4 tips for improving your collections strategy this tax season

By on January 23rd, 2020 in Industry Insights

The 2020 tax season is getting started early this year! The IRS will begin accepting returns for the 2019 tax year as soon as January 27th, but what does this mean for your business? According to the National Retail Federation, in 2018 and 2019, 34% of consumers intended to use their tax refund to pay off debts. With over $142 billion distributed through refunds last year, that leaves us with somewhere around $48 billion dollars directed toward debt payments across the country.

With numbers like that, it’s no surprise that tax season is to debt repayment rates what the winter holiday season is to massive retail sales. Let’s take a look at how you can make good on collecting while it’s on your customers’ minds this season!

Provide flexible payment options

US consumers have racked up over $4 trillion in debt, and that total has been steadily increasing for years. For many consumers, paying off a debt in full or even in the amounts offered can seem insurmountable. This is especially true of consumers that have multiple debts to pay off. 

With a surplus of tax return money burning a hole in their pockets, they have an opportunity to begin to relieve some of their debt pressure. By providing consumers with more flexible payment options, they feel comfortable knowing that they are taking steps toward financial well-being without having to commit their entire refund to a single payment.

In fact, we’ve seen that 60% of consumers that start on a payment plan will pay in full, settle in full, or remain active on that plan once they’ve started it! Getting your foot in the door can make all the difference.

Make yourself accessible

Being able to offer new payment options to consumers is one thing, but getting a hold of them to discuss those options is an entirely different challenge. Traditional collections agencies continue to work on a call and collect system, and they are reaching fewer and fewer consumers. As the number of consumers interested in answering their phones continues to decline, businesses have to consider new contact channels.

Effectively contacting consumers in debt starts with meeting them where they are: online. Your consumers are filing their W-2s, adding up their assets, and managing their incoming returns through tax software and banking apps. By reaching consumers by email, SMS, or even push notifications, you can introduce your payment plan options where they can see it without the pressure of a call from an agent.

Personalize (and humanize) your communication

Great payment options that consumers can afford? Check.

Reaching consumers when and where they are? Check.

Now how do you work to get consumers to follow through if you don’t have an agent on the phone? When a company is selling a product or service, there is a clear distinction between sales and branding. As you ramp up your tax time collection strategy, consider the impact of building trust in your brand rather than pressing consumers to pay right then and there. 

Even the most compelling payment options on the market and the most stellar team of collectors in the industry can’t solve for the fact that your customers may have other debts that they are making a priority. But if they recognize your brand as the one they can communicate with, as the team that understands their struggle, as the team that’s willing to work with them, they’re more likely to pay. Not only that, they’re more likely to work with you again in the future!

Partner with the right team

Many businesses, especially smaller businesses, take responsibility for collecting outstanding balances on their own, but collections is a complex industry from both a tactical and legal perspective. Compliance can be a massive, tangled hurdle for even the most diligent teams to clear. By finding the right debt collection agency to partner with, you can save you and your team the time and resources that would be invested in recovering lost revenue (and navigating the 538 new pages of the CFPB’s collections rules) and focus on what you do best.

Tax season is on its way, and customers want to clean up their debts as much as you want to recover on their delinquent accounts. Providing a compassionate and accessible collections strategy can offer great results for both your company and the consumers you serve, and if you need some back up, make sure you find the right agency for you.

Still looking for a new collection strategy for tax season 2020? You can reach out to our team to get started today!

Tips for hiring a debt collection agency for your small business

By on January 16th, 2020 in Industry Insights

In any industry where money is exchanged, debt is an inevitability. For small businesses, even small transactions can add up quickly and late payments, delinquent accounts, and chargebacks can start to bury an otherwise thriving business. This is where a debt collection agency can help your business succeed. 

Recovering payments on otherwise lost accounts probably sounds great, but let’s do some research before you get started! Here are a few things to consider when you begin looking for a collection agency for your small business.

1. Where can they collect?

Collections agencies can provide financial services to businesses ranging from those in their local area to companies across the country, but it’s important to validate that they can operate in your state! Local collectors may not have the licensing authority to collect across state lines. 

Larger collection agencies may also work across the country and even specialize in collecting certain types of debt for a given industry, such as point of sale transactions, credit card, rent to own products, loans, etc.

2. What industries do they serve?

The needs of B2C (business-to-consumer) businesses are dramatically different than those of primarily B2B (business-to-business) business lenders or tech start-ups. Collectors that specialize in specific verticals can ramp up and start collecting effectively, faster because of their familiarity with consumers in that space. Don’t be afraid to ask a collector for their experience working with other businesses like yours!

3. Are they legally compliant?

Beyond the local and state level access, federal regulations play a large part in a collector’s operational ability. Keep your business safe and verify that the company you’re interested in working with has a comprehensive compliance management system.

A proper system will be designed to be in compliance with the Fair Debt Collection Practices Act as well as other state and federal regulations.  Also, ask what preparations the company has made for compliance with the upcoming Consumer Financial Protection Bureau’s newly proposed rules.

When you begin your research into new agencies, consider visiting their Better Business Bureau page or looking through their Google Reviews. Consumers that have had particularly negative or even legally questionable experiences with the business may help you to recognize red flags before they become an issue for you and your team.

4. What is their pricing structure?

The price on any purchase for your business can make or break the decision to invest in a new product or service, and finding a debt collection agency at the right cost is no different. Most debt collection agencies will be priced in one of three ways: flat fee, contingency, or a hybrid model. 

  • A flat fee is a one-time service payment that coincides with signing a contract and will vary depending on the volume of accounts that are being collected on.
  • A contingency payment plan is a performance-based payment model where the collector only profits from the accounts they are able to collect on. Signing a contingency contract will typically outline the percentage that they will collect per account and may change from portfolio to portfolio. 
  • A hybrid model is often a custom solution that begins with a flat fee contract and expands out to accomodate more accounts if the collector is exceeding expectations. 

5. What communication channels are they using?

The debt collection industry is undergoing a massive change, and many collections agencies are struggling to adapt. Call-based collections has been the norm for decades, and a large percentage of debt collection agencies still rely on sending letters (91%) or making phone calls (89%) as their preferred contact channels. 

Unfortunately, these channels are no longer the ideal channels for consumers. Collection agencies that embrace digital channels (email, SMS messaging, etc.) are more likely to reach consumers when and where they like to communicate, and help to humanize the collections experience.

If you’re interested in learning more about the future of communication strategies in collections, you can read here!

Working with a debt collection agency may seem like a risk, but finding the right solution for your business can mean recovering revenue that would have otherwise been entirely lost. Just make sure that your new partner is the right one for your business. What other questions do you have about what it means to work with a collection agency? Let us know!

How do you effectively contact consumers in debt?

By on January 14th, 2020 in User Experience

According to the State of Collection 2019 report published by TransUnion and the Aite Group, “the challenge at the top of thought leaders’ minds [is] the increasing difficulty of connecting with consumers in a world where robocalls and scams run rampant.”

Consumers today are less and less likely to answer a call from a phone number that they do not recognize (only about 47% of calls are answered if the number isn’t saved), and the industry has to adjust if it wants to keep its head above water. 

One industry leader included in the survey said that “right-party contact has fallen off a cliff,” and for many debt collectors, the future feels bleak. In fact, three-quarters of those surveyed by TransUnion believe that upcoming regulatory changes from the CFPB will be difficult for them to implement into their business. 

This can all feel like a death knell for collections and recovery, but there is hope! Industry thought leaders believe that new communication channels and methods hold the future for the industry, and companies that are beginning the adoption process have already seen promising results!

A collection revolution

To get ahead of the curve, collection firms “are trying to understand people better and get the right data,” reports a third-party collections leader. Revolutions begin when the people rise up, or in this case, when they stop picking up. Looking at customer communication preferences, the world has largely gone digital, but “few [collections industry] respondents report their initial contact is attempted via email (3%).” 

So what are the new channels driving collections forward? How do you communicate with consumers more effectively as the age of call and collect fades? The importance of digital forms of communication can’t be overstated. 61% of agencies surveyed are already using email to communicate in some form with another 22% looking to add it to their strategy in the next two years. SMS & text messaging only has a 16% adoption rate with another 53% interested in further expanding. 

While there is power in alternative forms of communication, at the end of the day whether you’re using email, text, direct drop voicemails, or messages tucked inside candy wrappers to communicate with customers, the tool is only as effective as its ability to reach the consumer at the right place and the right time.

Moving into a digital future

With the start of a new decade, it makes more sense than ever before to shift toward a digital collection strategy to properly contact consumers in debt. One of the most difficult hurdles of integrating a digital approach for collections isn’t simply starting to send emails or text messages, it is integrating these digital channels at scale for hundreds to thousands of consumers.

This means that the solution to effectively contacting consumers as collections continues to evolve comes from a combination of understanding performance data, navigating the complexities of email deliverability, and learning to recognize and adapt to consumer preferences.

It’s no wonder that so many companies feel unprepared for the coming changes at a systemic level. Getting started and preparing for change with the right collector today can mean your collections strategy continues to grow for years to come.

Ready to go digital? Let our team know!

A new decade for debt collection

By on January 8th, 2020 in Industry Insights

A new year often marks the time for resolutions and major change. Goals are set. Budgets are ready to go. Product roadmaps start to unfold. For us, change and growth don’t just start and stop in January. TrueAccord is working to be better every day, and this year is no different.

We know that the collections industry is changing quickly, and we’re ready to ride the wave. Check out what TrueAccord’s leadership has to say about the future of collections and what we expect to see in 2020 and beyond!

Ohad Samet, CEO

We’ve seen a recent growth of digital debt collections strategies for to the benefit of both collectors and consumers. As the industry jumps forward, what do you see as the biggest challenge facing teams in the collections space?

The collection industry has been fighting a losing battle against the demise of phone calls as a valid contact channel. Rule changes and consumer behavior are rendering phone calls obsolete, and we’ve started to see the result in consolidation and closures. This trend will accelerate in 2020, and the realization will come, whether in 2020 or subsequent years, that companies will need to adapt.

And what makes this change such a significant challenge to existing collectors? Could a traditional call-based agency simply start sending emails to consumers in debt?

This shift isn’t only a conceptual one; it has deep technological and operational implications. Operating digital channels at scale is a new challenge, completely different than calling using a dialer, and traditional providers will find it increasingly difficult to catch up at scale. 

Emails and text messages aren’t simply cheaper alternatives to letters—they are two-sided, complex media that require data and inference infrastructure that’s difficult to build and maintain, especially with thin margins. Clients will need to re-evaluate how they work with a narrowing landscape of skilled, at-scale providers who can handle this new world.

Sheila Monroe, COO

As Ohad mentioned, the collections industry has largely remained unchanged for years and relied heavily on call-based collecting as its primary contact channel, what will make the 2020s different?

Technology is advancing exponentially. When combined with the lightning speed of adapting consumer expectations and a regulatory landscape driven largely by consumer advocacy, leaders in this industry will anticipate and create the way forward. Those playing catch up, or missing the cues, will inevitably struggle to survive. 

Those that lead the charge in the 2020s will drive a focus on machine learning, AI, advanced analytics, and automation as the entire industry finds itself at a tipping point in this new decade.  

New technologies are often developed to address a specific problem. What is the main issue you feel these new technologies are working to solve? 

The digital revolution has already started. Much of the technology exists, and many creditors and collectors are experimenting with digital channels such as SMS and email. That said, being able to close the gap between consumer expectations and creditor or collector offerings represents a high hurdle for many in this space that more complex machine learning and AI can help to address.

Kelly Knepper-Stephens, VP of Legal & Compliance

Rapidly advancing technology is complex in and of itself, but collections is also a carefully regulated industry. The last major update to collections law was in 1977, long before most of today’s technology was even a possibility.

We’ve spoken before about how the CFPB’s NPRM has set out to make major changes to existing laws in order to incorporate new technologies into collections regulation. How will those updates shape the industry going forward into 2020?

The NPRM, which should have a final rule sometime this year, makes clear that “modern” forms of communication (email, text, and others) are methods by which agencies can use to communicate with consumers. Those agencies who haven’t invested in these technologies yet are all starting to broaden their communication tools now in order to prepare.

As we move into the new decade, innovative agencies will continue to build out ways to reach consumers based on their preferences, using tools we don’t even know about today. We might even see the reputation of the industry shift as these friendlier collection methods allow consumers the freedom to choose how best to communicate and resolve their debt.

Looking ahead

Consumer communication preferences are evolving, new channels are becoming available to collectors, and merging these shifts together will be the key to successful collections through the 2020s.

TrueAccord launches redesigned website

By on November 12th, 2019 in Company News

TrueAccord is redefining the collections experience. In order to grow as a company and continue to revolutionize the industry, we’ve redesigned our website to better reflect our dedication to a positive user experience!

Designing for the user

Being a leading modern debt collection solution means striving to provide a better experience for consumers in debt and creditors alike. The first step in this design process was revamping the website architecture to reflect our business growth, with industry and role-specific pages, as well as more details around our unique product and superior performance. 

Fig. 1: The new homepage (left) provides an immediate look into who we are, what we do, and (literally) illustrates our value propositions for everyone to see! 

If a user arrives on the site without any knowledge of AI or machine-learning, we still have to be able to explain what we’re capable of! This is why we’ve also included our awesome product showcase video below and directly on the homepage!

Designing for the future

We recognize that the collections industry is often cast in a negative light, and TrueAccord is here to create an empathy-driven collections experience. Right now, not everyone fully understands what that means. Having a platform for our brand’s voice and mission means we can more accurately and effectively reach creditors looking for a collections solution. 

With this improved website redesign, we can ensure that when a creditor is looking for a new collections strategy, they recognize that today’s customers expect a service that considers their experience. We know that the future is digital, and now we can share evidence of that with everyone! By proving that we’re worth listening to and making TrueAccord a collections authority, we will redefine the industry.

The impact of change

I had the chance to sit down and speak with Shannon Brown, TrueAccord’s Head of Design and lead designer on the website rebranding, and Vivian Chau, Senior Manager of Brand and Content Strategy, to discuss the intent behind the redesign, the power of future-proofing our strategy, and what’s next for TrueAccord’s image. 

How do you feel the new site will help us better serve our audiences?

Brown: The first thing, I think, is that we’re a digital-first, technology-driven company in an industry that isn’t always fluent in the language of technology.

Chau: Right, we knew that the website had to showcase what makes us a leading tech and customer-focused collections service, and the next step in drawing attention to that is having a website that helps potential clients learn about how collections fits into their revenue cycle management.

We still want to be able to showcase our modern collections approach and how we leverage machine-learning, but the heart of that is driven by customer empathy.

With dedicated sections on industry-specific information and more details highlighting our product performance, I’m excited to share and build upon TrueAccord’s new digital storefront.

Brown: We also worked closely with our sales and client services teams to understand questions our clients have and included a Solutions section to better address how TrueAccord can help businesses across different industries and roles. 

That leads to the next question, then: are there any features of the new site that you’re especially excited about?

Chau: Yes! I’m particularly excited to have our new website on a standalone Content Management System. Our content team will be able to add and optimize the website without having to ask for Engineering help which gives us a lot of flexibility. I see this project as a jumping off point for our marketing and brand initiatives, as our website, as should our brand, needs to continually evolve and change with the company as it grows. 

Brown: Speaking of growth: we’re working to attract top talent here, so I’m excited about our revamped careers page. It truly reflects the experience of working at TrueAccord and gives prospective employees more information about what it’s like here. Part of that TrueAccord experience is that we’re working to stand out in the industry.

Our new About Us section really highlights our commitment to empowering consumers and delivering great user experiences, and that our mission and company values tie everything together.

You both touched a bit on the impact that a clearly stated mission has on a company’s brand reputation. How did you go about the design process knowing with TrueAccord’s consumer-driven mission in mind?

Brown: We wanted to give consumers a space on the site. A lot of consumers receive an email from us and come to TrueAccord.com to see what we’re all about. The previous website spoke to our partners, but didn’t really give consumers information about how the TrueAccord experience can benefit them!

A big part of that was redirecting our focus to how our technology increases recovery rates and creates great consumer experiences instead of explaining the technology itself.

Chau: It was important too that we created something that was easy for everyone to understand. We still want to be able to showcase our modern collections approach and how we leverage machine-learning, but the heart of that is driven by customer empathy. The redesign articulates that and the hope is that it excites prospective clients and potential job candidates. 

TrueAccord is on a mission to change debt collection for good. With powerful tools in place, we continue to expand and grow and better showcase our product, highlight our performance, and demonstrate our values to clearly illustrate what sets us apart in the collections space.

Want to learn more about TrueAccord? Connect with our team!