On September 9th the CFPB released consent orders for Encore Capital Group of San Diego, CA and Portfolio Recovery Associates (PRA) of Norfolk, VA following an investigation uncovering their attempts to collect debt that they knew or should have suspected were invalid. Hitting the US’s two largest debt buyers and collectors with a combined settlement of $72 million in refunds and penalties (as well as the inability to collect on an additional $128 million in debt) for using deceptive tactics, sends a clear message about best practices surrounding debt substantiation in the collections industry.
TrueAccord has been refining the debt dispute process since our inception in 2013. We’ve found that offering digital disputes streamlines the conversation between consumers and collectors while also reducing compliance risk. By encouraging consumers to stay engaged during the collections process, we’re creating an opportunity to discuss debt-related concerns. As a result, complaints decrease, leading conversations to move quickly into debt resolution.
The dispute process is as opaque to the collector as it is to the consumer. While respecting the 30-day window and not pressuring consumers to pay while the debt is in dispute, a collector is never quite sure whether a dispute is en route via the postal system. This leaves a long period – days and often weeks –in which the consumer knows that a dispute is “in the mail”– but the collector is still lawfully able to contact them. This creates an ambiguous situation that often leads to consumer complaints.
A gloom hangs over the debt collection industry. Between the recent FCC ruling and the decline of postal mail, there’s talk on the internet about the death of the debt collection industry, or at least its most popular tools. Now with the upcoming FTC-sponsored Debt Dialogue, the industry is preparing to get before regulators to discuss how business is being stifled amongst mounting costs and regulations. Sometimes we feel like an outdated robocall (*zing*) when we say that there’s a better way. Continue reading “Debt Collection is Dead, Long Live Debt Collection!”→
Earlier last week, I, along with TrueAccord’s CEO, Ohad Samet and general counsel, Avital Samet, attended the Association of Collections and Credit Professionals International (ACA) convention in Boston. Even though it was my third time attending the ACA convention; it was my first time attending as Head of Business Development for TrueAccord.
If you work in debt collection, attending the ACA conference is worth it. In addition to informative panels and the exhibit hall, there are a ton of networking opportunities. The collections industry is based on relationships and it is only through hallway conversations and drinks at end of day receptions that these relationships can be built. Continue reading “ACA International Convention & Expo 2015”→
Choice is inherent in the way we, as 21st century consumers, interact with our world. The choice to eat whatever we want. The choice to take whatever form of transportation we like. The choice to marry whomever we wish. The concept of choice in debt collection isn’t revolutionary; debt collection has always been linked to the consumer experience. Yet, recent crack downs on bad actors in the debt collection space by the CFPB, as well as the July 10th ruling from the FCC feels like an affirmation of how TrueAccord approaches debt collection. Continue reading “The FCC is Saying: Give Consumers Communication Choices”→
It’s taking a herculean effort to not title this, “We told you so.” Just a few months after our CEO, Ohad’s, Op-Ed about debt buying practices got strong responses from the industry, JPMorgan Chase & Co. is currently in trouble with the Consumer Financial Protection Bureau to the tune of at least $136 million. The reason? Problematic data management and debt sales practices.
“Debt sales are broken. Brokers, buyers and sellers offer books of debt that may be double- or triple-sold, lack documentation, or even be illegally originated.
Some tertiary and junk debt buyers, also known as shifty “paper boys,” are guilty of these violations. But leading financial institutions are also implicated in the Consumer Financial Protection Bureau’s recent reports on debt sales and collection.”
This is how our opinion piece on American Banker starts. Interested? Read more here.
We write quite a lot about the law, compliance, and other “boring” stuff over here at TrueAccord. The thing is, we don’t think these topics are boring. Regulation, the law, and working with regulators is something you have to embrace when entering a highly regulated space. Our ability to introduce innovation in debt collection requires multiple skills. Among them, it hinges on our ability to combine forward looking technology with just enough understanding of how to talk about it with regulators. This means taking an active roles in commenting, debating and when possible – crafting opinions about the law itself.
This is why we’re happy that our General Counsel, Avital Gertner-Samet, was appointed to the Consumer Financial Services Committee of the Business Law Section of The State Bar of California (aaaaand… breath!). Seriously, debt collection is no monkey business, and joining these organizations is our way of contributing our thinking to the variety of voices influencing the law.
Congratulations, and to our new partners at the State Bar – we look forward to working with you.
We started TrueAccord to make a difference in the debt collection industry, and that includes shining a light on practices that may not be illegal, but we think are either unethical or promote unethical behavior. We started by reviewing the downsides of quotas in debt collection, and today we’d like to touch on another burning issue: convenience fees.
Charging convenience fees for certain type of payments (card, electronic, or every payment that isn’t cash) is a common practice in debt collection. Even if the agency you’re working with aligns well with your values and expectations (a tough proposition in this fragmented market), you should be very careful about allowed convenience fees, for the following reasons:
TrueAccord is a machine-learning and Al-driven 3rd-party debt collection company that is reinventing debt collection. We make debt collection empathetic and customer-focused and deliver a great user experience.
Our digital-first approach to debt collection creates a cycle of collections growth:
1. Improve the perception of the industry
2. Provide a personalized experience
3. Build brand equity and collect
