Author: Noelle Robillard

Millions of Student Loans in Debt Collection, How Did We Get Here?

By on May 15th, 2025 in Industry Insights

You’ve seen the headlines—the federal government last week resumed collecting defaulted student loan payments from millions of people for the first time since the start of the pandemic. And how—debt collection will be through a Treasury Department program that withholds payments through tax refunds, wages and government benefits. This will undoubtedly have negative effects on credit scores and the resulting loss of access to funding going forward for many Americans.

How did we get to this point where so many people with student loans are unable to make payments on them? Taking a look back at the financial activity of those who deferred student loan payments in the first place gives us a good jumping off point, and combined with the challenging economic landscape over the past several years we can begin to understand the precarious financial situation unfolding.

Student Loan Holders Took on More Debt During the Pandemic

Based on data analysis we reported on in “Consumer Finances, Student Loans and Debt Repayment in 2023”, the trend for student loan holders who deferred their payments from 2020-2022 was to take on more debt. Data showed that the total average debt of a consumer with student loans increased 14.6% from 2020 to 2022, while that of consumers without student loans decreased 4.8%.

In 2022, student loan holders increased their average number of open trade lines by 10.3% from 2020, while open trade lines decreased by 7.7% for non-student loan holders. Breaking it down, those with student loans added credit cards (up 8%), personal loans (up 4%) and personal installment loans (up 5%) to their debt balances, with the average total balance of other loans more than doubling from 2020-2022, from $2,078 to $4,747, a 128% increase. 

Economic Stressors Have Persisted, Are Likely to Continue

While inflation has cooled significantly compared to the highs of 2021 and 2022, prices remain elevated and interest rates haven’t returned to pre-pandemic levels. Uncoincidentally, household debt and credit card balances have been on a steady upward climb for the past few years, suggesting that rather than catching up with their finances, many Americans have continued to find new sources of funds to support their lives. 

Americans’ total credit card balance was $1.2 trillion as of Q4 2024, marking the 10th time in 11 quarters where credit card debt increased or stayed the same. In a bigger picture view, credit card balances have risen by $441 billion since Q1 2021—adding up to a 57% increase in less than four years. Given the still-high interest rates, stubborn inflation (that may or may not go back up due to tariffs) and other turbulent economic factors, these balances are likely to keep climbing.

A Perfect Storm of Financial Challenges for Student Loan Holders

While deferred payments on student loans granted a temporary reprieve for borrowers, the new debt accrued effectively negated the gains of deferral, leaving many student loan holders with monthly debt obligations that were only manageable without having to pay back student loans. The CFPB reported that as of September 2022, 46% of student loan borrowers had scheduled monthly payments for all credit products (excluding student loans and mortgages) that increased 10% or more relative to the start of the pandemic.

Monthly financial obligations directly impact a consumer’s overall financial flexibility, and maxing out budgets to keep up with the economy puts people in a precarious situation when demands on finances change. That’s what we’re seeing now—consumers put student loans on the backburner and weren’t able to financially prepare for when they would come due again. 

What Happens Next?

The outlook isn’t great: financially at-risk consumers with student loans will either go into collections for their student loans or will start missing payments on other loans in an attempt to pay back student loan debt. When there is only so much in the bank to work with and the cost of accessing new money is high, consumers will have to prioritize financial obligations and inevitably won’t be able to cover them all.

As we’ve learned from working with more than 40 million consumers in debt, empathy goes a long way, and understanding your customers’ financial situation is the first step to effectively engaging them in debt collection. For creditors and debt collectors looking to engage consumers in debt collection right now, it’s important to have a comprehensive, omnichannel communication strategy and be ready to meet the customer when and where they are ready to prioritize your account. This means don’t limit communication channels and do offer flexible options for repayment that consumers can explore, evaluate and select on their own time. 

To engage your customers earlier in delinquency before charge off, consider leveraging consumer-preferred digital channels and AI-enabled decisioning for optimal results. Implementing a SaaS tool to automate digital communications will help you keep up with rising delinquencies while keeping your costs low.

For more data analysis insights on this topic and how to improve engagement with borrowers with student loans, download and read the full report “Consumer Finances, Student Loans and Debt Repayment in 2023”.

TrueAccord Accelerates Growth with Acquisition of Sentry Credit

By on May 7th, 2025 in Company News

Today TrueAccord Corp. (TrueAccord), a digital-first debt collection agency that is reinventing the collections experience with the use of machine learning technology to help customers resolve their debts, announced it has acquired Sentry Credit, Inc. (Sentry). Through this strategic acquisition, TrueAccord continues to accelerate its industry-leading growth with an expanded client portfolio and the addition of Sentry’s first-party collection and litigation services. 

Sentry is a debt collection agency based in Everett, WA that has delivered both top tier recovery results and exceptional customer service for more than 30 years. TrueAccord and Sentry share the goal of breaking the mold by providing a personalized and empathetic approach for consumers in debt. TrueAccord has been delivering on its mission since 2013, having served more than 40 million consumers in debt with a more humane collection experience while delivering unmatched liquidation rates as the leader in digital-first collections for the Buy Now Pay Later, fintech, telecommunications and credit union industries, among others.

Sentry will continue to service its clients with the same commitment and excellence they’ve come to expect. Over time, Sentry clients will also benefit from TrueAccord’s industry-leading digital capabilities, unlocking new efficiencies and enhancing the client and consumer experience. 

“The integration of Sentry into our ecosystem supports TrueAccord’s continued growth, expands our service offerings, and enhances our ability to deliver a better debt collection experience to even more consumers,” said Mark Ravanesi, CEO of TrueAccord. “Bringing our digital-first strategy to Sentry’s expansive client portfolio will further expand our footprint and leverage TrueAccord’s advanced data and technology capabilities to improve outcomes for clients while positively impacting the financial lives of millions more U.S. consumers.”

As the debt collection landscape has evolved and modernized, TrueAccord has grown by leading the industry on technology innovation and helping to guide consumer-friendly regulatory developments, becoming uniquely positioned to acquire and seamlessly integrate traditional debt collection agencies onto its digital platform. The acquisition of Sentry underscores TrueAccord’s commitment to reinventing the collection industry in a way that delivers outstanding results while recognizing consumers’ individual needs and preferences throughout the financial lifecycle.

Corporate Advisory Solutions (CAS) acted as the buy-side M&A advisor and Troutman Pepper Locke LLP provided legal advice to TrueAccord in this transaction.

About TrueAccord

A subsidiary of TrueML Technologies, TrueAccord is the trusted industry leader in third-party debt collection, leveraging data science and technology to deliver superior results and a best-in-class consumer experience. Since 2013, TrueAccord has served more than 40 million consumers in debt with a more humane collection experience while delivering unmatched liquidation rates as the leader in digital-first collections for the Buy Now Pay Later, fintech, telecommunications and credit union industries, among others. Visit www.trueaccord.com and follow on LinkedIn to learn more.

TrueAccord’s Katie Neill Appointed to Debt Collection Advisory Committee by California’s DFPI

By on May 5th, 2025 in Company News, Compliance

TrueAccord is proud to announce that Katie Neill, its General Counsel & Chief Compliance Officer, has been appointed to the Debt Collection Advisory Committee of the California Department of Financial Protection and Innovation (DFPI) for the 2025-2027 term.

This board is comprised of seven members who provide feedback to the DFPI for its debt collection licensing program. The diverse group includes a consumer advocate and representatives from the debt collection, debt-buying, third-party collection, and collection law industries. The committee advises the Commissioner on matters related to the debt collection business, including proposed fee schedules and other requirements.

TrueAccord has been previously represented in this group when its founder, Ohad Samet, served on the inaugural Debt Collection Advisory Committee in 2021. As the debt collection industry has evolved to meet consumer needs and technological advancements, the DFPI has focused on better protecting California consumers, promoting responsible innovation, reducing regulatory uncertainty for emerging financial products, and increasing education and outreach to vulnerable groups.

As a leader in digital-first debt collection, TrueAccord is invested in reinventing the industry for technology-enabled and consumer-friendly outreach that fundamentally changes the approach to debt collection. In her role at TrueAccord, Katie is instrumental in shaping the policies and controls necessary to ensure legal and regulatory compliance amidst the innovation that drives business goals.

“It’s an honor to be appointed to the Debt Collection Advisory Committee and have an opportunity to impact the future of consumer finance regulation in California,” said Katie Neill. “I look forward to contributing my expertise in consumer-focused, technology-driven debt collection practices to support the DFPI’s mission of protecting consumers and fostering responsible innovation within the industry.”

About TrueAccord

TrueAccord is the trusted industry leader in third-party debt collection, leveraging data science and technology to deliver superior results and a best-in-class consumer experience. Since 2013, TrueAccord has served more than 40 million consumers in debt with a more humane collection experience while delivering unmatched liquidation rates as the leader in digital-first collections for the Buy Now Pay Later, fintech, telecommunications and credit union industries, among others. Visit www.trueaccord.com and follow on LinkedIn to learn more.

Breaking Down Buzzwords: Understanding Digital Debt Collection Keywords & Terms

By on April 8th, 2025 in Industry Insights

In today’s world, connecting with consumers requires more than just making a phone call or sending a standard email, especially in the realm of debt recovery and collection. Navigating through the various strategies often feels like wading through a sea of acronyms and buzzwords. Terms like AI, machine learning, and data science can quickly become overwhelming or even feel interchangeable, leaving you unsure of what they actually mean and how they affect your business and bottom line.

To help clear up the confusion, we’ve put together a glossary of key terms, definitions, and examples to help you make sense of it all:

  • Artificial Intelligence (AI): AI is a broad field, which refers to the use of technologies to build machines and computers that have the ability to mimic cognitive functions associated with human intelligence.
  • Big Data: This term means larger, more complex data sets. Big data can save collectors a lot of time by using many variables for analytics-based customer segmentation, insert, insert.
  • Champion/Challenger: This model of A/B testing is a method for comparing the performance of a current strategy, agency, or software (the champion) to an alternative solution in the same category (the challenger), often used in debt collection to evaluate two agencies or service providers.
  • Dark Patterns: A dark pattern (also known as a “deceptive design pattern”) is a user interface or flow that has been crafted to trick users into doing things. Although dark patterns are often considered to be intentionally deceptive, poor design can inadvertently result in an unintended dark pattern.
  • Data Science: ‍A cross-discipline combination of computer science, statistics, modeling, and AI that focuses on utilizing as much as it can from data-rich environments. Data science (which includes machine learning and AI) requires massive amounts of data from various sources (customer features such as debt information or engagement activity) in order to build the models to make intelligent business decisions.
  • Data Mining: Data mining describes the process whereby you dig through data to discover hidden connections and patterns, and then use this data to predict future trends. Most often it uses a combination of machine learning and artificial intelligence and is very much related to Big Data.
  • Digital Engagement Metrics: A range of key performance indicators (KPIs) that capture how effectively digital channels are reaching and engaging consumers.
  • Digital Opt-In: The percentage of users who have indicated their preference to receive digital communications in a particular channel.
  • Digital Opt-Out: Percentage of users who have requested to be removed from a specific communication channel or all lists owned by the sender. Opt-out requests can be relayed through a variety of words or phrases beyond the standard “STOP.”
  • Domain Reputation: Domain reputation is the opinion receivers—including mailbox providers, ESPs, and other service providers—have of your domain, which helps them decide if your emails should make it to a recipient’s inbox instead of being rejected or ending up in a spam folder. Domain reputation is a key factor for email deliverability rates.
  • Email Deliverability Rate: Deliverability, or inboxing rate, divides how many emails reach the recipient’s inbox, as opposed to their spam folder, by the total number of emails sent. Your deliverability is influenced by a variety of fluctuating factors, including Internet Service Providers (ISPs).
  • Email Delivery Rate: Email Delivery Rate refers to the successful transmission of an email from the sender to the recipient’s mail server. It is the measurement of emails delivered divided by the number of emails sent. Bounces (when an email gets rejected by the mail server for any reason) and failures will impact this number.
  • ESPs: Email service providers (ESPs) are a service that enables businesses to send emails and email campaigns to a list of subscribers.
  • Generative AI: AI that creates new content. (Images, Text, Sound, etc.)
  • ISPs: Internet Service Providers (ISPs) provide internet. Although ISPs can provide email services, separate ESPs are often used for business email operations—but ISPs play a major role in email delivery and landing in the recipient’s inbox.
  • Machine Learning (ML): Machine learning is a subset of AI that automatically enables a machine or system to learn and improve from experience. Instead of explicit programming, machine learning uses algorithms to analyze large amounts of data, learn from the insights, and then make informed decisions.
  • Mailbox Provider: A mailbox provider provides email hosting and implements email servers to send, receive, accept, and store email for the recipient.
  • Mail Server: A mail server (also known as a mail transfer agent or MTA) is an application that receives incoming email from the sender and forwards outgoing messages for delivery to the recipient.
  • MMS: An acronym that stands for Multimedia Messaging Service, similar to SMS, that allows for multimedia content like images, videos, and audio, along with longer text messages.
  • Multi-channel: Multi-channel communication refers to the use of multiple, separate communication channels to reach a consumer—such as email, text messages, phone calls, letters, or even self-service portals—but each channel operates independently from the others, and there is little to no integration between them.
  • Omnichannel: Omnichannel communication goes a step further than multi-channel communications by integrating all available channels to create a unified engagement strategy. Whether the debtor is engaging with a text message, phone call, email, or self-service portal, the consumer’s journey flows smoothly across these channels.
  • Open Rate, Click-Through Rate: The percentage of users who are actually opening and clicking digital communications.
  • Predictive Analytics: Predicting outcomes is one specific application of machine learning. It allows companies to predict which accounts are more likely to pay sooner and allows them to better plan operations accordingly.
  • SaaS: Software as a Service (SaaS) is a cloud based technology that uses the internet to deliver an application which is owned, managed and developed by an external party. Normally run on a subscription basis, the software is usually not installed on the user’s device.
  • Scalability: In debt collection, scalability is the ability to handle more debt and customers while maintaining efficiency and cost-effectiveness of the operation, often involving or determined by the utilization of employees or third-party agencies, the application of different software, optimizing processes, and adopting new technologies.
  • Self-Serve: A self-service or self-serve portal is a secure online platform or application designed to empower consumers to make payments and, ideally, allow them to manage their accounts and payment terms independently.
  • SMS: An acronym that stands for “Short Message Service” referring to text messages on cellular devices, a key channel for today’s debt collection communication and consumer engagement strategies.
  • Tech Debt: Often tech debt refers to the unnecessary reworking or refactoring of code, design, or implementation due to prioritizing speed over quality of work.

For more information on how to get started integrating innovative technologies into your debt recovery strategy, schedule a consultation today»»

Keeping Up with Compliance in a Patchwork of Regulations

By on March 19th, 2025 in Compliance, Industry Insights

Debt collection is a complex, evolving industry, and compliance with the myriad of federal, state, and local laws is an ongoing challenge for organizations in the field. These laws create a “patchwork” of rules and regulations that can vary widely depending on the jurisdiction, presenting challenges for those trying to maintain compliance and provide effective, consumer-friendly services.

Layers of Laws and a Patchwork of Regulations: Federal, State, Local

The complexity of debt collection laws begins with the different layers of laws and regulations that businesses must adhere to. At the federal level, there are laws such as the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA), and agencies like the Consumer Financial Protection Bureau (CFPB) and the Federal Communications Commission (FCC) issue important rules and guidelines that debt collectors must follow. These federal laws and rules provide a broad framework, but when you layer on state and local laws and regulations, designing compliance with multiple competing frameworks becomes more complicated.

For example, no consumer privacy law currently exists at the federal level, however, many states do have consumer privacy laws that provide consumers with the right to know what information is being collected about them, and the right to request that companies correct and/or delete their data. Some states provide an entity-level exemption to their privacy law (e.g., Colorado, Connecticut, Virginia) if a company is subject to the federal Gramm-Leach-Bliley Act (GLBA); however, other states may scope the exemption differently (e.g., California’s exemption is a data-level exemption, not an entity-level exemption). Depending on how a particular state shapes its laws, businesses and collectors must determine how to approach compliance in a way that harmonizes its policies and practices to comply with a patchwork of state laws governing privacy.

Sometimes, even federal laws create a patchwork of requirements, such as the FCC’s mandate regarding opt-out requests. The FCC has specified that opt-outs must be processed within a “reasonable” period of time not to exceed 10 days; while on the other hand, when it comes to debt collection and the CFPB’s Regulation F, a reasonable time frame for processing opt-outs is not defined, suggesting that opt-outs must be processed immediately. This leaves businesses and agencies with a conundrum—do you follow the more lenient 10-day window and potentially strain consumer relationships if further outreach occurs within that window, or spend the additional resources to ensure immediate opt-outs?

An additional layer of complexity comes from the different federal circuit courts in the United States. With 11 circuits, each containing multiple district courts, a ruling in one district may only be authoritative for that district. However, it may serve as persuasive authority for other jurisdictions. This decentralized legal landscape means that organizations must keep track of rulings that could affect how laws and regulations are interpreted in different regions. Even though not all court rulings carry the same weight across the country, they can still influence how the law evolves, and businesses like TrueAccord must stay informed of these rulings to adjust their practices accordingly.

Turning Compliance Challenges into Opportunities

The patchwork of laws and regulations presents an ongoing challenge, but at TrueAccord, we view this complexity as an opportunity. By staying actively involved in industry trade associations like the American Collectors Association (ACA) and Receivables Management Association International (RMAI), TrueAccord ensures it has a pulse on the latest developments. In addition to being part of these associations, TrueAccord leaders also participate in industry committees, allowing for deeper involvement on specific legal topics shaping the industry.

It’s not just about staying current within the debt collection industry; looking to related industries can also provide a competitive advantage. For example, when the CFPB first came around, it borrowed many of its compliance concepts and requirements from the banking industry, which had been dealing with regulatory compliance for years. By keeping an eye on what’s happening in sister industries, TrueAccord has been able to anticipate changes before they hit the debt collection world and be proactive in its approach.

An example of this proactive approach can be seen with the CAN-SPAM Act and opt-out requirements. While CAN-SPAM does not apply to the sending of debt collection emails, TrueAccord nonetheless looked at CAN-SPAM for best practices when it was designing its compliance policies around sending debt collection emails. Because of this, TrueAccord had adopted the policy of adding an opt-out to all outgoing debt collection emails before it was a requirement of Regulation F. When Regulation F mandated it, TrueAccord was already in compliance.

Be Prepared to Stay Ahead of the Compliance Curve with the Right Collections Partner

For businesses evaluating debt collection agencies, it is imperative to ask critical questions about how those agencies stay up to date on legal and regulatory changes. How do they manage change? How do they stay informed about new rules and updates? The answers to these questions will give businesses insight into how well a debt collection agency is equipped to navigate an ever-evolving compliance environment.

As we’ve seen, the patchwork of debt collection laws—spanning federal, state, and local jurisdictions—presents an ongoing challenge for businesses. However, TrueAccord’s commitment to staying ahead of the game through active participation in industry associations, tracking legal rulings and regulatory updates, and applying a holistic compliance management system ensures that we remain at the forefront of industry trends, laws, and regulations. By continuously adapting to changes and leveraging insights from across industries, TrueAccord not only stays compliant but also advocates for a more cohesive, forward-thinking regulatory environment. For businesses evaluating debt collection agencies, understanding how those agencies manage compliance and change is a key factor in choosing the right partner.

Ready to partner with an industry-leader in compliant digital-first debt collection? Schedule a consultation today!

Balancing Compliance and Consumer Experience in Digital Debt Collection: Best Practices to Navigate the 2025 Landscape

By on March 4th, 2025 in Compliance, Customer Experience, Industry Insights, Product and Technology, User Experience

Over the past several years, federal and state regulators have started raising red flags about a significant trend in the debt collection industry: companies failing to deliver positive experiences for consumers or properly manage complaints and disputes. With growing scrutiny from agencies like the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), and even the White House, it’s clear that ensuring a good consumer experience is no longer just a best practice—it’s a compliance requirement.

As we move further into 2025, it’s essential for debt collectors and businesses to find the balance between adhering to the myriad of regulations while maintaining a smooth and positive consumer experience through the repayment process. And while digital communication channels have become increasingly favored by consumers, mass blast emails and SMS campaigns don’t equal rave reviews or recovery rates.

Add on evolving compliance regulations and the modern debt collection challenges mount. While 2024 saw different governing bodies and providers make progress handing down guidelines and best practices for better consumer experience overall, regulations and legislation is still not always 100% clear on what is and is not acceptable for compliance.

So how can your debt collection strategy keep up with the 2025 compliance and consumer preference landscape? Let’s look at ways to navigate the challenges and increase liquidation rates as a result.

Staying on Top of the Shift Toward a Consumer-Centric Compliance Model

Traditionally, compliance in debt collection focused primarily on following established regulations, such as the Fair Debt Collection Practices Act (FDCPA) and Regulation F. However, recent regulatory actions are increasingly examining how businesses interact with consumers beyond the letter of the law and have emphasized that poor consumer experiences can even trigger legal violations. If a debt collector fails to manage complaints and disputes properly, it could result in potential violations of the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) standards, or even the Dodd-Frank Act.

Even the use of emerging technologies is being scrutinized through the consumer experience lens: the CFPB has highlighted concerns over poorly monitored artificial intelligence (AI) or machine learning, specifically when it comes to consumer interactions. A poorly designed or maintained automated messaging system can lead to consumers getting “stuck” in automated loops, resulting in complaints and potential regulatory scrutiny or even rise to the level of a compliance issue.

Another area of increasing consumer frustration can be the process of opting out from receiving further digital communications. Automated messages that give consumers the ability to remove themselves from receiving further communications by replying “STOP” but do not account for a range of possible opt-out requests or replies can lead to complaints and trigger regulatory action.

The lesson is clear: compliance is not just about ticking boxes—it’s about delivering a consumer experience that’s transparent, responsive, and respectful. And with a smart approach, businesses can use technology to minimize compliance risk while enhancing the consumer experience.

Best Practices to Strike Balance Between Compliance and Consumer Experience

Understanding this focus shift and the nuances of ever-unfolding regulations still leaves us with the original question: how can your debt collection strategy keep up with the 2025 compliance and consumer preference landscape? While it is imperative to follow all laws and requirements in the collections industry, following the best practices below can help your organization prepare and provide the best consumer experience through the delinquency lifecycle as the regulatory landscape continues to evolve:

  • Implement robust compliance oversight programs, particularly when scaling digital outreach efforts
  • Establish clear policies and procedures around the use of AI, machine learning, and other emerging technologies in debt collection and digital communication, and continuously assess their impact
  • Map and monitor outreach across all communication channels holistically, ensuring that consumers do not get “stuck” in a loop or experience any disruption in their communication
  • Ensure any messaging systems appropriately handle variations in opt-out requests (like we mentioned above, “STOP” is just one way consumers might convey their opt out of SMS)
  • Automation can be used not only to send messages but also to ensure that every piece of communication complies with the necessary regulations
  • Partner with debt collection agencies that have experience successfully using digital communications compliantly

The key is to adopt a comprehensive approach that blends technology, consumer insights, and compliance best practices. By leveraging digital tools to monitor communications, mapping out consumer journeys, and staying vigilant with AI and machine learning systems, businesses can maintain compliance without sacrificing the quality of the consumer experience.

And TrueAccord has a proven track record as an industry leader in digital-first debt collection from both a compliance and consumer experience perspective.

The TrueAccord Difference

To start, TrueAccord is a licensed, bonded, and insured collection agency in all jurisdictions where we collect. We ensure compliance control, auditability, and real-time updates for changing rules and regulations, as well as adapting to shifting trends in consumer preference and behavior.

Our digital collections compliance process is controlled by code, ensuring that all regulatory requirements are met, while still being flexible to quickly adjust to new rules, case law, and consumer experience expectations.

Take the example from earlier about consumer frustration trying to opt-out: at TrueAccord, we’ve found that only 7% of consumers use the word “STOP” to opt out of SMS communications—but our team and machine learning engine, HeartBeat, account for the many other phrases consumers may use to opt-out, staying compliant and reducing consumer friction.

It’s important to remember that most compliance rules were written for the benefit of consumers. As we’ve seen from today’s consumer-centric compliance guidelines, the better we comply, the better the consumer’s experience should be.

Ready to partner with an industry-leader in compliant digital-first debt collection? Schedule a consultation today!

Using Letters in Omnichannel Debt Collection—Keeping Up with Compliance

By on February 18th, 2025 in Compliance, Customer Experience, Industry Insights, Machine Learning, Product and Technology, User Experience

Direct mail is the old-school method for reaching consumers regarding their debt, but over time several factors have reduced the effectiveness of letters in collection communications—consumer preference and cost being the most prevalent. But specific state compliance regulations and other use cases prove that “snail mail” still has its place in the omnichannel mix.

When are Letters Necessary in Collection Communications?

While the cost of physically mailing letters may be a deterrent to snail mail, businesses benefit when direct mail is used to meet compliance requirements. We’ll go into more detail around regulations in the next section.

Another benefit of mailing letters is most apparent when the delinquent account does not have a valid email address or phone number on file. Letters ensure that these individuals still receive crucial notifications regarding their accounts, preventing any potential oversight, and provide essential information related to their debt in a clear and organized manner.

Additionally, the formality of letters can be necessary to help raise awareness of outstanding debt for consumers that may not be as trusting of digital communications and choose to ignore phone calls. This is especially true for those who may not be as computer savvy or familiar with online financial transactions.

And just like with all other communication channels in debt collection, consumer preference also plays a role but in an even greater way with traditional letters: if a consumer clearly states that they only want to be contacted through physical mail (either to them directly or to their legal representation), businesses and collectors must abide. These types of requests lead to the main use case for letters…

The Main Use Case for Snail Mail: Compliance

The primary use case for using the direct mail channel is for compliance. Several laws, regulations, and governing bodies—including the Fair Debt Collection Practices Act (FDCPA), Regulation F, Consumer Financial Protection Bureau (CFPB), among others—define how, when, and what needs to be included in consumer communications around debt collection, and letters were the original initial compliant consumer communication.

Yet the prevalence of digital has forced these regulations to evolve, and today there is no federal law requiring consent to communicate via email vs direct mail.

But there are some exceptions to this general rule:

  • Some states/jurisdictions require consent to communicate via email and text, which must be obtained through physical letters and documentation.
  • In some instances, consent to send legally required notices electronically must also be obtained through physical mail.
  • Some states require certain legally required notices to be mailed.

See Success and Real World Results with TrueAccord

Understanding the nuances of compliance and when communications fall under certain laws can be challenging without legal experts keeping a finger on the pulse of these evolving regulations—but TrueAccord ensures success with code-based compliance so all our engagement channels meet the requirements for each unique account’s circumstance and know when letters are the right choice for outreach.

While our omnichannel strategy is digital-first, we understand that digital isn’t always the best or most viable option to connect with some consumers. Knowing when, where, and why a letter might be the ideal choice for consumer communication helps TrueAccord and our clients remain compliant and cost-effective. Depending on a consumer’s location and contact information, a letter may be the best bet to garner engagement.

With advanced code-based compliance and scrubbing capabilities, TrueAccord’s omnichannel approach proves even snail mail can still be effective in collections.

Want to know more about how the omnichannel approach and how each channel influences the effectiveness of a business’s overall collection strategy? Download our new eBook, Omnichannel Communication in Debt Collection: An In-Depth Look at Advanced Engagement Strategy by Channel now»»

Legal & Compliance Webinar Recap: Key 2024 Takeaways That Impact the Collections Industry in 2025

By on February 11th, 2025 in Industry Insights

Keeping up with compliance in the debt collection industry can be a challenge—especially as artificial intelligence, machine learning, and other advanced technologies sweep through both the business and consumer sectors. In a webinar on January 29, 2025, industry experts Kelly Knepper-Stevens, TrueML Chief Legal Officer; Katie Neill, TrueAccord General Counsel and Chief Compliance Officer; and Lauren Valenzuela, Retain by TrueML Products General Counsel and Chief Compliance Officer, shared insights from 2024 and influences on 2025.

Let’s take a look at the takeaways from the webinar:

Compliance & Regulatory News in 2024

One significant trend coming out of the regulations and consent orders in 2024 was focused around companies’ failure to deliver a positive experience for consumers, with federal and state regulatory action against companies who fail to properly manage complaints and disputes. The White House, Consumer Financial Protection Bureau (CFPB), and Federal Trade Commission (FTC) all shared concerns that poor customer experiences may rise to the level of illegality.

October 2024 saw the opening of the CFPB’s nonbank registry, aiming to create a single database of any nonbank entity that’s received a consent order by requiring these entities to register when they have become subject to certain final public orders imposing obligations on them based on alleged violations of specified consumer-protection laws.

The Department of Justice (DOJ) revised their Evaluation of Corporate Compliance Programs​ to include new areas of focus like technology risk, merger and acquisition integration, and additional questions related to autonomy and resource allocation and anti-retaliation programs. It places significant emphasis on the need for companies to implement structured processes to assess and manage risks tied to AI and other emerging technologies. These updates underscore the need for organizations and individuals subject to compliance measures to have a competency level when it comes to artificial intelligence and all of the various tools and solutions that may be used or inadvertently used through vendors.

Additionally, last year email service providers began to roll out their own requirements, like Google’s one-click unsubscribe in June 2024, which may negatively impact email sender reputation if not adhered to. While this is not the law, not following this requirement can lead to business emails missing the inbox and landing in spam instead—a major risk for deliverability and consumer engagement.

Another digital channel got an update to best practices beyond direct Fair Debt Collection Practices Act (FDCPA) or Regulation F guidelines as well: the Federal Communications Commission (FCC) published an order in February 2024 requiring companies using an automatic telephone dialing system (ATDS) for text messages to honor opt-outs within 10 business days of receipt. Currently the FDCPA doesn’t outline any type of processing time to opt-outs, but the FCC order does provide a new standard for industry best practices.

What Do These Compliance & Regulatory Updates Mean for 2025?

A key takeaway from all the many updates and introductions in 2024 is that not only should organizations make sure they are compliant with the law, but also look at the quality of the consumer’s experience as companies evaluate their compliance programs.

And while last year saw different governing bodies and providers make a lot of progress handing down guidelines and best practices for better consumer experience overall, our experts expect the next wave of successful new regulations to come from the states versus the federal legislation.

That said, a particular proposal from 2021 has been reintroduced on the federal level, but is not expected to pass out of the House Financial Services Committee—which is a good thing for consumers and collectors alike when it comes to digital communications. Rep. Maxine Waters’ proposed debt collection legislation covers many articles, but the concerning portion focuses on introducing a nationwide prohibition from debt collectors reaching out to consumers by email and text message without the consumer’s consent first, which is ultimately a ban on those channels because it’s difficult to get a consumer on the phone to get them to opt in to those channels or to get them to respond to a letter. While it is not expected to pass, it is a prime example of the misunderstandings around these technologies and emphasizes the need to educate and advocate for digital adoption because consumers largely prefer these sorts of methods.

Overall, businesses and collectors need to strike a balance in 2025 between maintaining compliance while also keeping up with consumers’ more digital preferences despite regulations and legislation not always being 100% clear on what is and is not acceptable for compliance.

With that, one of the biggest opportunities and challenges for organizations and collectors in 2025 will be how to vet, adopt, and ensure compliance with exciting emerging technologies.

Emerging Technologies: Benefits, Risks, and Looking Ahead at 2025

Think about ways that you can use technology to help you work smarter, better, faster, but also where pitfalls might be with that technology—this is the mantra moving forward.

With technology getting smarter, especially for the digital communication landscape, it’s significantly less expensive to send emails and SMS than it is to mail letters or place phone calls. It’s safe to say that if your organization is already utilizing digital channels, you will probably send more communications through those channels in 2025, which could expose some of the greater compliance risks in the new year without the right compliance programs and strategies in place.

While consumer preferences consistently lean more towards digital, not all digital engagement is created equal—and poor consumer experience can be the result of poorly designed, implemented, or maintained digital outreach. And as noted above, a significant focus for staying compliant in 2025 hinges on consumer experience. In 2024, the CFPB identified one of their concerns over utilizing technology like AI is a lack of oversight, or even understanding of how to properly use it in consumer communications.

There hasn’t been any federal laws yet regarding the AI in debt collection, but federal agencies have put out significant guidance on using these advanced technologies and what sort of protections businesses need to have in place over them. The Department of Treasury is very interested in how organizations are using the AI technologies with several large sessions bringing in industry members and government regulators to talk about the risks and the benefits and what sort of controls would be best to put in place.

While legislation and explicit regulations may still be in the works on a federal level, businesses should start to prepare now to find both higher chances for success and compliance in 2025.

In a webinar poll, we found that when asked “Do you allow your employees to use LLMs like ChatGPT or Deep Seek?” attendees responded that 70% said a flat no, followed by 17% saying a straight yes, 3% unknown, and only 10% yes after they are vetted by info-sec and legal teams—we expect that 10% to grow exponentially further into the year as AI technologies become not only more prevalent and more accessible, but also more scrutinized on a business-level.

One key directive any business should take away: start writing policies and procedures about this, including putting these sorts of things into your risk assessment annually, at least to be assessing whether or not this is bringing more risk than you want to your organizations.

While using these emerging technologies does open organizations up to a new set of risks—both in compliance and overall consumer experience—using digital avenues for outbound communications can similarly be used for how your business manages compliance oversight of your processes. If you’re leveraging an omnichannel engagement strategy, it can be default to view each channel in isolation, but there are compliance solutions that help map out and monitor your outreach across channels. It is crucial for the positive consumer experience—and in turn, compliance—to make sure consumers aren’t getting stuck anywhere in your engagement process, to make sure your responses to your outbound digital communications are being scanned for different keywords and phraseology, just to name a few of the modern compliance elements.

Can Your Business Future-Proof Its Compliance Program?

As we saw in 2024, compliance and best practices can change rapidly but can also lag behind emerging technologies. Some of the best ways to future-proof your compliance strategy is to pull insights from the recent past, and 2025 has plenty to draw from.

But one way to take some of the pressure off internal teams trying to keep up with compliance is by partnering with industry experts with a proven track record of being ahead of the curve—and in TrueAccord’s case, even helping influence them. Our perspective since our company’s inception in 2013 has been that legal compliance is at the forefront of understanding the future of the collections industry and what it means to prioritize consumers.

TrueAccord is a licensed, bonded, and insured collection agency in all jurisdictions where we collect. Our legal team follows developments in regulations and case law to develop policies and procedures according to their constant changes. We ensure complete compliance control, auditability and real-time updates for changing rules and regulations. Our digital collections process is controlled by code, ensuring that all regulatory requirements are met, while still being flexible to quickly adjust to new rules and case law.

Ready to partner with an industry-leader in compliant digital-first debt collection? Schedule a consultation today!

Using Calling in Omnichannel Debt Collection—Don’t Hang Up the Phones Just Yet

By on February 6th, 2025 in Industry Insights

With consumer preferences leaning more and more towards digital communications, it can be easy to consider call centers for debt collection as a thing of the past. In fact, the first prediction of call center demise came in the year 2000 “Death of the Call Center”—but don’t completely cross off calling to recoup delinquent funds.

Phone calls serve a valuable purpose in a fully omnichannel approach, in more ways than you may think…

The Differences Between Outbound vs Inbound Calling—And Why Both Are Crucial in Debt Collection

If your call center agents are only dialing out to reach delinquent consumers, you are missing out on opportunities to answer the phone for consumers ready to talk. Known as outbound vs inbound calling, both functions are vital components to a comprehensive omnichannel strategy.

So what’s the difference between outbound vs inbound calling?

  • OUTBOUND: Call center agents dial out directly to consumers
  • INBOUND: Call center agents answer incoming calls made by consumers

Whether agents are dialing out or answering the phones, calling has been a cornerstone of debt collection communications for decades, and its primary objective remains the same: recover owed money, negotiate and resolve issues, and arrange commitment for repayment plans.

Even when consumers are conducting more and more financial transactions online, phones still have specific use cases businesses can’t afford to ignore when collecting debts.

Use Cases and TrueAccord Success Stories

Calling as part of the debt collection communication mix may be considered the old-school method, but its use cases remain relevant today:

  • Lack of email or digital contact information
  • Acquiring consent for digital communications where required
  • Reaching consumers unresponsive to digital outreach
  • Follow up on failed or missed payments

And there are important use cases on the flipside of the phone line too. Allowing consumers to initiate contact through inbound calling can create a more accessible and manageable situation for consumers to negotiate repayment plans, particularly for those dealing with complex issues or disputes.

At TrueAccord we are digital-first, but not digital-only. By providing phones as an active channel for engagement, we are able to reach consumers who may otherwise slip through the cracks of digital communication and support a wider range of consumers, empowering them to resolve their financial obligations effectively and recover delinquent funds more efficiently.

“Thank you for working with me. TrueAccord is an amazing agency. Very flexible—just give them a call.” – Real consumer feedback

Want to know more about how the omnichannel approach and how each channel influences the effectiveness of a business’s overall collection strategy? Download our new eBook, Omnichannel Communication in Debt Collection: An In-Depth Look at Advanced Engagement Strategy by Channel now»»

Using SMS in Omnichannel Debt Collection—Digital Strategy Beyond Email

By on January 27th, 2025 in Customer Experience, Product and Technology, User Experience

For consumer engagement in debt collection, many organizations and agencies have moved away from outbound calling—but don’t discount reaching out to consumers’ phones just yet! Text messaging (referred to as SMS or short message service) is becoming a favored method for consumers to receive business communications.

It’s common knowledge these days that people tend to ignore phone calls from unknown numbers and often throw away physical letters without opening them, but they will also delete unfamiliar emails without reading them, too.

So if your digital communication strategy only includes email, consider this: consumers are nearly twice as likely (1.8x) to prefer texting to any other communication method. Gartner reports SMS open and response rates as high as 98% and 45%, respectively, compared to corresponding figures of 20% and 6% for email.

For successful debt collection operations, adding SMS into the digital mix to build an omnichannel approach (along with email, calling, letters, and self-serve options) boosts engagement and liquidation rates.

Why is SMS Critical in Collection Communications?

SMS allows creditors, debt collectors, and financial institutions to communicate with individuals in a brief and direct manner, more so than traditional methods such as letters or phone calls—or even email. SMS is a powerful tool for debt collectors looking to engage with consumers who might otherwise avoid other forms of communication. These messages can serve a variety of purposes, from notifying debtors of outstanding payments to reminding them of upcoming due dates or offering payment plan arrangements.

SMS offers several practical advantages for both debt collectors and consumers. The concise nature of SMS—limited to 160 characters—forces communication to be direct and to the point, ensuring that messages are clear and easy to understand. Consumers who may feel overwhelmed by lengthy phone conversations or complex emails often appreciate this streamlined approach.

Surveys have found that 85% of consumers state that they prefer to receive an SMS instead of an email or phone call and more than 55% said they prefer text messaging because it’s immediate, convenient, and allows them to quickly get updates—and that’s just the beginning of consumer preference statistics surrounding SMS communication:

  • 65% want their accounts, billing, and payment reminders sent to them as a text
  • 89% say they prefer texting with businesses over any other mode of communication
  • 97% of companies that have launched texting initiatives say those initiatives help them communicate with consumers more efficiently

And studies of overall communications from businesses show that consumers are 134% more likely to respond to a text than an email.

Use Cases and TrueAccord Success Stories

According to the Pew Research Center, 97% of Americans own a cell phone, and nearly the same percentage sends at least one text message each day, making SMS an already well-established communication method most consumers are familiar and comfortable with. By using SMS to reach out to delinquent consumers, debt collectors tap into a channel that’s not only widely accessible but also highly effective in terms of response and engagement. With its speed, convenience, and familiarity, expanding digital strategies to include SMS is critical for consumer preference.

Along with this preference and the corresponding better engagement rates, compliance is one strong case for using SMS in consumer engagement for collections. The implementation of Regulation F by the Consumer Financial Protection Bureau (CFPB) has helped modernize the Fair Debt Collection Practices Act (FDCPA) by focusing on electronic communications and giving guidance on how to properly use SMS as a channel.

SMS provides consumers with links directly to account portals where consumers can get more information, pay, dispute, etc. at a time that is convenient for them and without having to talk to an agent.

“This is my first time paying off a debt collection online by just receiving a text. I just received a text from the debt collector and I made a payment arrangement just by a few clicks. This way is just so much better and easier.” – Real feedback from consumer working with TrueAccord

Positive consumer feedback is just one part of the TrueAccord difference for this channel. TrueAccord goes beyond just adding SMS into the mix—our team digs deeper to ensure the best possible engagement in this channel. Similar to email deliverability, TrueAccord teams track SMS reachability, or the likelihood that a text message sent by a business actually reaches the intended recipient’s mobile device.

And just like with every approach in our omnichannel strategy, our machine learning decision engine, HeartBeat, guides optimal communication with the right message, right time, and right channel. From reminders to direct calls-to-action, SMS offers many benefits for both consumers and businesses thanks to the speed, convenience, and higher engagement rates towards debt resolution.

Want to know more about how the omnichannel approach and how each channel influences the effectiveness of a business’s overall collection strategy? Download our new eBook, Omnichannel Communication in Debt Collection: An In-Depth Look at Advanced Engagement Strategy by Channel now»»