Industry Insights Webinar: Best Practices in Mitigating TCPA Risks

By on August 13th, 2019 in Debt Collection, Industry Insights

Join industry experts David Kaminski of Carlson & Messer and TrueAccord’s own Kelly Knepper-Stephens on August 14th, 2019 at 12pm EST as they dive into the Telephone Consumer Protection Act and how teams in the credit and collections spaces can best understand the coming changes. Here is the snippet from AccountsRecovery.net:

“The Telephone Consumer Protection Act has become a landmine of legal issues, thanks to court rulings and new rules that are going to reshape how companies communicate with individuals over the phone.

In this webinar, sponsored by WebRecon, a panel of leading compliance experts from the credit and collection industry will share their insights into how companies can best manage their TCPA risks and help understand the changes that are on the horizon.”

Click here to sign up for the webinar before it fills up!

TrueAccord and the Future of Digital Debt Collection

By on August 6th, 2019 in Debt Collection, Industry Insights, Product and Technology

In January 2019, AccountsRecovery.net launched a survey of more than 100 companies in the credit and collections industry to “assess the penetration of digital communication tools and how much they are being used in the industry.” “Digital communication” includes channels such as email, text messaging, and web portals that work to reach to consumers. 

However, these channels are secondary to outbound calls and paper mail, practices that have remained unchanged for decades, even though 70% of companies believe that digital communications have had a moderate to significant impact on their collection rates! Updating these channels for the modern age can improve the collections experience for both the customer and collector. Let’s find out how!

Communication Channels

Email

According to the AccountsRecovery survey, more than half of the companies that took part in the survey are using email communication. A majority of respondents also said that they are sending emails to or receiving emails from fewer than 20% of their users. This means that 80% or more of their customers are regularly receiving calls from collectors to discuss resolving their debts rather than receiving digital communications. 

According to TrueAccord’s 2018 consumer survey, the majority of consumers using our site would rather resolve their debts online than through other channels. With such a large number of consumers interested in online engagement, it’s easy to see why we’ve leveraged digital channels to modernize the collections industry.

We use email communication as our primary form of contact at every stage of the customer lifecycle, and each message is customized for the individual.

Mobile and Text Messages

The prevalence of smartphones has made reaching out to users on their mobile devices an effective and essential channel for communicating with customers. Unfortunately, only 21.6% of collection companies are actively using text messaging as part of their outreach strategy! Even some of the largest agencies in the industry are only texting about ¼ of their customers. 

More than 65% of companies in the collections space that are not currently using text messaging as a channel are concerned about two things: a fear of being sued or not fully understanding what is and is not allowed of them. 

TrueAccord has taken steps to directly address these issues by hard-coding compliance parameters directly into our system, so we are able to securely reach our users where they are: on their phones. In fact, more than 85% of our web traffic comes from smartphones and tablets, and we are able to drive traffic to the right pages through push notifications on those devices. These notifications serve the same purpose as text messaging but are uniquely catered to that specific customer’s needs.

Web Portals

Portals and landing pages created for consumers should be exactly that: designed with them in mind. The vast majority of companies in the collections space have portals specifically designed for customers to manage their accounts, but 75% of those companies report remarkably low engagement through those pages. 

Creating an engaging portal means answering the question: “How can we make the experience personalized for the customer?” TrueAccord embraces this in its design methodology; Shannon Brown, TrueAccord’s Product Design Manager, says that our “we’re not pushing offers to them, we’re looking for information [about the nature of their debt] to customize for their needs.” Our design embraces our mission of giving consumer’s control of their financial health. 

You can learn all about TrueAccord’s design philosophy by listening to our full interview with Shannon here!

By focusing on developing interconnected, customized content that reaches users through multiple channels, we can reach consumers via email and mobile push notifications with the goal of bringing them back to our website. 

The debt collection industry at large has a long way to go to meet consumer expectations about financial services. Our machine learning algorithm optimizes which message to a customer to send on what channel, addressing those expectations and letting users manage their debt at their own pace. This is also why we work to provide our users with as much visibility into their debt as possible through easily accessible digital channels.

Yes, 866-611-2731 is Our Number. Why is That so Important for TrueAccord?

By on May 23rd, 2018 in Company News, Debt Collection, Industry Insights
TrueAccord Blog

We wanted 866-611-2731 to be recognizable.

TrueAccord was built as a consumer facing brand from day one. We have one number, 866-611-2731, that we use for outbound and inbound calls. Our name is distinguishable, not a three letter acronym. We have Google reviews and an online presence. We wanted consumers to easily find, research, and comment on our presence. We want to make a difference.

You can’t help consumers if they don’t know who you are

Being in debt is scary, confusing, and generally not a great experience. When consumers are bombarded by calls from unknown numbers or worse, callers who pretend to be from their area code, their trust in phone calls erodes. Less trust leads to fewer contact rates, and disengaged consumers. Running away from your debt is a bad idea if the alternative is working with a customized, personalized, and digital first experience that actually helps you pay down what you owe. We wanted people to know who’s calling.

The thing is, debt collection can be a stepping stone. When turned into a cooperative and personalized experience, it can be a first step to getting back on your feet. People get into debt for many, diverse, largely unexpected reasons: divorce, job change, healthcare issues for them or a loved one. By making debt collection accessible, TrueAccord aims to be a part of your growth journey, not just focus on helping you pay a single debt. You’ll find customized payment options, an easy mobile experience, and a helpful customer service team (when you call our number, 866-611-2731).

Having a recognized number helps us call *less*

When consumers don’t pick up, the most common strategy is to call again. Agencies may call a number 5 times per day. At TrueAccord, we don’t think this is a good experience. When we call a consumer, even once, our recognized phone number allows them to find us online and be convinced that they want to talk. From there, going to our website or finding one of our emails in their inbox is a breeze. Self service is welcoming and easy. No more aggressive repeated phone calls when it’s least convenient.

Being customer-facing and helpful is our #1 goal. If you see 866-611-2731 in your caller ID, know that we’d love to help

Call us or click a link. Great experience in debt collection isn’t a myth anymore. That’s why we started TrueAccord, and why we want you to have an easy time finding us and talking to us.

Writing High Performing Compliant Content at TrueAccord

By on May 22nd, 2018 in Debt Collection, Industry Insights
TrueAccord Blog

Moving collection communications online means moving away from phone calls. Writing to consumers at scale draws a lot of scrutiny because of regulatory requirements and user experience considerations. Hear our Managing Paralegal and Director of PMO, Antonia Wong, discuss this with our Head of Design, Shannon Brown.

Collection Strategies and How TrueAccord Fits Into Them

By on May 15th, 2018 in Debt Collection, Industry Insights
TrueAccord Blog

New to collections? Looking to understand the moving parts? Or maybe you’re an experienced strategist looking to understand how to best use TrueAccord? Hear our Head of Business Development, Jason Hass, and Head of Client Services, Pej Azarm, talk about these important topics.

Comparing TrueAccord Operations with Bank Operations

By on May 8th, 2018 in Debt Collection, Industry Insights
TrueAccord Blog

Hear our Director of Operations, Lauren Sawicki, talk about the differences between running operations for a major bank versus TrueAccord. While both are collections related, the differences can sometimes be staggering.

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.

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.

TrueAccord’s 2018 Predictions for Debt Collections Market

By on February 1st, 2018 in Debt Collection, Industry Insights

The year 2017 was full of intriguing developments in the US debt collection industry.

  • The Consumer Financial Protection Bureau published a report that revealed debt collection was the issue most complained about by American consumers. Along with mortgage-related complaints, debt collection makes up about half of the 1.2million issues raised with the CFPB since it started accepting complaints in 2011.
  • The Federal Communications Commission adopted a new set of rules aimed at shutting down robocalls, an engagement method which has long been used by traditional collection agencies.
  • And, despite a growing regulatory pressure matched by increasing consumer demand, the pace of technological and product innovation in the space remained slow.

As we move through the early weeks of 2018, it is time for us to assess how the debt collection landscape might change and advance in the coming year. Here are our predictions for the rest of 2018.

Levels of consumer debt in the United States will continue to rise

Midway through 2017, Nasdaq.com commented that consumer debt in the US was rising at an “alarming” pace. In the second week of 2018, it was clear that that trend shows no sign of slacking, as NowThis reported that credit card debt had reached an all-time high of $1.023trillion. Student loans have become the largest source of household debt outside of mortgages. The most recent reports indicate a total US student loan debt of $1.48 trillion – that’s an average of more than $37,000 per graduate. And the student loan delinquency rate is 11.2%.  Car loans are also rising. Automotive News confirmed in September that Americans owe $1.1tr in auto loans – a new record.  At the same time, the cost of consumer goods and services is also increasing. The cost of several major areas of household expenditure – including medical expenses, housing, and food and beverages – has increased faster than income growth since 2007. The American economy is strong and shows every sign of remaining so in the coming months. And while the economy remains strong, people across the nation will keep spending. The need for a new generation of consumer-centric, automated, technology-driven debt collection experiences has never been greater.

Traditional methods of debt collection will become progressively less effective

The total recovered by debt collectors has declined steadily in recent years, falling from $13.3billion in 2012 to $11.4bn in 2016. At the same time, the CFPB reports that the net credit card charge-off rate – a handy barometer of the efficiency of debt collection – has risen gradually from a low of 3.8% in the second quarter of 2015 to 4.9% in the second quarter of 2017. One of the reasons why less debt is being recovered is the methods which have traditionally been used. Telephone calls and letters are not how modern consumers want to be approached. They find it easier to block phone calls; they want an interactive, user-friendly solution that is tailored to their needs and allows them to use their preferred technology in a way and at a time that suits them.

There is an app for everything these days. The average internet user now spends more than two hours a day on social media and messaging services. All consumers are spending more and more time online and millennials, the largest demographic in debt today, spend an average of 223 minutes each day – more than three-and-a-half hours – on their mobile devices, up from 188 minutes in 2016. And yet the debt collection space has not seen the sort of technological innovations that will allow it to keep pace with this new mobile-first age. Agencies are reacting by consolidating for scale but, as the CFPB report stated, they are still using the same methods for collection.

The debt collection industry will need to start investing in technology and creating customer-centric experiences

To counter the above trends, it’s imperative that debt collection agencies invest in data-driven technology that allows them to learn about, and understand, the behavior of the consumer. In short, they need to ask themselves the following questions:

  •   How can we have a conversation with consumers?
  •   How do we track their behavior?
  •   How do we then adjust our strategy to ensure better results?

It’s not just millennials. Older demographics also want a more customer-friendly, consumer-focused approach that is driven by digital technology. Consumers want to pay off their debt, but they want to do it in a way and at a pace that is convenient for them.  There needs to be a shift in creating tools that make it easier to pay off debt, so more people will do it. That means investing in the technology that allows for a user-friendly, omnichannel approach.  Flexibility, convenience and a great user experience are key to more debt being recovered. The industry has to begin its shift to use technology, automate and implement user-centric approaches to collections to keep pace with increasing levels of debt and consumer preferences.  

The pace of Fintech innovation will continue to be high

While the gap between spending and debt collection by traditional agencies continues to grow because of a reliance on outdated methods, in the banking and investment spheres there has been a large number of entrants that have quickly gained market share.  The wealth management space has seen disruption by newcomers such as Wealthfront, RobinHood, and Betterment offering financial planning and investing for just about anyone.  By lowering the barrier to entry and creating great user experiences they have been able to quickly penetrate the market and to go head to head with the more traditional established firms.  Challenger brands such LendingClub and SoFi are also re-imagining the lending pace, making it easier for consumers to access alternative loans.  These disruptors are bringing great marketing and compelling user experiences as a way to differentiate and gain market share with much smaller teams. As a result, they are challenging and changing consumers’ behavior. The debt collection industry needs to aspire to a similar agility simply to be able to keep pace with this hi-tech innovation.

Emerging companies will need to devise strategies to tackle debt collection

Emerging brands in the consumer space who are looking to grow retention and advocacy will need to address the issue of debt collection. They need to absorb the lessons of the current landscape and integrate optimal collection practices into their customer proposition sooner than later. As well as recovering more debt, this process will by definition help to increase customer retention. Emerging brands tend to focus first on growth and, as a result, they lack the expertise to carry out collections in-house and do not relate to traditional agencies’ methods and values. While they are focusing on their core offering, it is important that they embrace a more forward-looking method of debt collection. They will need collections processes that align with their organizational core values and their customer’s preferences, putting more pressure for innovation in the collections space.

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.