Companies and experts talk about the problem. Compliance has dominated recent collection conferences and marketing materials. But what are we really doing about the problem?

Unfortunately, few are objectively addressing the challenge. Everyone seems to look at it from their own, subjective angle. For example, dialer companies say that they have the solutions to call frequency management. That means your dialer has to keep track of multiple accounts for each consumer, the different phone numbers on each account and call histories. How practical is that?

Letter vendors are offering to address specific compliance issues. Skip tracing companies are asking you to use them for cell-phone identification by sending them your phone numbers. How does that help you when have a consumer on the phone and they give you their cell number when you ask for their home phone number?

For a start, we need to design a top down solution. Let us think about the components of a comprehensive compliance structure:

  • Your collection technology must manage your accounts and workflows. Weaknesses must be addressed by your software vendor or, in the case of in-house systems, your IT department

  • Since prior consent is important in some circumstances (especially cell phones), you must be able to identify cell phones at the time they are obtained and ask for permission. This requires real-time cell identification and ported number updates

  • The role of the dialer is to make phone calls. It is not to manage accounts, decide on what number to call or when to make each attempt. Even time zone calculations should be handled by your collection platform because while a dialer can easily calculate allowed calling period based on a couple of phone numbers, what about the address being in a different state or accounts that have 6 potential numbers in different areas?

  • Call frequency based on client requirements, state and city rules must be managed by your collection software. Your collection system is your system of record and you can not expect a dialer to maintain a separate database of account information, phone numbers and call history

  • Your dialer must be tightly integrated with your collection system so that collection activity is driven from a single source. For example, a consumer who calls in and disputes an account at 10.15 AM should not receive a call from your dialer at 10.20 AM. Suppose you are allowed 4 calls to a consumer a day, and have made 3 by early afternoon. Two different agents call up the same account in different offices at the same time, and attempt calls to home and work at exactly the same time. The integration of the collection platform and dialer must be able to stop one of those calls.

  • Technology can not stop an irresponsible agent from threatening to have a consumer imprisoned or killed. Yet, this would fall under some area of serious violations. Speech and text analysis are modern technologies that can help to identify this type of failure.

  • There is not much you can do if your client gives you the wrong balance at the time of placement. Assuming you have taken the necessary steps to make sure the information was updated as received, there is not much that people or technology can do to solve this data problem. You need to be able to handle the dispute or compliant that is likely in such a case. These processes need to be computerized and automated.

  • Internal processes must be integrated within your collection platform. Manual work must be eliminated, assuming that you have zero tolerance for errors. For example, if a consumer disputes an account, the letter that was to go out two days later must be automatically stopped by the system. If you do not have a license to work in Louisiana, your system should automatically close or forward accounts you receive with a Louisiana address. What if the account had a Maryland address and when you made the right party contact the consumer said they had moved to Louisiana? Rather than relying on the agent’s knowledge, the system should close that account too.

  • Rules relating to mail must be enforced by your collection platform. Why? The best information is on your collection system and it is logical and practical to perform the checks at the collection system level. For example a letter is requested at 10 AM. A payment is posted at noon and the account gets paid in full. The letter must be stopped that night. You request a final demand on two consumers. One speaks English while the other only speaks Spanish. Ideally the agent should request the same letter for both consumers and the collection system should generate a Spanish letter for the latter. Anything else is subject to error!

  • Letter frequency must be managed by technology as opposed to your agents

  • You must have the ability to ensure that new accounts are not included in the combined balance on a demand letter when there are multiple accounts for a consumer

  • If you make phone calls before sending a validation notice (which you are allowed to do), your system must (based on the rules) make sure that the validation notice is sent out if there is a contact, a message is left etc.

  • With complex security requirements, be prepared to restrict access to information based on individual roles. Some states require that agents are licensed to work accounts in their state. Access must be restricted or allowed based on this. Your system must only allow specific agents to look at accounts for a given client. An example of practical data access features would be not displaying the client name, patient name or medical information to a person whose job was returned mail entry.

  • Out of statute accounts must be systemically addressed on the day they are not eligible to be worked

  • Paper must be eliminated and replaced by computerized processes. Paper is error prone and is clearly a security risk

Is there more? Yes, there are many other areas that come under the umbrella of compliance. Should you use “local touch”? Can you used predictive dialing if you have permission to call a cell phone? Will routing all cell phone calls through your PBX keep you out of trouble with regard to calling cell phones using an “auto-dialer”? What is a complaint voicemail message? These are not technology problems – Hire a great collection attorney who will hopefully give you the correct advice.

The above items have been presented in non-technical terms and should be logical and acceptable to most readers. Why have technology companies not focused on building systems that incorporate all these requirements and boundaries? It is an important question. This would probably require a separate article, but we believe that aging software is a key reason for the very large gaps that exist with today’s collection technology.

Collection software and dialer companies have never been under pressure to be proactive technology leaders, building futuristic platforms like Microsoft or Apple were forced to do. For over 20 years, their focus has been on selling new systems and making incremental changes as opposed to taking a good look at their underlying architecture and design.

Collection technology users have also contributed by not demanding innovation and major changes. If Microsoft had persisted with DOS or Windows XP, selling upgrades claiming to be in our best interests, would they still have been around today? Unlike red wine, software does not age very well. Changes in technology and the industry makes it necessary for us to throw away old products and build new ones. In an industry such as collections, major redesign is probably called for every 5 to 6 years. If this does not happen, there is often too much to bridge, and enhancements are not viable in order to keep up. If your target market is not demanding change, where is the incentive to be innovative? If none of your competitors are attempting to move ahead, why would you invest millions to build a new product?

Today, there is one very good reason – the CFPB’s outreach and the potential lawsuits and fines that will be difficult to defend.

Compliance is not about one company’s narrow-minded view of a puzzle. It is about asking ourselves “What is the best way to be productive and profitable, and to do it under compliance?” Compliance, in this case, has to be defined as a broad range of requirements that must be satisfied by technologies and people, working together, to give you the best results at the lowest possible cost. Everything has to be on the table, and we must be willing to acknowledge our mistakes, embrace change, and if necessary, spend our way out of this mess.


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