“Death of the call center”—you may have heard this phrase before, but today’s labor shortage, wage inflation, regulatory risks, and changing consumer behavior are all nails in the coffin of this once sure-fire business tactic.

But don’t say a final farewell to the call center just yet. There is a way to utilize those phones to more effectively reach your business goals—especially when it comes to recovery and collection operations.

Let’s take a look at how call centers operate today, what factors threaten their effectiveness, and what we can do to make them viable again. You can take an even deeper dive and read our full coverage of “Outbound Calling Doesn’t Work, Here’s What Does” here»

Outbound Calling vs. Inbound Servicing

To understand how collections call centers can survive and remain profitable in recovering delinquent funds, we need to understand the difference between two basic functions of a call center: outbound calling vs. inbound servicing.

Outbound Calling: Call center agents dial out directly to customers

Inbound Servicing: Call center agents answer incoming calls made by customers

A 2020 survey showed the effectiveness (or ineffectiveness) of outbound phone calls to collect debts due for more than 30 days.

When we break it down, we can start to see that the outbound model to collect on delinquent accounts is truly on life support this time around.

So What are the Killers of Outbound Call Centers in 2022?

When the “Death of the Call Center” was first foretold back in the early 2000s, the culprit was firmly identified as the internet and technology taking over the call center career opportunities for people.

But a closer look shows this isn’t the case given today’s massive shifts in the labor market, regulations, and consumer behavior.

Labor Shortage & Wage Inflation
New technologies aren’t pushing people out of working in call centers—people just don’t want outbound calling jobs like they used to. Competition to hire is fierce and compounded by the Great Resignation sweeping through the market. Unfortunately, many outbound call centers already faced notoriously high (and costly) attrition rates as well.

On top of that, call center wages have increased by 15%+ since the pandemic began, an astounding spike even when every industry is riding the wave of wage inflation.

Regulations & Consumer Expectations
Outbound dialing platforms must comply with a long list of regulations—especially in the debt recovery and collection sector, like the TCPA, FDCPA, and Reg F—all before they can even start talking about recovering delinquent accounts…that is, if anyone even answers their call.

Consumer preferences have moved away from talking on the phone and moved towards self-service options online. Do a quick google search on how to stop debt collection calls and an endless amount of articles will pop up. But overall, consumers have found an even simpler solution: don’t answer the phone.

So can you actually connect with your customers through a call center?

A Second Chance for Call Centers

In the wake of changing labor markets, regulations, and consumer behavior, businesses must evolve to integrate digital-first solutions into call center operations to save manpower, regulatory compliance efforts, and customer satisfaction. We may be perpetuating the old trope, but 2022 really could spell the end for outbound call centers as we know them, and be the opportunity to transform them into inbound engagement centers.

Find out how in our full coverage of “Outbound Calling Doesn’t Work, Here’s What Does” here»

None of us should be sad to see it go. Not consumers, not employees, not businesses. It’s time to say R.I.P. to outbound calling for the betterment of all.

The freeze on student loan payments has been a hot topic since the start of the pandemic—not just for borrowers, but for debt collection departments outside of the student loan debt sector. Although student loan borrowers get a reprieve for another few months, repaying other debts can still be a tricky issue for consumers to budget for today. Debt collectors need to find ways to start engaging with borrowers now before student loans get added back on to the balance.

The Freeze Continues Through the Summer

On April 6, 2022, only weeks before collections were set to resume in May 2022, the Biden administration announced another four-month extension on the freeze for federal student loan payments, interest, and collections. After granting several extensions due to the ongoing Covid-19 pandemic, the decision to further extend the pause reflects the challenging economic landscape and unmanageable financial burden faced by many Americans.

While this is another round of relief for the approximate 42.9 million Americans with student loan debt, the proverbial can is just getting kicked farther down the road as the relief is only temporary. Additionally, uncertainty leading up to the announcement left many in what has become a familiar anxious limbo of whether or not they would be expected to restart their payments; and that uncertainty can have a broader impact for debt collections beyond student loans.

Don’t Forget the Debts that Don’t Have an Indefinite Moratorium

Student loan debt collection may be dominating the headlines, but it is often not the only financial burden borrowers are carrying. Out of the number of adults with student loans, about 23 million (69%) have at least one additional type of debt, according to the U.S. Census Bureau. Looking at it even closer, surveys found that among those with student loans, consumers also had:

• Credit card debt (52%)
• Vehicle loans (33%)
• Medical debt (18%)

The newscycle focus and the ongoing uncertainty of student loan repayments can be confusing to borrowers with multiple debts who are prioritizing based on their cash flow, putting them at an increased risk for delinquency. As noted in our Q1 Industry Insights, February marked the 9th month in a row with increasing 30+ delinquency rates on a unit basis across debt types, notably delinquency increases in first mortgages, second mortgage, auto leases and unsecured personal loans.

And with student loans once again receiving temporary relief, these consumers will likely focus on repaying their other debts. The key for collectors is to understand how to engage with consumers that have limited budgets through a variety of affordable repayment options.

Engaging Consumers Digitally with Repayment Options

The first step is to actually connect with consumers to stay top of mind. While phone calls can go unanswered and canned emails go ignored, reaching customers through customized, digital-first communications can help businesses recover more by reaching those that are ready to repay debts. Consumers already use these types of platforms to interact—surveys found that 46% of people exclusively use digital channels for their financial needs, including banking and bill paying.

The second step is to offer consumers repayment options and flexibility knowing they may be balancing multiple bills. With so many financial options at their disposal, consumers have to monitor an increasing number of accounts for banking, credit cards, autopay, recurring payments, installment plans and more. The ability to choose a payment date that aligns with paydays or to push back a payment when something unexpected comes up are invaluable for consumers and will actually lead to brand affinity and better customer experiences.

With so much uncertainty already swirling around student loans, businesses have a better chance of successfully reaching and recovering other debt payments if they do so in a way that is familiar to the borrower and provides flexible ways to manage repayment. TrueAccord helps reach consumers where they are when they need to be engaged with through a digital-first approach that cuts through the clutter of other communication channels.

Discover how to expand and customize your communication channels for each individual consumer and engage faster with better results. Schedule a consultation today»

As hospitals face growing and aging accounts receivable systems, and with limited data and visibility into their organizations’ financial health, the most common revenue challenges in today’s healthcare landscape all relate to not getting paid on time, every time. With patient financial responsibility increasing since the enactment of the Affordable Care Act, the challenge for hospitals and healthcare providers to collect payments consistently will become even more difficult to manage as more of the financial burden falls on patients. 

To quantify this increase in patient financial responsibility, TransUnion Healthcare’s 2019 study found a 12 percent increase in out-of-pocket costs for inpatient, outpatient, and emergency department care from 2017-2018. At the same time, Instamed reports that 78% of healthcare providers cannot collect on a bill of over $1000 in 30 days.

The issue of patient financial responsibility is complex, but one aspect is the patient financial experience. Patients who have a better experience are more likely to pay, but healthcare organizations are lagging far behind the financial experience that patients want. Patients often grapple with sticker shock due to the costs of healthcare  confusing medical bills from their healthcare providers in addition to insurance coverage notices and challenges. Many healthcare consumers are frustrated with their provider’s billing and collections process especially those that are not yet digital. Patients could benefit from better clarity and communications from their healthcare providers as well as easier and faster payments.

Patients who have a good financial experience with a healthcare organization are more likely to remain customers, which leads to future revenue. 41 percent of patients would consider switching to a new healthcare provider that offered a better digital billing and collections experience. In an increasingly transparent marketplace where there are many options for healthcare, ensuring that patients have a good clinical and financial experience is integral to retaining them.

TrueAccord helps health care providers alleviate these payment issues.  By delivering clear communication about amounts owed, an empathetic approach, and digital self-service, TrueAccord can offer a better financial experience for patients. Powered by AI, our system reaches out to the consumer with the right information at the right time so that they are empowered to take the steps necessary to fulfill their patient financial responsibility. We seek to understand the patient and meet him or her where they are with empathetic communications that take into consideration both the message and how and when it’s delivered. Rather than fostering frustration about their financial responsibilities, TrueAccord eases patients into the process. We also provide a self-service portal where patients can customize their payment plans and find other options for easily settling their bill. 

Since we were founded in 2013, TrueAccord has worked with more than 13 million consumers. Hundreds of thousands have resolved their debts with convenient payment plans, customized billing schedules, and easy documentation. Learn more about how TrueAccord can help your healthcare organization today.

Ohad Samet, CEO and cofounder of TrueAccord Group, has been named to the inaugural debt collection advisory committee of the California Department of Financial Protection and Innovation (DFPI). The debt collection advisory committee is a new seven-member board that will provide critical feedback to the DFPI as it stands up its debt collection licensing program.

“I look forward to working with the DFPI, a new and influential regulator, to think through consumer protection and choice in tough times,” said Samet. “Consumer protection will be especially important this year, as we emerge from the pandemic and direct economic aid to consumers decreases. The debt collection advisory committee will be working to make sure that all consumers facing debt collection in California are treated fairly and equitably.”

“Since its founding, TrueAccord has been committed to sharing consumer feedback and data about the use of technology in debt collection,” added Samet. “At TrueAccord, we’ve been able to demonstrate that consumers across the country like email and text, actively choose to use digital channels, and feel empowered by these tools while enjoying improved protection. Similar to other facets of consumer protection like privacy regulation, I expect that the rules coming out of the DFPI may end up impacting consumers nationwide.”

The debt collection advisory committee members represent a cross-section of industry experts, including five industry representatives, one consumer advocate, and one law and economics professor who studies the industry. Notably, three of the industry members, including TrueAccord, are RMAI certified businesses, demonstrating a preference for businesses with independently-audited, documented best practices.

“I look forward to working with this group representing diverse stakeholders in the debt collection industry,” said DFPI Commissioner Manuel P. Alvarez. “The committee’s perspectives and advice will be critical in helping the Department effectively oversee debt collectors and protect consumers.”

The committee members were appointed for two-year terms pursuant to Financial Code Section 100025 adopted by passage the Debt Collection Licensing Act (DCLA). The committee has scheduled its first meeting for July 28, 2021 and is expected to meet twice per year or as needed. For more details, refer to the DFPI’s official announcement.

About TrueAccord
Founded in 2013, TrueAccord’s data-driven debt collection platform is disrupting the collection industry by helping businesses collect more debt online than traditional methods. TrueAccord’s platform is powered by machine learning with a decision engine that analyzes consumer behavior and delivers personalized and empathetic consumer experiences. By communicating at the right time in the right channel with payment options that meet consumer needs, TrueAccord provides exceptional recovery rates for top 10 financial institutions, debt buyers, lenders, and technology companies. TrueAccord empowers many of the estimated 77 million consumers who are in debt every year to get on a path to better financial health. To learn more, go to http://www.trueaccord.com.

TrueAccord Group has announced Courtney Graham, former Chief People Officer of Four Winds Interactive, as its new Chief People Officer. 

“Our family of companies is growing rapidly, and we are thrilled to have Courtney on board as our first Chief People Officer. Courtney’s experience as a People leader within high-growth technology companies will be instrumental in helping TrueAccord scale while maintaining a strong people-first culture,” said Ohad Samet, CEO and co-founder of TrueAccord Group.  “We are on a mission to empower consumers to get to financial fitness, and that mission begins with our team. Courtney is a compassionate, engagement-focused leader who will undoubtedly bolster our culture of empowerment, empathy, and inclusivity.” 

“We all know that a great company is not just about the product or service. A great company is when innovative offerings and incredibly talented, productive people collide. In my experience, that’s often when the ‘magic’ happens,” said Courtney Graham. “I am delighted to be part of the TrueAccord team and am excited to build an inclusive work community that we all want to be part of.”

Courtney Graham joins a world-class leadership team that includes Ohad Samet, Sheila Monroe (COO and CEO of TrueAccord Corp), Gene Linetsky (CTO), Noah Barr (CFO), Laura Marino (CPO), Charles Deutsch (GM of Financial Services), and Nadav Samet as CIO and CEO of True Life Solutions, which launched the game-changing consumer product, Engage.

In 2020, TrueAccord Group added 146 new hires and is continuing to expand in 2021, with hundreds of open positions across engineering, product, sales, client services, and operations. See all open positions and apply here: https://www.trueaccord.com/about-us/careers/  

About TrueAccord
Founded in 2013, TrueAccord’s data-driven debt collection platform is disrupting the collections industry by helping businesses collect more debt online than traditional methods. TrueAccord’s platform is powered by machine learning with a decision engine that analyzes consumer behavior and delivers personalized and empathetic consumer experiences. By communicating at the right time in the right channel with payment options that meet consumer needs, TrueAccord provides exceptional recovery rates for top 10 financial institutions, debt buyers, lenders, and technology companies. TrueAccord empowers many of the estimated 77 million consumers who are in debt every year to get on a path to better financial health. To learn more, go to https://www.trueaccord.com.

Watch the full recording here, or read on to learn more about this webinar.

Poor customer experience. Compliance challenges. Reputational risk. These are some of the factors that have prevented lending organizations – from areas as diverse as Fintech, utilities, service organizations, property management, telecommunications, and more – from investing in debt collections.

But ongoing financial uncertainty has led many of these organizations to seek innovative approaches to improve consumer financial health and solvency. And in contrast to traditional collections methodologies, digital debt collection offers the promise of a superior consumer experience that drives engagement, results, and ultimately brand loyalty.

How should companies new to digital collections get started? On January 28, TrueAccord hosted a webinar to tackle this timely question. Our featured guest was Jan Hansson (Vice President Debt Collection, Klarna), a veteran of the debt collections space. Jan has decades of operating experience in collections, including leadership roles within Klarna for the past 12 years.

In this webinar, Jan spoke with Ohad Samet (Co-founder and CEO, TrueAccord) about Klarna’s journey into digital debt collection. They discussed the transformational impact that digital collections have delivered for Klarna, particularly around consumer experience and loyalty — and share advice for other organizations looking to embark on a similar journey.

Watch the full webinar here.

The following is an excerpt from our recent ebook, Ten Critical Questions:
The Buyer’s Guide to Digital Debt Collection Solutions. To download the full ebook, click here.

Consumer behavior and expectations have undergone significant changes over the past few years – trends that COVID has only accelerated. For lending organizations, the end result of these changes is that digital collections have shifted from a “nice to have” into a must-have.

Here are the four consumer trends that are disrupting the traditional collections model and making digital-first collections a necessity:

Consumers are digital-first.

The decline of the landline has made it harder to reliably reach consumers at home. And advances in mobile technology (e.g., call blocking) have made it easier for consumers to screen calls. As a result, right-party contact rates are low and continuing to decline. In fact, 78% of collection agents see their calls blocked, and 74% of collection agents see their calls marked as “Spam or Fraud.” (Source: ACA)

What this means for lending organizations
Organizations must embrace a multi-channel digital approach that meets customers where they are, empowering them to respond at their own convenience.

Consumers won’t accept one-size-fits-all treatment.

The explosion of personalization in marketing (from product recommendations to programmatic advertising) means that consumers expect to be communicated with as individuals, in a way that is relevant and tailored to them.

What it means for lending organizations
Organizations must seek out a digital collections approach that tailors messages and outreach to individual consumers.

Consumers expect a seamless, self-serve experience.

From Amazon to Instacart, consumers have become accustomed to being able to do everything digitally – without interacting with a human being.

What it means for lending organizations
It’s not enough to communicate with customers over digital channels. A digital collections solution must offer a robust and intuitive self-service interface that enables customers to engage in their own time.

There are now major logistical challenges in scaling the contact center model.

With COVID limiting in-person interactions, it’s more challenging than ever to hire, train, house, and monitor contact center agents – creating obstacles with the traditional agency model.

What it means for lending organizations
A digital collections solution must be built for scalability, enabling organizations to meet collections volume without adding agents to make outbound calls.

For more insights on digital collections, download our recent ebook, Ten Critical Questions: The Buyer’s Guide to Digital Debt Collection Solutions.

As we begin 2021, we’re looking ahead and seeing a lot to be optimistic about in the world of collections. Our industry is becoming more innovative and more consumer-focused. Digital channels, self-serve options, & machine learning create a new industry normal in which both collectors and consumers can succeed.

Get on the path to becoming a best-in-class collector this year. We’ve compiled our favorite tools and resources into a Digital Collections Roadmap. The resources on this map will help you assess your current processes, learn about industry benchmarks, and build a more innovative and consumer-focused collections operations in 2021.

Download the roadmap here.