Category: Compliance

How TrueAccord Creates High Performing Compliant Content

By on July 31st, 2018 in Compliance, Data Science, Product and Technology, User Experience
TrueAccord Blog

In debt collection, the language one uses in customer communications makes a big difference on liquidation rates. At TrueAccord, compliant content is the lifeline of our system. We continuously create, test and revise our content to engage consumers more personably—which drives better results for our clients.

Our Goal: Create a Better Customer Experience

Communication styles in the debt collection industry are typically stiff and unapproachable. Most of the time, it sounds like “legalese,” which can be off-putting, if not intimidating, to many customers. TrueAccord has a digital-first strategy to debt collection, primarily with emails, supplemented by SMS and phone calls to effectively engage with our customers. We strive to make our content informative, actionable, and compassionate.

Our mission is to transform the debt collection industry by helping people regain their financial health. Thus, our content is written to reflect that. It’s not accusatory or condescending, but respectful and empowering. We focus on finding solutions and helping people by presenting options on how to resolve their debt.

How We Experiment with Content —and Continually Improve It

Our proprietary content management system (CMS) was designed to help us craft and edit content based on massive amounts of dynamic data. We track everything from the customer’s balance, creditor, where they are in the debt lifecycle, if they’re in a payment plan, and how long we’ve been communicating with them to craft customized emails.

We constantly run experiments to generate the right content for each person. We try new subject lines to see if we can get more people to open emails. We write different calls to action on our buttons to see what drives better engagement. We also consider how far a consumer has to scroll down in an email or a landing page to get to the call-to-action button. If something’s not working well, we try something else. And our machine-learning engine—which continuously learns from our experiences—helps us customize specific and customer follow-ups that resonate. All of these small experiments add up to get us very high open and click rates from customers.

How We Keep Content Compliant

The debt collection industry is heavily regulated and is inherently protective of consumers, as it should be. We always look at communications content through a customer-focused and thorough compliance lens.

Our system provides code-driven compliance, appending the appropriate disclosures and text to automatically comply with whatever is necessary for each user, such as debts unreported out of statute or specific state disclosures. Our compliance rules dictate the content parameters for each customer, making it easier for our content writers to focus on writing compelling content. And yet, because there is wide variation in our writing styles, syntax and payment options, our content is still engaging.

Our legal team gives our content a final review, and we get very granular to ensure the message is clear for every type of customer. We look at the actual message, the email layout and design (including button placement) and even the size of the font for our disclosures. We write content that engages customers but also clearly lays out the customer’s rights and responsibilities.

This process is highly collaborative. Our content and legal teams work in concert to continuously adapt new scenarios to see how different options might come across. Our communications library constantly evolves as we keep on improving our customer engagement.

Think About What You Can Say

Most of the industry is focused on what you can’t say, but they’re not thinking about what you can say. That’s why we spend so much time perfecting our content and why we end up with such great response rates and overall results.

The Intelligent Alternative to Debt Collection Call Centers

By on March 6th, 2018 in Compliance, Debt Collection, Industry Insights, User Experience
TrueAccord Blog

As is often the case in evolving industries, it takes time for technology adoption to begin transforming the way companies do business. For debt collection, many organizations are still relying on an aging and outdated process to pursue debtors and recover revenue – the collection call center. Dozens or even hundreds of collection reps spend their days on the phone lines, methodically and painstakingly pursuing consumers who have racked up debt in the hopes that some will actually pan out.  

Unfortunately, call centers are fraught with challenges that can have a debilitating impact on the collecting organization, the company’s brand and reputation, and the consumers on the other end of the phone, who in many cases truly want to regain control of their financial lives. Among the many problems call centers face:

They’re Reactive and Emotional Environments

When individuals are the driving force behind an emotional transaction like a phone collection call, it’s not hard to have a bad day – especially when reps tend to garner low base salaries and are incented with commissions and bonuses to succeed. If a consumer rudely hangs up on a rep, for example, it’s easy to fall into a retaliatory frame of mind and call back multiple times simply to harass the debtor. Reactive and emotional responses from a rep can lead to bad exposure and higher risk of complaints or even legal action. Even voice analytics systems that monitor language used by reps are not infallible, as reps usually know what trigger words to avoid (such as “garnishment” or “lawsuit”) and how far they can push the envelope and not be flagged.

Even Hiring More Reps Doesn’t Really Scale

Many companies see hiring more reps as a simple solution to get as much coverage as possible. This conventional wisdom looks good on paper, until your realize more reps also means more training, more compensation, more resources and more oversight to monitor every active rep’s calls. Moreover, it is difficult to match staffing needs to varying workflows. If business is brisk and opportunity is high, it makes sense to have more workers. But all companies experience ebbs and flows in business activity, so when it comes time to scale down, they are forced to eliminate call center positions, then scale back up when the demand returns. Such fluxuations create a complex and unsustainable model for smooth debt collection execution.  

Ultimately, It’s All About Risk

Large call centers create the potential for more problem interactions with debtors and a greater probability of complaints and lawsuits, and risks and costs can rise exponentially when you consider how long it takes to manage each incident. Interviewing the violating rep in question, piecing together what happened and facing legal action or an angry regulators all create instability and unpredictability.

Consider Automating Debt Collection – and Making It Smarter

How can you overcome these inherent problems with debt collection call centers? Progressive organizations in the credit card, consumer loan, ecommerce, technology and telecom industries are all turning to a more sensible and intelligent approach to replace the call center strategy: Automation engines that replace most collection activities offer a more proactive system that has compliance, risk mitigation, content and costs all built in.

Here’s what it looks like:

Start with an Intelligent, Machine-learning System

Today’s automated collection systems, like those pioneered by TrueAccord, rely on a process that goes far beyond outbound calls. Combining outbound emails, text messages and other channels with an intelligent machine-learning system that sees what type of interaction each recipient prefers, you create a less obtrusive environment that debtors are more likely to respond to. In most cases, consumers are the ones taking the initiative to call collection reps directly to solve the debt issue, reducing the number of calls you need to make by up to 95 percent and lowering the number of agents you need on staff. And because the TrueAccord platform automatically monitors every call and interaction and uses pre-written and pre-approved content, you’re protected.  

Control and Monitor Your Content

Code-controlled compliance is critical to ensuring that reps are sticking to script and aren’t sending improper content to a consumer. With TrueAccord, compliance is built right into the system. Messaging for emails and other interactions are pre-defined and pre-approved so you don’t have to micromanage every agent’s conversations. The system also makes it very easy to track and measure the effectiveness of your program and allows multiple approvers to oversee and continually improve the process.

Create a Far Better Consumer Experience

Once you begin dealing with consumers on their terms and personalizing the experience for them, you create a more collaborative and cooperative environment – and improve your chances that they’ll remain a customer. Change the nature of the conversation so that’s it’s less adversarial, and you’ll improve customer retention and lock in better recovery rates. There is also less incentive for a rebel rep to push the boundaries because they’ll be working with consumers, not against them.

As the debt collection industry matures, there is a huge opportunity for companies to take a positive step forward, recovering more revenue in less time and changing the nature of their debt collection business along the way.

To hear our CCO and CEO discussing the Perils of Call Centers, check out our podcast.

The Perils of Call Centers

By on February 22nd, 2018 in Compliance, Industry Insights, User Experience
TrueAccord Blog

Call centers are risky: expensive to operate, experience high turnover, training and retraining are increasing overhead, and controlling calls is close to impossible because humans are fallible. In this episode, Tim Collins and Ohad Samet compare and contrast a call center based collection operation with TrueAccord’s compliance management and scale: pre-written content, compliance firewall, and other solutions.

To download the episode’s transcript, click here.

Real issue for debt collectors is the irrelevance of telephones

By on February 6th, 2018 in Compliance, Debt Collection, Industry Insights, User Experience
TrueAccord Blog

Originally posted on American Banker’s BankThink blog.

In the past few years, the debate over limits on financial institutions’ electronic communications with consumers has focused on an outdated device: the telephone.

That is very well how the debate could continue under new leadership at the Federal Communications Commission, as industry supporters will likely urge the FCC to ease up on robo-calling restrictions.

In 2015, the FCC disappointed the financial services industry, which had wanted more flexibility on robo-calling restrictions. The agency’s ruling under the Telephone Consumer Protection Act went further, all but ending debt collectors’ use of robo-calls to cellphones. Then-Commissioner Ajit Pai, who is the new FCC chairman, wrote a scathing dissent. In it, Pai wrote, “The TCPA has become the poster child for lawsuit abuse.”

He is correct. In debt collection, TCPA litigation increased 31.8% from 2015 to 2016 while Fair Debt Collection Practices Act litigation decreased during the same time period. This isn’t surprising. The FDCPA puts a cap on damages while the TCPA does not. Furthermore, the 2015 FCC ruling provided broad and ambiguous definitions with many openings for legal action.

Lawyers have been making a living out of suing and settling with debt collection agencies for a long time – often in a way that can seem abusive. The industry is advocating for Pai to undo a lot of that perceived harm by reducing collectors’ TCPA-related compliance and litigation costs.

But if Mr. Pai loosens the rules on robo-calls, he will hurt consumers by subjecting them to more unwanted calls and also hurt debt collectors and creditors by allowing them to sink back into short-term complacency about their collection methods while the world changes around them.

Phone calls are losing relevance as consumers migrate to communicating with companies over digital channels. Indeed, the tech company Neustar reports that 97% of business calls go unanswered. Yet, some debt collectors are trying to stop regulators from placing limitations on their calling strategies – strategies that are harmful to consumers who don’t even want to communicate by phone.

To be sure, some debt collectors are acknowledging the communication trend.

Take, for instance, Albert Cadena, president and chief operating officer of USCB America. Cadena took the stand at the Consumer Financial Protection Bureau’s field hearing on debt collection in Sacramento, Calif., in July, and said: “Communications is a key thing in our industry. We talk a lot about reaching out: letters, calls. The key thing … is to respond, communicate, talk to the collections agency whether it’s first party or third party.”

Perhaps unwittingly, Cadena was suggesting that communication is not as effective as it could be, and that traditional modes of communication (calls and letters) have become largely ineffective.

His remarks were made the day after the CFPB published its outline for a proposed regulation in debt collection – a document that was more than three years in the making and published a year after the FCC’s broad TCPA ruling. In the bureau’s outline were sections that point to the direction the industry should actually focus in on when communicating with consumers: email and text message.

The Trump administration may defund the CFPB, and the FCC may roll back its TCPA ruling. Debt collectors may hope for simpler compliance requirements and less frequent enforcement actions. However, in terms of the policy around telephone communications, both supporters and detractors of these agencies’ regulatory agenda are debating about a disappearing world. A policy focused on phone calls and written letters is inconsistent with a new generation of borrowers that responds to emails and social media posts. This debate is still focused on the minutiae of the FDCPA, a rule from the 1970s that forbids the use of postcards, while some consumers never set foot in a bank branch or talk to a banker.

Not all industry players are ignoring these realities. Several large issuers and banks have been leading the charge in shifting from call-heavy, to digital-first and consumer-friendly collections. The CFPB’s proposal explicitly calls out email and text messages as technologies for debt collection. The future of the industry lies in adapting to consumer behavior and the fact that consumers are not answering their phones.

Podcast: Creating a Positive Impact in Debt Collection Using Technology and Building Consumer-Centric Experiences

By on January 29th, 2018 in Compliance, Debt Collection, Industry Insights, Machine Learning, Product and Technology

Our CEO, Ohad Samet’s, recorded a podcast with Lend Academy discussing the positive impact technology is creating in the collections space and the need for more innovation. Will discuss TrueAccord’s unique approach to debt collection using data-driven, digital communications to create deeply personalized consumer experiences.  The podcast also covers the current state of the collections industry and where it’s likely headed as regulatory pressure, consumer preferences and compliance requirements converge.  Will cover how TrueAccord is using machine learning to deliver deeply personalized and engaging experiences for consumers while achieving higher recovery rates across various debt types.

Tune in and learn:

  • The state of the debt collection industry today and where it’s headed
  • How the use of machine learning is personalizing the debt collections experience for greater conversions
  • Why code-driven compliance outperforms traditional collections practices by reducing risk to organizations
  • How understanding consumers’ preferences for easy, self-service options with flexibility empowers  more consumers to pay off their debt and get on a path to financial health 

If you’re rather read the transcript, download it here.

Obtaining Consent In Digital Debt Collection

By on December 13th, 2017 in Compliance, Debt Collection, Industry Insights

There are few industries left that are as ripe for disruption as the collections industry is right now. In the case of collections, the old adage of “if ain’t broke don’t fix it” has guided the process for collection agencies for the better part of 40 years. Collectors knew that they could reliably collect on past due accounts by simply sending a letter or two and calling debtors repeatedly until they made contact and then convincing the debtor to pay off the account. Creditors built their customer contracts knowing that the collections model of phone and letter outreach was well established. Today, things are changing and they’re changing fast. Nearly 77% of American consumers own a smartphone. Naturally, consumer preferences on how they want to be communicated with have evolved, and at TrueAccord we’re working hard to stay on top of this trend, while maintaining the highest standard of compliance, and pushing the industry to catch up to the times.

The collections practices set out by the Fair Debt Collection Practices Act (FDCPA) were designed primarily to protect consumers from abusive contact by collectors in person, by phone, and by letter, but gave little thought to new technologies or how they would be used by consumers. It was only last year that the new proposed rules on debt collection were announced by the CFPB referencing new digital communications methods. This announcement has been creating waves for both creditors and debt collectors and now is the time to start thinking about consumer communications preferences and how to leverage new communications tools to contact your customers, even in collections.

The legal standards for how to obtain consent to contact a debtor is outlined in regulations and in basic agency law. In almost all cases consent to contact a consumer transfers to an agency. Most creditors have added to their contracts provisions allowing for consumer contact by mail and phone with some forward thinking creditors including consent language for the creditor to service the account using email or even better, digital communication channels. However, not many contracts underlying a debt that gets placed in collections anticipated a collector wanting to contact a debtor by email or text message.  With new rules coming, now is the time to anticipate this change and create broad consents that incorporate digital channels that currently exist, and that may be created. An example of a broad consent in a contract might look like:

“If we need to contact you to service your account or to collect amounts you owe, you authorize us (and our affiliates, agents, contractors and third party servicers) to contact you at any number you provide, from which you call us, or at which we believe we can reach you, at any email address you provide to us or at which we believe we can reach you, or through any social media or other digital communications platform you may use. We may contact by calling or texting. We may contact you using an automated dialer or prerecorded messages. We may contact you on a mobile, wireless or similar device, even if you are charged for it.”

This clause incorporates phone, email, text, social media, and leaves the door open for new technology like push notices.  Even though there is some uncertainty around the ability to contact consumers using all of these new channels it’s important to think ahead for when the laws catch up to consumer preferences. It’s not uncommon for a consumer to reach out to TrueAccord and ask for us to text them account details and we wouldn’t be surprised if a consumer asked us to contact them using other messaging apps like Whatsapp or Facebook Messenger. With the consent language above a collector could respond to consumer demand and use these channels to contact a consumer in the way they want to be reached. Respecting consumer preferences will open the door to more successful collections opportunities benefiting consumers, collectors, and creditors.

Press Release: Tim Collins Joins TrueAccord as Chief Compliance Officer

By on September 25th, 2017 in Company News, Compliance

TrueAccord, the debt collections technology company, has hired Tim Collins as Chief Compliance Officer. TrueAccord’s platform is powered by machine learning that uses a consumer centric, data-driven approach to help businesses recover more debt online than traditional methods. Collins joins TrueAccord from Convergent Outsourcing, where he was General Counsel and Chief Ethics & Compliance Officer since 2013.  

Collins has more than 25 years of experience in collections, having held leadership roles in legal and compliance at various financial organizations, including Hyundai Capital America where he established a comprehensive compliance system across all areas of the business. In his new role at TrueAccord, Collins will oversee the company’s legal and compliance practices to meet the requirements of the highly regulated debt collections industry.

“Having an industry veteran such as Tim join our team is a testament to the strength of our business and the major clients we represent, as well as our vision for how to transform collections for good,” said Ohad Samet, Chief Executive Officer. “The top 10 banks and lenders who use TrueAccord demand the highest level of compliance. Tim’s deep and relevant expertise will ensure we consistently meet and exceed their expectations.”

“After following TrueAccord for the past few years, I have been intrigued by their unique approach to debt collection, an industry that in my experience is ripe for disruption,” said Tim Collins, Chief Compliance Officer. “With an inspiring vision, a strong product, and an exceptional management team, TrueAccord is well-positioned for accelerated growth and investment. I look forward to contributing to the company’s continued success and to helping shape the future of the collections industry.”

Collins received his JD from the University of Detroit Mercy School of Law, and completed his Bachelor’s Degree in Business Administration at the University of Iowa’s Tippee College of Business. Collins is an adjunct professor at the University of San Diego Law School where he teaches seminars on in-house corporate practice; and he also serves on the Federal Affairs Committee for ACA International, the Association of Credit and Collections Professionals.

About True Accord

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

Industry Expert Says: Phone Calls Are Dying

By on September 12th, 2017 in Compliance, Debt Collection, Industry Insights, Machine Learning

Yesterday, in an article on InsideARM.com, Tim Bauer, the President of InsideARM, described a somber state of affairs:

The TCPA and the 2015 FCC Rules interpreting the act have effectively eliminated the use of technology to efficiently call cell phones. Land line usage is dropping like an anchor. The CFPB is on the brink of announcing proposed debt collection rules that are likely to reduce the number of call attempts that can be made. Now, add this latest call blocking technology and the industry is challenged again.

This is a strong statement from a prominent thought leader in the debt collection industry. Mr. Bauer pointed out many efforts by different regulatory agencies and how they impact call centers: “anecdotal reports of right party connects down by 15-30%”, as the FCC includes debt collection calls as an “unwanted call” category in it’s “robocall” blocking initiatives.

At TrueAccord, we agree. The industry has been seeing tremendous pressure on its ability to call consumers efficiently, not only because of regulatory pressure – this pressure is driven by consumer preference, and the fact that consumers often opt to not pick up the phone, not to mention opening a letter. As strong advocates for technology in debt collection, with our CEO now part of the CFPB’s Consumer Advisory Board, we will continue to support forward thinkers such as Mr. Bauer and others who call for the use of new technologies in debt collection. It is the consumer friendly, smart, and efficient approach for the 21st century, and we strongly encourage our peers in this industry to begin adopting and utilizing these channels in preparation for the CFPB’s expected Notice of Proposed Rulemaking, expected later this year.

The Debt Collection Rule is Coming in 2017 – Here’s What to Expect

By on August 7th, 2017 in Compliance, Debt Collection, Industry Insights

The CFPB just announced its 2017 rulemaking agenda. In its message, the CFPB states that it has “decided to issue a proposed rule later in 2017 concerning debt collectors’ communications practices and consumer disclosures.” InsideARM puts the date at September of this year. This is great news for consumers, creditors – and even collectors.

The rule is expected to focus on collector communication practices. Judging by the CFPB’s 2016 outline, that includes clarifications on the use of social media and emails for collections, as well as a cap on weekly contact attempts per account.

Emails and social media are consumers’ preferred channels for communication, even with debt collectors. We expect this rule to open the flood gates on responsible, consumer-centric, and scalable collection practices that will benefit everyone involved. We’ve written extensively on how machine learning based, digital first systems collect better than traditional solutions, and we expect these clarifications to greatly aid in giving consumers what they want.

Contact caps continue the trend of limiting the use of phone calls as means to communicate with consumers in the debt collection process. As we wrote before, the biggest challenge to the debt collection industry is that phone calls are becoming irrelevant. The CFPB is continuing the regulatory trends following consumer preference, and while it’s opening up new communication channels, it’s severely limiting phone calls. We expect this trend to worsen.

This rule is a boon for the collection industry. While it may be challenged by those who focus on getting the most profit out of old school technologies, those in the industry who embrace technology and want to help consumers can’t help but appreciate the trend. The regulator is paving the way towards better user experience, better cost adjusted technologies, and an ability to actually help consumers at scale. Industries like e-commerce, tech and fintech have been very focused on consumer experiences and cannot afford to subject their customers to traditional agency behavior.  And major banks and lenders realize that this revolution is coming, and many of them have already engaged in transforming their vendor network and internal operations to be future facing. This rule is another great step on that path.

Response to the FCC Notice of Inquiry (NOI)

By on July 31st, 2017 in Compliance, Debt Collection, Industry Insights

The FCC recently released a Notice Of Inquiry (NOI) on the topic of on-call authentication, and the debt collection industry is again up in arms about its past, rather than embracing its future. Collectors are having a hard time authenticating consumers’ identity on phone calls, and that leads to a lower number of productive conversations. In a detailed article on InsideARM, Stephanie Eidelman correctly states that “While [the proposal] is not aimed specifically at debt collection, the problem is significant in the industry. The next trick would be to assist in helping the consumer authenticate their identity to a legitimate collector, in a way that eliminates the need to share personal information.” Dear collectors, there are wonderful authentication solutions available to you. Put down that headset, turn off your dialer, and turn your attention to the online world.

Consumer preference is changing. 97% of business calls go unanswered, according to Neustar. Phone calls are real-time interactions, imposing on the consumer’s time and attention. Once consumers pick up, they start from deep suspicion towards the person on the other side, who now has to earn their trust while asking for personal information. It’s a stressful situation, especially for someone paid a commission for collected dollars. Often this devolves into a heated exchange between a stressed consumer and an equally stressed collector. Calls aren’t only bad for reaching consumers; they are bad for engaging them in a meaningful exchange, too.

Emails and digital communication channels provide a superior customer experience. Emails and social media apps are password protected, simplifying the authentication process. If you require added security, many established companies offer real time authentication solutions that keep the consumer engaged with your system. It is easy to quantify and improve the experience to keep consumers engaged, reviewing their options, until they find one that fits. Consumers can choose to engage in times that work for them, rather than times when collectors are available to take their call. As a result, using digital channels significantly cannibalizes the phone channel: on average, TrueAccord makes 5 call attempts to each account over a 90 day placement period, compared with up to 6-10 attempts per day in call center based operations, and still collects better with lower complaint rates.

Calls pose multiple challenges – from operational ones to legal ones. They are costly and complicated. The FCC’s ATDS ruling is disastrous and further limits the efficacy of phone calls. Yet collectors choose to focus on fighting phone-related regulation instead of finding new ways to communicate with consumers. It is starting to look as though some prefer a contact method that consumers think of as harassing and intrusive, because moving to digital communications is simply outside of their comfort zone.