consumer protection requirements
    CPRS uses a robust multi-layered system for revising disclosures that involves getting approval from RISC, Legal, Outside Counsel
  • Addresses how agency can lawfully communicate with debtors through email, v/m, text
    CPRS provides a robust set of opt in/opt out messages across communication channels so consumers can choose exactly when and how they agree to be contacted

We have had to rethink contact based on these proposed changes. We are optimizing tools, building partnerships to increase the probability of right party contact, and building an identification mechanism for consumers we contact. Consumers have a lot of ways to be reached. To ensure right party contact, we are creating a unique identifier. We are making use of information like address history and bankruptcy filing and leveraging our industry relationships in the telecom world, so we are identified as a legitimate enterprise, and not blocked and labeled spam or fraud.

What a collections expert can help with

Collections can be done as a 1st party or 3rd party, based on the specific needs of a company. 1st party collections are customer focused – making use of a company’s policies, procedures, program, oversight compliance management, and brand to deliver a quality recovery service for its consumers. The focus is on maintaining relationships and curing outstanding debt on behalf of the company, which can augment current staff and continue to collect internally, or completely outsource to a collections expert like CPRS.

With a 3rd party debt collector, licensed in US locations as required, charged off, transactional or iterative debt can be collected. From managing compliance policies and procedures, to receiving payments directly, a third-party vendor will work to collect on the company’s behalf. Companies can also harness predictive analysis to improve collections.

Using a debt collections expert can help companies scale debt recovery operations, create optimum contact profiles, comply with 3rd party debt collection regulation, identify and adapt in an industry changing and facing an uncertain future.