Customer-centric collections are the new race for ARMs


With the new rules of Regulation F on consumer preference, the CFPB gave even more consumers to determine how creditors and agencies can communicate with them. But this trend towards customer-centric collections is not new. Many of us in accounts receivable have seen this coming for at least a decade. It started with the Internet and was greatly accelerated by the smartphone. Now we wonder where does it all end?

The good news is that there is an end in sight. The bad news? A lot of you are not going to like it.

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Best practices for collection strategy and consumer communication will not be determined by what creditors want collection agencies to do, or even what agencies want to do. It will be driven by consumers. Tech companies obsessed with design and communications have drastically changed what consumers think of as reasonable standards and means of communication. And we, as consumers, truly customers, have used technology to change the way we do everything. Why would we think it would be any different with debt collection?

The CFPB puts the customer in charge

The future of the debt collection strategy is customer focused collection.

As if the writing on the wall wasn’t clear enough, the Consumer Financial Protection Bureau codified this change when it released article 1006.14 of regulation F. Article 1006.14 is mentioned 594 times in the new rule. Although most have focused on Article 14 (b) (2) Telephone call frequencies; presumptions of conformity and violation, also known as the 7/7/7 rule, article 14 (h) Communication media prohibited This is what puts the power squarely in the hands of customers when it comes to how debt will be collected in the future.

In the course of the collection of any debt, a debt collector should not communicate or attempt to communicate with any person through any means of communication if the person has requested that the debt collector not use that method. way to communicate with the person.

What does it mean? This means that whether we like it or not, creditors and agencies must adopt a client-centric collection practice. The customer now has the right to tell you how they want you to communicate with them, whether by phone, email, text, letter or any other channel. And they can even tell you when they want to be contacted by telling you precisely when do not to contact them. See paragraph 1006.6 (b) (i).

The customer wants convenience and you should offer it

What do we have to do? In addition to bringing our systems and operations into line with the new rule, we need to change the way we think about debt collection from CUSTOMERS. We have to figure out how to provide so many communication channels, or the ones that customers really want, like e-mail and SMS, so that we can contact them and they can contact us in any way they see fit. We need to review our hours of operation so that we can respond when customers want to communicate with us (which can be done with a live person or, in some cases, a digital solution). We need to give customers clear information and options, the ability to schedule time with us, smooth online solutions, in particular payment portals, and their channel of choice.

A Client-Centric Collection Strategy Can Benefit You and the Industry

The benefits for the customer are clear: controlling how and when we communicate with them. They can demand – and get – the communication they want when they want it. Are there any benefits for us too? There are and they are considerable.

Businesses that can meet this new standard for customer-determined, customer-centric communications will get fewer customer complaints and lawsuits. This will result in reduced internal work, reduced regulatory oversight, and lower litigation costs. We will see significantly higher ratios of accounts per agent as self-service customers versus the need to speak with one person. This means higher gross margins.

Finally, we have the chance to change the way debt collection is done and reduce the shame of being in debt. This means that for the first time in our history, we may even be able to change the perception of debt collection itself.

The race has already started, and companies that can meet the needs of their customers, dare I say delight their customers by helping them solve their accounts, will be the ones that succeed in the decades to come.

Tim Collins, director of clientele at InDebted, Le’nore Caldwell, chief audit executive at Spring Oaks Capital, and Carrie Coker-Aivaliotis, director of market planning at LexisNexis will discuss the future of consumer preferences at iA Strategy & Tech, a digital briefing and networking event for executives of creditors and collection strategy agencies – July 13-15. Learn more.

For several quick and easy ways to optimize consumer preference practices, try “5 Ways To Improve Your Consumer Communication Preference Strategy.”

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the IA Innovation Council is a collaborative working group of thought leaders on products, technologies, strategy and operations at the cutting edge of analytics, communications, payments and compliance technologies. Group members meet in person (and lately, virtually) several times a year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish safeguards for new technologies, and educators, entrepreneurs and innovators outside of the industry who inspire different thinking.

2021 members include:

AllianceOne Receivables Management

Alorica

Arvest Bank

in harmony

BBVA

Beyond investments

Management of capital collection

Cedars Financial

Citizens Bank

America Collection Office

Management of Crown Assets

CSS impact

Dial-up connection

CER

Exeter Finances

Firstsource advantage

Health Income Recovery Group

Hunter’s war field

Imagined.Cloud

InDebted.co

Katabat

Livevox

MRS BPO

NCB management services

Neustar

Numeracle

Ontario Systems

Phillips and Cohen

PRA Group

Professional financial company

Global radius solutions

Reborn

Income group

RevSpring

Capital of Spring Oaks

State collection service

TCN

The CMI Group

Tratta

TrueAccord

Unifund CCR

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