What is email deliverability and why does it matter to collections?

By on April 16th, 2020 in Product and Technology

Without the ability to successfully deliver your collection emails to a consumer’s inbox, email cannot be a successful collection method for your agency.  Email deliverability is the measure of the ability to successfully deliver an email to a user’s inbox. It is perhaps the most relevant KPI in an email-first digital collection strategy.  Several factors can influence whether or not your emails even reach people including spam filters, sending times and volume, and even the content of the message itself.

Want to learn more about building a scalable email strategy? Check out these tips from our team of deliverability experts!

A high deliverability rate then means that you are creating the right content, sharing it at the right time, and engaging your consumers. By measuring engagement through clicks, you can combine these statistics with an online payment portal to create an easily-tracked customer journey to payment without ever picking up the phone. 

Pivoting to tracking deliverability rates, clicks, online payment totals, and payment plans created creates a full digital ecosystem of KPIs with better engagement than traditional call-to-collect models. Here are a few tips for making email an effective part of your collections strategy.

Borrow email metrics from marketing experts

Our own email deliverability experts have years of experience working in the digital marketing space. KPIs like open rates, click-through rates, and conversion rates aren’t just for marketing teams working on generating leads, they can offer insight into the effectiveness of your collections efforts and help you understand whether or not you’re actually reaching your consumers. 

Tracking deliverability rates, clicks, online payment totals, and payment plans created creates a full digital ecosystem of KPIs with better engagement than traditional call-to-collect models. This is a lot of data to keep track of, and digital debt collection tools can provide some assistance in tracking digital and other tracking performance data

Emails also don’t depend on urgency in the same way that phone calls do. Customers appreciate the convenience of managing their finances on their own time (25% of our customers access their accounts outside of the call hours designated of 8am-9pm by the TCPA). Analyzing open rates for different send times provides a deeper understanding of when your consumers like to be reached.

Email marketing metrics not only accomplish the same goals as more traditional call-based KPIs, but you also have an even clearer vision of your collections performance.

Authenticate and build domain reputation 

Email authentication allows ISPs (Yahoo, Gmail, AOL, etc.) to properly identify an email’s sender. Any time an email is sent to and reaches a consumer, you are representing your company’s brand and reputation with that email. The actual process of email authentication requires the implementation of several authentication standards:

Sender Policy Framework (SPF)

This allows the owner of a domain to determine which servers their emails are sent from.

DomainKeys Identified Mail (DKIM)

DKIM is an encryption system that allows the email sender to claim responsibility for a message. That encrypted information can then be verified by the ISP. 

Domain-based Message Authentication Reporting and Conformance (DMARC)

This standard (and policy-making organization) further expands on these and adds linkage to the author (“From:”) domain name to improve and monitor the protection of the domain from fraudulent email. The DMARC organization continues to update policies related to domain security.

Brand Indicators for Message Identification (BIMI)

BIMI helps users to identify brands based on images included alongside their emails. Consider them an email preview profile picture to help users immediately recognize the email’s sender.*

*In order to integrate BIMI, you must have the other three standards mentioned here established first.

Interested in learning more about these standards? The Validity blog has a great series on SPF, DKIM, and DMARC for you to read here

An authenticated domain helps to boost your domain reputation. If your send domain (the part of an email address after the @ sign) has a poor reputation, it is more likely to be relegated to a user’s spam inbox. Taking the proper steps to build authentication standards can secure your reputation against a massive hurdle that you’ll encounter otherwise. 

Validate and increase RPC rates

Email validation is the process of ensuring that the emails you are sending to are valid and deliverable. Where authentication focuses on establishing your own email domains, validation verifies whether or not the consumer email addresses that you have on file are valid emails. 

Sending an email to a non-existent email address will cause the email to bounce; you will receive a notice that the email could not successfully be delivered. A high bounce rate from emailing too many invalid users will be perceived by ISPs as poor list management—a common practice of batch email scammers—and your sender reputation will be damaged and your deliverability will drop.

In the digital collections world, sending to valid email addresses is also directly related to your right party contact rate. By validating your email lists, you can quickly identify which of your consumers have valid contact information in your system. With this information on hand, you can directly reach out to those that do, build your domain reputation, and learn which of your customers you’ll have to reach out to for updated information.

Not every traditional debt collection agency is using email extensively, but it is an invaluable tool in the age of digital communication. Understanding the technical aspects of email deliverability and the challenges that come with properly scaling your digital communications will help you overcome contact hurdles that are more challenging now than ever before.

Are you ready to build a future-proofed digital collections strategy? Get in touch with our team to learn what we can do to help.

What role does social media play in debt collection?

By on April 8th, 2020 in Industry Insights

Social media in the business world is typically used in a few select ways: individuals that use platforms like LinkedIn to connect with one another, businesses that engage with directly with consumers on platforms’ brand pages, and businesses that place advertisements to reach specific audiences of prospective customers. 

In the debt collection industry, the use of social media is regulated by the Consumer Financial Protection Bureau when used as a channel by which traditional call-to-collect debt collection agencies attempt to reach consumers that they couldn’t reach by phone must comply with the Federal Debt Communication Practices Act (FDCPA) and other state and city consumer protection laws. 

The CFPB’s new debt collection rule addresses appropriate ways to use social media (among many other things), but the rule doesn’t explore the use of social media as a tool beyond private messaging. Social media platforms are very useful tools for digital debt collection agencies and creditors to communicate with consumers but not in the way you might think.

Two things you should not do with social media

Friend request

Sending friend requests to join a consumers’ social network without making it clear that the purpose of your friend request is to collect a debt is a deceptive practice. Businesses attempting to reach a consumer should never attempt to have an agent attempt to secretly infiltrate a personal network in this way.

Instead, if you are going to send a friend request to a consumer, your message should be similar to the Zortman message and make your intent behind the request clear. Beyond that,  and must be a private request (see below on third party disclosure concerns). 

Post on feeds

Posting a debt collection communication on a public-facing account that allows others to see the content of the message on their feed, is an explicit violation of the FDCPA’s prohibition on third-party disclosure. This would publicly expose the existence of that consumer’s debt to anyone who can view the page and is akin to the old (now prohibited) practice of public debtor boards that the FDCPA sought to end.

This doesn’t mean that social media platforms are entirely unusable in the collections space. They can actually prove to be great places to share resources and provide easy access to your team so that consumers can reach you at their discretion.

How social media can help digital debt collection

Directing to support teams

The easiest way to make effective use of social media platforms for your business is to clearly present your company’s website, phone number(s), email address(es), and mailing address(es) online. Increasing visibility and keeping your lines of communication open can lead to greater engagement. 

This is especially important for digital debt collection agencies that make use of payment portals and other online tools as you can guide consumers directly to the answers they’re looking for.

With a public-facing social media account, you will find that consumers will reach out to you with questions—even questions related to their specific accounts. You want to make sure that you are prepared to answer these questions in a discreet but helpful manner so that the consumers get the information they need without any extra disclosures about their debt. 

Consumers expect this ease of access from any business, and it can make an enormous difference in the collections industry that remains largely call-based. Here’s an example of a consumer reaching directly out to our team on Twitter!

The identity of this consumer has been anonymized here, but this is a public-facing post directly on our feed.

Brand Awareness 

Social media platforms offer businesses the opportunity to advertise directly to specific customers based on their online activity. Collections agencies can use social media advertisements to build on brand awareness and help gain customer trust. Providing a hyperlinked statement about your company such as your mission, motto, or BBB rating that will appear in the personal advertising feed is not a collection communication – as long as it does not explicitly address that the consumer is in collections and cannot be shared to their social networks. 

It allows the consumer, if they choose, an easy way to investigate a company’s website, identify your business as legitimate, and gain trust in your brand.

The role of social media in debt collection continues to evolve as legislative bodies more clearly identify how it is currently being used and how those uses overlap with existing legislation. Social media platforms are an omnipresent part of consumers’ lives, and it may seem like an easy way to reach them, but the most important thing to consider is the compliance and security of their information on evolving channels. 

Mastering digital communications is easier when you choose a team at the forefront of the industry. Interested in learning more about digital debt collection? Check-in with our team.

3 key challenges to collecting pre-charge off debt

By on April 7th, 2020 in Industry Insights

Managing accounts and ensuring regular payments is an essential part of being a functioning business. This is especially true for small businesses where several small payments (or one large payment) being past-due can make a massive difference. Many companies will put off hiring a collection agency until they have defaulted accounts rather than creating a partnership at an earlier delinquent stage that can grow as needed.

When it comes to maintaining consistent payments, all parties involved—from the creditor to the consumer—would rather keep accounts up to date than not. When consumers’ financial situations are impacted, and they are unable to make payments for a long period of time, their defaulted accounts are “charged off” and considered a loss by the creditor, and sometimes a partnership with a debt collection agency begins.

This is the model for a large number of businesses, but collections can begin sooner and account balances can be resolved more quickly to the benefit of everyone. So why aren’t more businesses seeking to collect in the pre-charge off world? Here are three major challenges that make managing early-stage (aka pre-charge off) collections more difficult to collect than post-charge off balances.

What is the difference between pre- and post-charge off debt?

In order to understand the difficulties that come with pre-charge off collections, we first have to understand the clear differences between pre- and post- from the creditors’ point of view.

Pre-charge off

As mentioned above, pre-charge off or early-stage debt can include overdue payments, previous payment minimums, late payment fees, and interest. These payments had specific due dates and specific amounts due on those dates which the consumer did not meet.

Consumers that are not able to meet these minimum monthly payments or similar terms are subject to potentially having their line of credit limited, additional interest and fees, negative entries on their credit report, and losing access to the credit altogether. Once a late payment extends beyond a certain window of time (typically six months from the date of delinquency) the account is “charged off.”

Post-charge off

Post-charge off (also known as late-stage collections) is comprised of the total account balance plus any interest and fees accrued after the customer stopped making payments throughout the pre-charge off period. Late-stage payment plans can provide a bit more flexibility in their payment terms.

This is in part because the creditor is unsure as to whether or not they can recover any of the missing payments and because the delinquency has already been added to the consumer’s credit report during the pre-charge-off stage. As long as the consumer sets up a payment plan, a business has little need to pursue further action such as filing a lawsuit.

Some of these differences highlight the challenges posed to companies and debt collection agencies looking to collect early stage payments. 

Minimizing roll rates

The key metric in the early stage collections space is the roll rate of your accounts. Roll rates measure the percentage of accounts that shift from one bucket to the next, typically in 30-day increments (e.g. payments that are 60 days overdue could shift to the 90 days overdue bucket and increase the rate). 

In the post-charge off space, where collection volume is a leading indicator of recovery, it can be easier to judge the efficiency and performance of collections efforts. Pre-charge off work requires faster action because accounts can quickly roll from bucket to bucket. 

The urgency of due dates

Part of the challenge of reducing roll rates is rooted in the more urgent nature of early-stage collections. Accounts that have reached late-stage collections have been overdue for 180 days or more and have already been reported on a consumer’s credit report. 

Pre-charged off accounts can involve collecting payments on accounts 1 or 2 days past due. The longer these accounts go unpaid, the longer they harm the creditor’s bottom line and the longer they can accrue interest, late fees, and negative credit reporting for consumers. An urgency exists for the creditor to remind a consumer of the missed payment obligation and understand if a consumer is experiencing a financial hardship and for the consumer to avoid further delinquency or even default.

Increased call volume

Traditional call-to-collect debt collection agencies that work in the post-charge off world already work to meet enormous contact demands. While digital debt collection agencies and tools can help to dramatically reduce the need for agent-driven call centers, pre-charge off collections requires additional support that benefits from a digital strategy. 

Due to the urgency of early-stage collections needs and the compounding nature of late fees and growing interest, a larger percentage of consumers reach out to discuss possibility of waiving late fees or receiving some one-time relief from their assistance. In order to meet the increased demand for these communications agencies must prepare to scale their teams and systems appropriately and manage rapidly expanding consumer needs.

To eyes outside of the collections industry, collecting debts may appear to be uniform, but adapting to work with both pre- and post-charge off debts takes substantial changes to a company or agency’s infrastructure. Partnering with a company with an established history of effective scalability and growth can smooth the transition and help your business grow.

Interested in learning more about how you can build an early-stage collections strategy? Talk to our team today!

4 ways collections can help consumers in a recession

By on April 1st, 2020 in Industry Insights

Consumer debt in the United States continues to climb into the tens of trillions of dollars, and as unemployment numbers continue to rise consumers are expected to continue to pay for essential services such as rent and utilities, companies are likely to see an exponential rise in delinquencies. All of these things together can cause financial spirals, especially for those already struggling to pay their bills.

In the midst of troubling economic downturn, it is the debt collection industry’s responsibility to remain a financial service and not create more damaging burdens. Here are four things you and your company can do to continue collecting and maintain customer relationships and loyalty even through challenging economic hardships.

Acknowledge the challenge

Communication is key. Your consumers have to know that they are seen and heard. Your mission has to help consumers navigate the challenges they’re facing.

Visitors to TrueAccord’s consumer website immediately see a banner drawing direct attention to the economic crisis. The banner links to a page with resources for those impacted (and available to those who are not impacted by COVID19) helping to answer the most frequently asked questions related to those with upcoming payments and in settlement plans. 

Provide non-collection related communications

Send communications that do not imply the existence of a debt. Do not mention any account, the balance due, or a demand for payment. Instead, provide other resources that can help anyone during this pandemic, like work from home opportunities, childcare assistance programs, and local resources for those in financial distress, including area food pantries and safe shelters. By providing tools that can aid consumers in need of help, you can be a guiding force for overcoming their financial burdens. 

Individuals in debt often need these resources year-round, not just in the middle of a crisis. These can include tools such as budgeting resources, debt payment calendars, or links to job boards for companies still hiring.

You may also consider sharing less direct financial resources such as educational tools that may be especially helpful to individuals seeking to improve their situation and parents hoping to address their family’s needs.

Extend payment plan lengths

One step that creditors can take that is simple but impactful and can help to alleviate financial concerns is to extend the length of consumers’ payment plans. Agreeing to longer payment plans gives consumers more time to pay, creating lower monthly payment rates, and leaving more dollars they can allocate to more immediate needs. 

Machine-learning and artificial intelligence can help to guide meaningful payment plan offerings. Read more about how new technologies are shaping digital debt collection.

Another step allows consumers to defer a payment. For many consumers in settlement arrangements, deferral may provide the assistance they need while not resulting in the loss of the settlement offer. In fact, North Carolina recognized this and passed this emergency law to make sure all consumers in the state have this option for the next 30 days.

Give consumers the power to manage their debts themselves

Implementing digital collections tools into your business can empower and educate consumers. Online portals and payment systems offer thousands of consumers the ease of access that they require of other financial institutions. 

Ideally, digital tools should extend beyond just payment options and should include opportunities for consumers to:

  • Make adjustments to the length and amount of their payment plans
  • Skip or defer a payment without losing a settlement
  • Dispute all or a portion of their debt
  • Apply for hardship pauses
  • Enter bankruptcy information

All without needing to speak to an agent.

The best debt collection practices should prioritize consumers’ needs and enable them to control their finances. It’s critically important to provide consumers with flexibility and the ability to customize when and how they pay.

Many in debt have tight budgets, live paycheck to paycheck, and sometimes are forced to choose between basic needs and paying bills. Leading the collections industry with compassion and empathy for those in need can make a lasting impact on consumers and creditors alike. 

Want to learn more about what we’re doing at TrueAccord and how we can help your consumers? Get in touch with us!

4 reasons companies worry about digital debt collection

By on March 26th, 2020 in Industry Insights

Committing to work with a collections agency can help to reduce the strain of losses on your business. Whether you’re an eCommerce platform with mounting chargebacks, a small lender, or a rapidly growing bank, working with the right collection agency can reshape how you manage delinquent payments. 

Some digital debt collection options also offer self-service products or platforms that allow companies to manage their collections efforts with an internal team supported by powerful, digital tools while other digital companies offer full-service collections.

No matter how you (or your collection agency partner) choose to collect, there are pros and cons to different approaches, and the newness of digital debt collection can create some cause for concern. It’s important to be informed and understand how digital debt collection can help you and actually directly combats many of the risks associated with collections.

“There’s a compliance risk”

Debt collection is a tightly regulated industry and in order to collect debts safely, companies have to conduct extensive training and build processes that adhere to those regulations. This includes federal laws like the Fair Debt Collection Practices Act (FDCPA), the Telephone Consumer Protection Act (TCPA), and any legislation passed through the Consumer Financial Protection Bureau regarding collections practices. Regulations on collections also vary broadly at the state-level. 

With all of these regulations in mind, companies that are beginning their debt collection efforts may be wary of investing in an extensive, internal infrastructure and will instead partner with established third-party debt collection agencies. Several digital debt collection platforms and tools have built-in compliance measures, but they still require internal teams to manage. With the proper systems in place, however, they can be used to great effect as they are coded to align with legal compliance measures. 

TrueAccord’s legal leadership team has been in the industry for decades. You can check out some of our legal advocacy work here and here!

Full-scale digital debt collection agencies take this a step further and are able to provide comprehensive debt collection services with built-compliance software alongside technology experts that manage the product for you. With measurable digital channels taking priority over agent calls, compliance fixes are integrated into every communication, no training required.

“This will impact how we talk to consumers”

Traditional collections agencies are driven by a call-to-collect model of business that leans on agents calling consumers. The collections industry has remained largely unchanged in its practices for decades, but consumer preferences have shifted. It’s becoming increasingly difficult to reach consumers over the phone; in fact, in the State of Collection 2019 report, one industry leader included in the survey said that “right-party contact has fallen off a cliff.” 

Transitioning to digital debt collection from traditional models is easier than you might think. Want to learn more about how easy it can be? Get in touch with us.

In order to meet the growing demand for convenient communication methods, digital debt collection strategies are redefining the industry’s approach to connecting with consumers in debt. While this digital transition will have a lasting impact on the collections industry, companies looking to start or change their collections strategy have the opportunity to work with partners that are embracing the change. 

“Setting up new technology takes time”

Implementing new processes always takes time. Using a traditional call-to-collection agency still requires building a business partnership and sharing debt portfolios for agents to begin working accounts. In the digital debt collection world, implementation can begin quickly and is made easier by uploading CSV files of contact information directly to the online platforms and applications.

Using internal digital tools can also cause delays due to the need for introducing agents and other team members to the system and allocating training time and resources to building infrastructure. Full-service digital-first collections agencies are able to merge the simplicity of starting with a digital strategy with the value of a dedicated team built specifically to manage these new processes. 

“We aren’t ready to bring on a new tool or partner right now”

Timing can be a blocker for any number of company decisions. Collections and recovery may be a year-round function, but teams still see a seasonal ebb and flow in payment rates. Trying to adopt a completely new strategy in the middle of a busy tax season, for example, can feel like a gamble. Or maybe you’re in the middle of a major acquisition or change in leadership and the business’ future is uncertain.

Even in times of change, it’s important to understand that digital collections tools perform better over time than traditional collections agencies. By beginning your digital approach sooner, even with a small subset of accounts, you can begin to compare digital efforts directly to other collections partners.

Comparing digital-first agencies and tools directly to traditional competitors on the market helps to illustrate the power of digital infrastructure on contact rates. The sooner you start, the sooner you can ramp up, and the sooner you can collect. 

Digital debt collection may be new, but that newness only serves to improve existing systems. Companies that depend on traditional collections efforts can see substantial growth in outreach using digital channels, and those that are not yet collecting have more opportunities to get started now than ever before. Future-proof your company’s losses, improve recovery rates, and keep your customers happy all at the same time. 

Connect with our team today to learn more about how digital debt collection is changing the industry for the better.

One True Holding Company writes to the CFPB

By on March 24th, 2020 in Company News

The Consumer Financial Protection Bureau’s Notice of Proposed Rulemaking (NPRM) is set to help shape massive changes to the debt collection industry. In an effort to continue our mission to protect consumers from predatory and aggressive collections experiences, the co-founder of TrueAccord, Ohad Samet, recently drafted a letter to the CFPB’s Director Kathleen Kraninger.

In the midst of major economic uncertainty, we understand that we must be compassionate when many consumers are struggling financially. Offering consumers in debt flexibility by supporting and expanding the industry’s digital infrastructure enables us to extend self-service options to those that need it most and limit their exposure to collections efforts that are intrusive and harassing. 

Some states are considering freezing collections efforts, but we continue to believe in consumers’ ability to manage their finances for themselves. Access to online portals and self-service payment plan adjustments can help them manage their overdue accounts at their own pace, even in times of financial instability. A complete suspension of their ability to pay, if and when they can afford it, can make matters worse.

Passing the NPRM into law can help to restructure collections to protect consumers today. 

You can read our letter to Director Kraninger below:

Our letter to the Consumer Financial Protection Bureau

Dear Director Kraninger,

I am the CEO of One True Holding Company, a technology company providing business- and consumer-facing solutions in the debt collection space. Our subsidiary TrueAccord Corp. offers machine learning-based, digital- and mobile-first servicing for debt in collections and recoveries. Our subsidiary True Life Solutions offers consumers a SaaS platform that consumers can use to contact collectors and creditors digitally.

We service millions of consumers on a monthly basis, sending more than 18 million emails a month. As a technology startup at the forefront of debt collection efforts, we have both quantitative and qualitative views of the state of the economy and debt collection within it.

Times like these require swift action, and technology allows us to empower consumers while reacting to changing circumstances without having to re-train a large workforce. Since the crisis began, we have been able to seamlessly launch features allowing consumers to modify their payment plans on their own and set up longer and more flexible payment arrangements. We are launching tools for clients to offer automated digital relief programs. Consumers still interact often with the emails we send as they try to stay abreast of their finances and remain informed. 1

Our pandemic response page, offering tools and perspectives about finances in this time, sees more than 1,200 daily visits. Technology offers better service, a sense of empowerment and agency, and keeps our users informed through complicated circumstances. As a consumer-focused company, we carefully track our customer satisfaction (CSAT) scores, and those have remained high (at 68.45% for the month of March). Consumers appreciate our approach, as these reviews also show:

Consumer review from 3/19/20 

You were patient. All emails were kind even from the beginning of my debt. You motivated me to repay my debts and monitor my credit. You appreciated me and I felt the extraordinary customer service from the day I first took the loan. I am grateful and even during this pandemic [emphasis added] I felt my loyalty to complete my payment of this loan over any other bill. Thank you again!

Consumer review from 3/18/20

Settled in a manner that facilitated affordable payments on a schedule that fit my life. I wish all collection agencies were this caring and flexable [sic]. Hopefully, I’ll never have another collections account, but if I do, I pray it’s with this agency.

As a single father making minimum wage, finding money to pay bills that aren’t crucial to keeping my kids healthy and happy is a real struggle, and my credit score had taken the hit in the past. I am really, truly grateful this is one acct that gets crossed off my list. Thanks!

I write today to ask the CFPB to accelerate its NPRM and swiftly push the industry to rely predominantly on digital communications for the purpose of debt collection. We need to continue to communicate with consumers through their channel of choice, in a non-intrusive manner, allowing them to easily manage their finances while controlling who they want to interact with. We need to continue to allow them to access their accounts and make adjustments to fit their personal circumstances.

Through this last week consumers have continued to set up customized payment plans on a daily basis, at a rate comparable to pre-tax season behavior. These are consumers acting on their own, responding to our low-frequency digital contact efforts. Finances aren’t one-size-fits-all, and a digitally native collection service supports this variety even in these trying times.

Thank you for your consideration and leadership in these trying times. We are eager to share as much data and qualitative observations as possible to support your policy-making and continue this conversation with a focus on consumer protection, choice, and experience

Citations

1. More than 20% open rate per each individual email broadcast as of 3/21, comparable with and exceeding eCommerce benchmarks

How can you help protect New Yorkers from aggressive collections?

By on March 17th, 2020 in User Experience

The collections industry continues to expand its digital footprint as growing consumer preference for digital channels combines with stricter regulations on call volume and call rates. Digital communications are standard today, but a key law passed in 2014 by the New York State Department of Financial Services of New York limits third-party collectors’ abilities to connect with consumers via email. 

We’ve seen the impact that digital communications can have on people’s lives, and you can help your fellow New Yorkers by sending the governor and your local official an email using the template at the end of this article!

The law (23 NYCRR 1)

Many existing collections laws are rooted in the Fair Debt Collection Practices Act (FDCPA) from 1977, long before emailing, text messaging, and direct voicemail technologies existed. In an age of growing prefernece for digital communication, New York’s 2015 law—§ 1.6 of 23 NYCRR 1—states that collectors may only contact consumers via email if they have:

  1. Voluntarily provided an electronic mail account to the debt collector which the consumer has affirmed is not an electronic mail account furnished or owned by the consumer’s employer; and
  2. Consented in writing to receive electronic mail correspondence from the debt collector in reference to a specific debt. A consumer’s electronic signature constitutes written consent under this section. 

Shortly after the law took effect the New York Department of Financial Services compiled a list of answers to frequently asked questions. You can review them here.

These laws were put in place to protect consumers from collectors excessively emailing them, but consumers are not required to opt-in for debt collectors trying to call them on the phone. In the State of Collections 2019 report published by TransUnion and Aite Group, one collections industry leader said that “right-party contact has fallen off a cliff,” and for many debt collectors, this means that their existing call-based strategy is suddenly becoming unviable. 

On the other hand, we’ve found that consumers provide their email address opting into electronic communications with their creditors. In fact, 95% of accounts placed with TrueAccord come with an email address provided with the placement file. Of those we reach with our digital-first strategy, 65% of them open at least one email, and 35% click at least one link to begin the process of repayment.

When debts go unpaid, some creditors and collectors turn to legal action, and New York is suffering a resurgence of lawsuits since the passage of the 2015 debt collection law. In fact, 2017 saw a 61% increase in debt collection suits according to the New York State Unified Court System. In other states across the country, TrueAccord has seen dramatic growth in consumer debt repayment using email and other digital channels as the primary mode of communication. 

At TrueAccord up to 96% of accounts are resolved without speaking to an agent and nearly one-third of users prefer to manage their accounts outside of the “presumptively convenient” hours (8 am to 9 pm) legally outlined by the Fair Debt Collection Practices Act.

Consumers understand the ease of this digital management system and regularly share their positive experiences with a digital-oriented collection strategy. Here are a few:

  1. I liked that the email system was used rather than phone calls. I found it easy to use, and it helped me to gather information, figure out a plan, and get the bill paid. It was a small balance, but during this time, it seemed bigger to me. Thank you for your service.
  2. This was the best way for me to take care of my outstanding debts since I’m always on the road. Thank you for taking your time with me and not blowing up my phone!
  3. TrueAccord has been friendly and helpful, and your systems are always up and running for me to use. You should be proud!

The power of digital communication

Digital channels give people the power to access and manage their debts on their own time without having to work directly with call-center agents. Moreover, it provides greater consumer protection by providing a paper trail of debt communications, unlike aggressive phone calls that consumers most likely wouldn’t be able to record. The more hassle-free options that folks have to pay, the more likely they are to get out of debt and avoid aggressive call-and-collect agencies.

We want to encourage New Yorkers to make their preferences for easily accessible digital channels to be heard. Pay off your debts on your time, not on an emotionally charged phone call or in a courtroom. 

Reach out to Governor Cuomo by clicking here with the template below and make your voice heard. Once you’ve sent your email, share this information using #CollectWithoutCalls and let the governor’s office know that digital is easier for everyone!

Email template

The following text may be used as a template for reaching Governor Cuomo or other elected officials in your state. Please replace any content in the parentheses with your own information.

Subject: RE: 23 NYCRR 1

Dear Governor Cuomo,

My name is (your first and last name) and I am a (family member/service provider/advocate/community member) who resides in your district.

I feel that 23 NYCRR 1 concerning debt collection by third-party debt collectors and debt buyers places an undue burden on consumers in debt. It limits the ease and efficacy of digital communications and gives priority to intrusive and aggressive call-and-collect agencies. I prefer to use email and the internet to manage my own finances, and permitting 3rd-party collectors to email me directly (if / when) I am in debt gives me the ability to manage my accounts on my own time rather than at the collector’s discretion.

Please read here for more information about consumer preferences and see the movement on social media. #CollectWithoutCalls

Sincerely,

(Your name)

(Your city)

3 essential tips for managing chargebacks in eCommerce

By on March 12th, 2020 in Industry Insights

As more consumers shift away from physical stores and toward subscription services, online storefronts, and digital banking we have seen a growing number of chargebacks in the eCommerce space. In order to accommodate this, some companies even add costs associated with chargebacks to the price of their products (it’s estimated that for $100 in chargebacks, you are actually losing out of $240).

Other companies, unable to recoup losses themselves, send chargebacks to collection agencies, and they may be waiting for too long. Here are three things your eCommerce business can do to better understand chargebacks and mitigate your losses.

Analyze why the chargeback was filed

Not all chargebacks are fraudulent. Consumers may file a chargeback due to a billing error or an unauthorized purchase was made on their card. Doing an in-depth analysis of accounts prevents potentially damaging your own reputation with a consumer by sending them to collections without first seeking resolution. This also provides you with an opportunity to then reach out to your customers and understand the reasons they renege on their payment so that you can possibly prepare for similar situations in the future.

This also enables you to create a larger chargeback strategy. Being too lenient or allowing chargebacks to go unmanaged will leave you at a loss, being too strict may alienate otherwise loyal consumers, and investing time and money into smaller or more resistant accounts may lead to worse losses.

Developing a routine for who to reach out to and how to reach them based on historical behavioral data can help you to best recoup your losses before needing to send accounts to collections.

Start a conversation with your consumers

These communications can open more details than internal analysis. A consumer may have provided incorrect measurements for a garment or accidentally order 200 of something when they meant to order 20 and prompted a service dispute. You can work to maintain a relationship with the consumer and protect your brand. Chargebacks aren’t always driven by malicious intent, and you might be able to resolve the issue together.

Connecting with your consumer and resolving the situation is a best-case scenario post-chargeback. If you reach them and they continue to dispute the charge, cite your reasons and offer them an opportunity for response.

When you are supported by analytics, you have valid grounds to inform them that the chargeback will be sent to collections; ensure that you have documented your communications with them and send the account to your debt collection partner.

Find a debt collection agency before you think you’ll need one

The collections industry is often seen as a last resort for eCommerce teams, but waiting until your financial situation feels dire means that the collectors you hired are pressured to perform (and behave) aggressively and quickly. 

These collection strategies are often the foundation for the negative stigma surrounding the account recovery industry, and working with a debt collection partner that supports your brand and can collect chargebacks at a controlled, even rate provides you more flexibility. A more gradual effort can help you maximize your returns and protect your business.

Digital-first collection strategies can not only support but can help build your brand reputation! Read more about how they can help.

Partnering with the right collector can also, counterintuitively, help to prevent accounts from being sent to collections. The negative stigma of the collections industry extends to the minds of consumers, and many consumers fear the prospect of their accounts ending up in collections.

Whether this is due to the potential damage to their credit scores or their perception of traditional call-and-collect debt collection agencies, simply having a collections partner can help to reinforce your valid claim to payments before your recovery specialists ever see the account.

Chargebacks can be damaging to a business and catastrophic to small businesses. By effectively tracking them, understanding how to talk to your customers about their chargebacks, and recognizing when to escalate the issue to a partner company, you’ll be prepared to protect your eCommerce business. 

Ready to find the right partner for your team? Connect with us and learn what we can do to help!

How is machine learning driven by experimentation?

By on March 6th, 2020 in Machine Learning, Product and Technology
microscopes in a laboratory

Building scalable technology requires constant evaluation and improvement. Experimenting is defined by trying new things and creating effective changes that help teams to make informed decisions around product development. Trying new things creates momentum, and organizations that are driven by experimentation turn that momentum into growth.

Machine learning and artificial intelligence support large-scale, concurrent experimentation that helps these technologies to improve upon themselves. With the right tools in place, you can test a variety of scenarios simultaneously.

For example, we use our systems to track changes in the collection process and better understand how our digital collections efforts can be improved. Since digital-first channels offer thorough tracking and analysis, including real-time tracking on our website, we can learn in short cycles and continuously improve our product. 

This kind of frequent experimentation helps to avoid making product development decisions based on untested hunches. Instead, you can test your instincts, measure them carefully, and invest energy where it matters.

Machine learning drives the experimentation engine

Aggregating historical data and processing it using machine learning algorithms and artificial intelligence helps you to understand their effectiveness. Regardless of how intelligent your learning algorithms may be, waiting to test and expand your knowledge base before marching blindly ahead can make or break the success of your product.

To launch an experiment, we follow these steps: 

  1. Start with a hypothesis that you want to test
  2. Assign a dedicated team to manage the experiment
  3. Monitor the performance of the test as it is guided by machine learning
  4. Iterate

B2B companies can benefit from partnering directly with clients to customize experiments for their unique product lines in order to make experimentation-based optimization an ongoing process for both new and existing business. Keep in mind that the goal of product optimization is not always jumping to the finish line. 

Understanding how your product works ultimately offers you and your customers more value, but it’s easy to become distracted by positive outcomes. Effective, scalable products require intentional design; if you’ve accomplished a goal, but the path there was accidental, taking a few steps back to review that progress and test it can help you to get a clearer picture and grow the way you want. 

Below are two sample experiments we conducted to optimize our machine learning algorithms. 

Experiment #1: Aligning Payments to Income

Issue

The number one reason payment plans fail is consumers don’t have enough money on their card or in their bank account. 

Hypothesis

If you align debt payments with paydays, consumers are more likely to have funds available, and payment plan breakage is reduced. 

Experiment

We tested three scenarios: a control, one where we defaulted to payments on Fridays, and one where consumers used a date-picker to align with their payments with their payday. After testing and analysis, we determined that the date-picker approach was the most effective as measured by decreased payment plan breakage without negatively impacting conversion rates.

By understanding which payment plan system was the most effective, we were able to provide our AI content that offered these plans as options to more consumers and integrate the knowledge back into our systems and track those improvements at a larger scale!

Experiment #2: Longer payment plans can re-engage consumers

Issue

Customers dropped off their payment plans and stopped replying to our communications.

Hypothesis

Customers can be enticed to sign up for a new plan if offered longer payment plan terms. 

Experiment

We identified a select group of non-responsive consumers that had broken from their payment plans and sent them additional text messages and emails. These additional messages offered longer payment plan terms than the plans they broke off from.

Ultimately, we found that offering longer payment plans, even with reference to the consumer’s specific life situations didn’t lead to an increase in sign-ups. The offers that we sent had high open and click rates but did not convert. This indicated that we were on the right track but needed to iterate and come up with another hypothesis to test.

This experiment was especially important because it illustrates that not every hypothesis is proven to be correct, and that’s okay! Experimentation processes take time, and the more information you can gather, the better your results will be in the future.

We’re able to simultaneously update our product and continue experimenting, thanks to algorithms called contextual or multi-armed bandits. Here’s what you need to know about these algorithms and how they help!

Building the newest, most innovative products feels exciting, but building without carefully determined direction can be reckless and dangerous. By regularly evaluating the effectiveness of machine learning algorithms, you can make conscious updates that lead to scalable change, and experimentation paves the way for consistent product improvement.

5 ways debt collection uses machine learning and artificial intelligence

By on February 28th, 2020 in Machine Learning

Machine learning algorithms are playing a key role in the collections industry’s technological growth. Companies are working to integrate artificial intelligence and machine learning into their strategies in response to changing regulations and evolving consumer preferences. These processes can look dramatically different from business to business!

Some technologies are being applied to optimize traditional call and collect strategies while others are building digital-first outreach platforms. Understanding how these algorithms are working for the industry can provide insight into the future of collections. 

Business intelligence and analytics

Business intelligence platforms are the foundation for the future of collections. They not only help companies understand how to best reach their existing accounts using traditional collections strategies but also integrate into other digital tools to create powerful automated systems. 

These algorithms process large sets of data such as call times, call effectiveness, the value of certain accounts, collections rates, and many other variables. By analyzing this information, teams can optimize their outreach strategies by focusing on accounts that are more likely to be collected on, understand what times of day or channels work the best, and even determine what language to use in conversation with specific subsets of accounts. 

Portfolio evaluation and exchange

By adding a clear scoring system to business analytics tools, teams can share their portfolios in an online marketplace with other creditors and debt buyers in order to buy, sell, and even outsource debts as needed.

While debt marketplaces are not new, real-time scoring updates and activity insights provide a dynamic, cloud-based view into a fluctuating market. 

Human-like contact center agents

As companies evaluate their data and optimize their outreach, they can also integrate digital agents to interact with consumers over the phone. Artificial intelligence software can be used to create human-like voices and personalized experiences for consumers.

These platforms can operate at scale more easily than sprawling call centers but still rely on a traditional call and collect model that consumers are shying away from. As consumer preferences shift toward digital channels, more machine learning tools can help to optimize for an omnichannel experience.  

Digital collections platforms

Digital collections software is able to optimize performance data and leverage it using a diverse, multi-channel communication approach. Phone calls may be included as part of a larger strategy, but these platforms are primarily built around modern consumer channels including email, SMS, push notifications, and direct drop voicemails.

Contextual bandit algorithms take channel selection to a level beyond traditional A/B testing. Even if 10% of your consumers prefer one message type to another, it’s important to understand all of your audience’s preferences.

Digital channels integrate seamlessly with decision making algorithms and can optimize communications in ways that call systems cannot. For example, digital channels like email can reach consumers outside of hours typically limited by the TCPA. 

25% of TrueAccord’s consumers access their accounts outside of the 9am to 9pm when traditional agencies cannot legally reach them.

Digital debt collection agencies

Each of these implementations of machine learning help to build a more personalized, more focused, and more forward thinking debt collecting experience for both consumers and creditors. One consistent factor that does limit their effectiveness is the need to build them into existing systems or alter processes at scale. 

A collection agency that bears the consumer in mind and has a machine learning-driven, digital-first strategy removes this hurdle and enables a full-service, easy to use experience for both companies and consumers. With these technologies built into a team rather than a product or service, digital debt collection agencies can provide the services outlined above alongside a dedicated infrastructure and a team of technology experts. 

Choosing the right tools and support for your company’s collection efforts is more important now than ever before, and understanding the options that are available can help you to future-proof your strategy before it’s too late.

Still have questions? Our team is happy to help make sense of what a digital-first collections agency can do. Set up some time to chat!