TrueAccord at the Debt Collection Field Hearing

TrueAccord Blog

The CFPB put the full video from their debt collection field hearing on their YouTube channel. Participants were allowed 2 minutes to respond, and our CEO took that opportunity (watch here).

His comments:

Thank you for the time today. My name is Ohad, I’m CEO of TrueAccord, a company that uses data and machine learning to fundamentally change the consumer experience in debt collection. We’ve been studying the new proposal since yesterday. We believe it is a big step towards improving consumer protection. Weeding out bad actors is going to level the playing field and create a race to the top that will benefit everyone.

When finalizing the rule, we think the CFPB should continue to encourage innovation in this space by providing clear and unambiguous guidelines on how to use new technology in the collections process. As a data-driven startup company, we have empirical evidence showing hat using new technologies in the collection space – text, email, social media, digitizing the dispute process – significantly improves consumer protection.

One, it improves protection measured by consumer feedback and a marked reduction in consumer complaints. Consumers understand and react to our personalized, targeted communication.

Two, it significantly reduces communication frequency; reduces call frequency by up to 95%, well under the limitations proposed in this new proposal, using channels that consumers feel are much less intrusive.

Finally, it does all of the above while meeting or exceeding traditional performance in liquidation. Nobody is going to go out of business by using new technology (and we’ll add here: versus continuing to insist on hardly-compliant calling tactics).

Again, the CFPB should considering supporting innovation by providing clear guidance for the use of technology. It will improve consumer protection and will help he industry as a whole. We look forward to cooperating with the CFPB and policymakers on this shared goal.

Industry experts talk progress, offer same old solutions

TrueAccord Blog

We’re all about innovation at TrueAccord, and so were pleased to find this article from AccountsRecovery.net titled “Industry Experts Share Tips On How Agencies Should Modernize“. We were a bit surprised to find old ideas reiterated, with a focus on problems and compliance challenges rather than solutions.

This study was sponsored by Castel, a provider of solutions to call centers; furthermore, the experts interviewed have built successful businesses using call center technology. Therefore the focus on call solutions makes sense. We also understand that the TCPA is vague, that consent is an issue and that consumer attorneys are putting compliance teams on edge. As a licensed agency, we’re in the same boat. However times are changing, and it’s high time that we embrace the change.

What technology solutions is the discussion raising? Mostly solutions to manually dial phone numbers, maybe a way to place a voice mail without a ring. The discussion offers little other options other than the iterated duo: those who don’t believe in technology, and those who deem it too risky.

The school of “technology won’t work”

The collection industry has been around for decades, and many of the businesses that comprise it were started long ago by “old school” collectors. That’s why the following quote didn’t surprise us.

“We’ve looked at technology like online chat interface,” said Christian Lehr with Healthcare Collections in Phoenix. “But we haven’t moved forward because it’s a business decision, not a compliance decision. I’m not sure it is the best way to serve the consumer. Much like with emails or text messages, it can be hard to understand context. And there is a time lag for communication. We may be able to serve the consumer faster on a phone call.”

As a company that uses machine learning to develop hybrid collection systems that collect better than call centers, we understand the sentiment but beg to differ. We also have the data to back this disagreement. Not only are email, text and website more effective for collections (from 30% better to 5 times better for low balance debts), consumers prefer them. More than 50% of TrueAccord’s traffic is from mobile devices; more than 35% of payments are made on a mobile device; 25% of interactions with our system happen in non-FDCPA hours. If this isn’t a “better way to service customers”, what is?

The school of “we need permission”

Collectors have been trained by regulators and lawyers to be very compliance minded. This makes them pessimistic about any new technology that hasn’t been tested by courts and lawyers. We hear a lot of the following from agency leaders.

“The only way we can move forward and success is to embrace technologies that are available to us,” Strausser said. “We should be looking at contemporary means of communication and exploring how to pull the trigger when and we are granted approval.”

We’d like to challenge this approach from two directions.

First, when thinking about texting and emails, compliance minded collectors are worried agents on the floor are going to abuse these new tools. However email and texts can be pre-written, optimized, and sent at exactly the right moment. They actually present a much stronger compliance framework when handled properly.

Second, collectors won’t adopt new technologies without explicit approval form the CFPB, but hold on to old call center technology even though the FTC clearly signals it’s all but forbidden. Is explicit approval, which the CFPB rarely provides, the thing to stop us – or can we have an honest analysis of the FDCPA to show us what reasonably can and cannot be done? Are we holding on to old and challenged technology due to inertia?

Bottom line: progress

There is much to do in debt collection. Consumer expectations, client requirements and regulatory pressure are mounting. The right thing to do is take a hard look at the old ways of doing business, and realize that the days of hiring to fight turnover and living off thin margins are almost over. Technology can help us service consumers at scale, provide great customer service, and get results that are better than anything we’d forecast based on old paradigms. We are excited to partner with some of the biggest financial institutions in investigating this possible future.

 

The dispute process isn’t working for consumers – this is how we solve it

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TrueAccord has been refining the debt dispute process since our inception in 2013. Offering digital disputes streamlines the conversation between consumers and collectors while also reducing compliance risk. Engagement of consumers in debt-related discussions have decreased complaints quickly leading conversations into debt resolution.

Read the excerpt and download the whitepaper for free.

Consumers who owe debts are often confused, angry and scared – sometimes unaware of the full details of what they owe and to whom. Though the FDCPA was written to protect the average American consumer, aspects of it, including the mini Miranda and debt validation notice are written in formal legalese. As a result, consumers filing a formal debt dispute tend to skip over reading the information or misunderstand the language, leading them to miss remedies immediately available to them. For example, consumers often miss the allotted 30-day dispute window after the initial communication, during which time they can dispute the debt, while asking for additional verification.

CFPB enforcement paints a new world in data requirements: don’t be caught unprepared

CFPB

On September 9th the CFPB released consent orders for Encore Capital Group of San Diego, CA and Portfolio Recovery Associates (PRA) of Norfolk, VA following an investigation uncovering their attempts to collect debt that they knew or should have suspected were invalid. Hitting the US’s two largest debt buyers and collectors with a combined settlement of $72 million in refunds and penalties (as well as the inability to collect on an additional $128 million in debt) for using deceptive tactics, sends a clear message about best practices surrounding debt substantiation in the collections industry.

Continue reading “CFPB enforcement paints a new world in data requirements: don’t be caught unprepared”

The FDCPA dispute process isn’t working – here’s how to fix it

FDCPA_digitaldisputes

TrueAccord has been refining the debt dispute process since our inception in 2013. We’ve found that offering digital disputes streamlines the conversation between consumers and collectors while also reducing compliance risk. By encouraging consumers to stay engaged during the collections process, we’re creating an opportunity to discuss debt-related concerns. As a result, complaints decrease, leading conversations to move quickly into debt resolution.

Read the following excerpt and download the entire whitepaper for free.

The dispute process is as opaque to the collector as it is to the consumer. While respecting the 30-day window and not pressuring consumers to pay while the debt is in dispute, a collector is never quite sure whether a dispute is en route via the postal system. This leaves a long period – days and often weeks –in which the consumer knows that a dispute is “in the mail”– but the collector is still lawfully able to contact them. This creates an ambiguous situation that often leads to consumer complaints.

Debt Collection is Dead, Long Live Debt Collection!

debtcollection

A gloom hangs over the debt collection industry. Between the recent FCC ruling and the decline of postal mail, there’s talk on the internet about the death of the debt collection industry, or at least its most popular tools. Now with the upcoming FTC-sponsored Debt Dialogue, the industry is preparing to get before regulators to discuss how business is being stifled amongst mounting costs and regulations. Sometimes we feel like an outdated robocall (*zing*) when we say that there’s a better way.
Continue reading “Debt Collection is Dead, Long Live Debt Collection!”

Recap of ACA International Convention

boston

Earlier last week, I, along with TrueAccord’s CEO, Ohad Samet and general counsel, Avital Samet, attended the Association of Collections and Credit Professionals International (ACA) convention in Boston. Even though it was my third time attending the ACA convention; it was my first time attending as Head of Business Development for TrueAccord.

If you work in debt collection, attending the ACA conference is worth it. In addition to informative panels and the exhibit hall, there are a ton of networking opportunities. The collections industry is based on relationships and it is only through hallway conversations and drinks at end of day receptions that these relationships can be built.
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The FCC is Saying: Give Consumers Communication Choices

TrueAccord Blog

Choice is inherent in the way we, as 21st century consumers, interact with our world. The choice to eat whatever we want. The choice to take whatever form of transportation we like. The choice to marry whomever we wish. The concept of choice in debt collection isn’t revolutionary; debt collection has always been linked to the consumer experience. Yet, recent crack downs on bad actors in the debt collection space by the CFPB, as well as the July 10th ruling from the FCC feels like an affirmation of how TrueAccord approaches debt collection.
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CFPB Gets Tough on Debt Sales with a JPMorgan Chase Settlement

CFPB

It’s taking a herculean effort to not title this, “We told you so.” Just a few months after our CEO, Ohad’s, Op-Ed about debt buying practices got strong responses from the industry, JPMorgan Chase & Co. is currently in trouble with the Consumer Financial Protection Bureau to the tune of at least $136 million. The reason? Problematic data management and debt sales practices.

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Debt collectors need the CFPB’s kick in the pants

CFPB

“Debt sales are broken. Brokers, buyers and sellers offer books of debt that may be double- or triple-sold, lack documentation, or even be illegally originated.

Some tertiary and junk debt buyers, also known as shifty “paper boys,” are guilty of these violations. But leading financial institutions are also implicated in the Consumer Financial Protection Bureau’s recent reports on debt sales and collection.”

This is how our opinion piece on American Banker starts. Interested? Read more here.