Regulators Care As Much About Consumer Preference in Debt Collection as Creditors

By on March 25th, 2021 in Industry Insights
TrueAccord Blog

Recent regulatory activity makes it clear: regulators care as much about consumer preference in debt collection as creditors. In this blog post, Kelly Knepper-Stephens, TrueAccord’s VP Legal & Compliance, highlights the recent laws and regulations designed to protect consumer preferences in debt collection.

At a time when consumers’ power to impact a lender has increased dramatically, Klarna made the decision to outsource 1,005 of its debt collection activities. Jan Hansson, Vice President Debt Collection for Klarna, recently explained the reasoning behind that decision in TrueAccord’s recent webinar, Digital Debt Collections 101.

Jan explained how Klarna manages brand image with its collection partners, using “soft value metrics” to evaluate success, such as the number of consumers who return to use Klarna after having been in debt collection on a Klarna product. The fact that consumers return to Klarna after being in debt collection demonstrates that collections can be a positive process. Jan emphasized the importance of ensuring that debt collection is aligned with your total customer journey “so that any debt collection continues to build on your positive brand image.”

Honoring a customer’s debt collection preferences is the key. As Ohad Samet, founder of TrueAccord stated in Digital Debt Collections 101, “customers want to be contacted at the time and place and channel that is convenient to them…they would like to be in control of that.”

Federal and state lawmakers, who continue to pass laws and regulations designed to protect consumer preferences in debt collection, share the same consumer preference mindset of creditors like Klarna. A quick look at the most recent federal activity showcases this fact.

The CFPB’s Debt Collection Rule
On November 30, 2020, the Consumer Financial Protection Bureau (CFPB), published Regulation F, the first attempt to refresh the Fair Debt Collection Practices Act for modern communications. Debt collectors and creditors have until November 2021 to align their processes to these new rules, which are chock-full of efforts to protect consumer preference including:
• Requirements to uphold and pass on consumer requests to stop calls, not be contacted at certain times, and not be communicated with at particular locations (home, work, etc.)
• Steps to identify a consumer’s location to ensure communications occur between 8AM – 9PM, including when a consumer’s zip code and area code suggest different time zones
• Requirements for clear and conspicuous ways to unsubscribe from text messaging, emails, and other forms of digital communications
• Frequency restrictions, not just for calls, but for the frequency of contact efforts in the entire outbound communication strategy.

Fortunately for TrueAccord, our digital debt collection strategy was built for consumer preference and already meets most of the rule’s new requirements. As Ohad mentioned in the webinar, 96% of all TrueAccord communications are automated, and the other 4% are inbound communications, which makes our Customer Engagement team a customer care center.

The TRACED Act
In response to continued consumer complaints and pressure over unwanted robocalls, Congress passed the Pallone-Thune TRACED Act in 2019 to deter and punish robocall abuse. The law required the FCC to adopt and publish regulations that “help protect a subscriber from receiving unwanted calls or text messages from a caller using an unauthenticated number,” which the agency did in late 2020. The provisions of the TRACED Act and its implementing FCC regulations ultimately aim to increase consumer choice options mostly around the ability to identify and block unwanted calls by:
• Requiring carriers to implement the call authentication framework of STIR/SHAKEN which allows the consumer to identify the identity of an inbound caller;
• Requiring carriers to implement a reassigned number database so that companies can determine, in advance of calling, whether a given phone number for a consumer has been reassigned to a different person.

We are just now beginning to see companies, including telephone carriers, announce their compliance practices to implement these FCC Orders. For example, contact center platform service provider Twilio, headquartered in San Francisco, recently announced updates to their terms of service and acceptable use policy. At least one carrier, T-Mobile, has gone as far as to ban debt collection text messages as reported by InsideARM.

As lawmakers and lenders focus on consumer preference, successful debt collection compliance programs must incorporate consumer preferences into their practices not only to meet the new regulatory requirements, but also to provide a positive customer experience that consumers expect.

TrueAccord Group Welcomes Courtney Graham as Chief People Officer

By on February 8th, 2021 in Industry Insights
TrueAccord Blog

TrueAccord Group has announced Courtney Graham, former Chief People Officer of Four Winds Interactive, as its new Chief People Officer. 

“Our family of companies is growing rapidly, and we are thrilled to have Courtney on board as our first Chief People Officer. Courtney’s experience as a People leader within high-growth technology companies will be instrumental in helping TrueAccord scale while maintaining a strong people-first culture,” said Ohad Samet, CEO and co-founder of TrueAccord Group.  “We are on a mission to empower consumers to get to financial fitness, and that mission begins with our team. Courtney is a compassionate, engagement-focused leader who will undoubtedly bolster our culture of empowerment, empathy, and inclusivity.” 

“We all know that a great company is not just about the product or service. A great company is when innovative offerings and incredibly talented, productive people collide. In my experience, that’s often when the ‘magic’ happens,” said Courtney Graham. “I am delighted to be part of the TrueAccord team and am excited to build an inclusive work community that we all want to be part of.”

Courtney Graham joins a world-class leadership team that includes Ohad Samet, Sheila Monroe (COO and CEO of TrueAccord Corp), Gene Linetsky (CTO), Noah Barr (CFO), Laura Marino (CPO), Charles Deutsch (GM of Financial Services), and Nadav Samet as CIO and CEO of True Life Solutions, which launched the game-changing consumer product, Engage.

In 2020, TrueAccord Group added 146 new hires and is continuing to expand in 2021, with hundreds of open positions across engineering, product, sales, client services, and operations. See all open positions and apply here: https://www.trueaccord.com/about-us/careers/  

About TrueAccord
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. TrueAccord’s platform is powered by machine learning with a decision engine that analyzes consumer behavior and delivers personalized and empathetic consumer experiences. By communicating at the right time in the right channel with payment options that meet consumer needs, TrueAccord provides exceptional recovery rates for top 10 financial institutions, debt buyers, lenders, and technology companies. TrueAccord empowers 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 https://www.trueaccord.com.

Webinar: Digital Debt Collections 101 with Klarna and TrueAccord

By on February 1st, 2021 in Industry Insights

Watch the full recording here, or read on to learn more about this webinar.

Poor customer experience. Compliance challenges. Reputational risk. These are some of the factors that have prevented lending organizations – from areas as diverse as Fintech, utilities, service organizations, property management, telecommunications, and more – from investing in debt collections.

But ongoing financial uncertainty has led many of these organizations to seek innovative approaches to improve consumer financial health and solvency. And in contrast to traditional collections methodologies, digital debt collection offers the promise of a superior consumer experience that drives engagement, results, and ultimately brand loyalty.

How should companies new to digital collections get started? On January 28, TrueAccord hosted a webinar to tackle this timely question. Our featured guest was Jan Hansson (Vice President Debt Collection, Klarna), a veteran of the debt collections space. Jan has decades of operating experience in collections, including leadership roles within Klarna for the past 12 years.

In this webinar, Jan spoke with Ohad Samet (Co-founder and CEO, TrueAccord) about Klarna’s journey into digital debt collection. They discussed the transformational impact that digital collections have delivered for Klarna, particularly around consumer experience and loyalty — and share advice for other organizations looking to embark on a similar journey.

Watch the full webinar here.

The Four Trends Making Digital Debt Collections a Necessity

By on January 19th, 2021 in Industry Insights
TrueAccord Blog

The following is an excerpt from our recent ebook, Ten Critical Questions:
The Buyer’s Guide to Digital Debt Collection Solutions
. To download the full ebook, click here.

Consumer behavior and expectations have undergone significant changes over the past few years – trends that COVID has only accelerated. For lending organizations, the end result of these changes is that digital collections have shifted from a “nice to have” into a must-have.

Here are the four consumer trends that are disrupting the traditional collections model and making digital-first collections a necessity:

Consumers are digital-first.

The decline of the landline has made it harder to reliably reach consumers at home. And advances in mobile technology (e.g., call blocking) have made it easier for consumers to screen calls. As a result, right-party contact rates are low and continuing to decline. In fact, 78% of collection agents see their calls blocked, and 74% of collection agents see their calls marked as “Spam or Fraud.” (Source: ACA)

What this means for lending organizations
Organizations must embrace a multi-channel digital approach that meets customers where they are, empowering them to respond at their own convenience.

Consumers won’t accept one-size-fits-all treatment.

The explosion of personalization in marketing (from product recommendations to programmatic advertising) means that consumers expect to be communicated with as individuals, in a way that is relevant and tailored to them.

What it means for lending organizations
Organizations must seek out a digital collections approach that tailors messages and outreach to individual consumers.

Consumers expect a seamless, self-serve experience.

From Amazon to Instacart, consumers have become accustomed to being able to do everything digitally – without interacting with a human being.

What it means for lending organizations
It’s not enough to communicate with customers over digital channels. A digital collections solution must offer a robust and intuitive self-service interface that enables customers to engage in their own time.

There are now major logistical challenges in scaling the contact center model.

With COVID limiting in-person interactions, it’s more challenging than ever to hire, train, house, and monitor contact center agents – creating obstacles with the traditional agency model.

What it means for lending organizations
A digital collections solution must be built for scalability, enabling organizations to meet collections volume without adding agents to make outbound calls.

For more insights on digital collections, download our recent ebook, Ten Critical Questions: The Buyer’s Guide to Digital Debt Collection Solutions.

Digital Collections Roadmap for 2021

By on January 8th, 2021 in Industry Insights

As we begin 2021, we’re looking ahead and seeing a lot to be optimistic about in the world of collections. Our industry is becoming more innovative and more consumer-focused. Digital channels, self-serve options, & machine learning create a new industry normal in which both collectors and consumers can succeed.

Get on the path to becoming a best-in-class collector this year. We’ve compiled our favorite tools and resources into a Digital Collections Roadmap. The resources on this map will help you assess your current processes, learn about industry benchmarks, and build a more innovative and consumer-focused collections operations in 2021.

Download the roadmap here.

The Digest: January 2021

By on January 6th, 2021 in Industry Insights

We’re only one week into 2021, and it’s already an eventful year. The surging pandemic, lagging vaccine rollout, imminent political change, and turmoil in Washington are affecting every corner of the country, including the worlds of finance, fintech, and collections. Here are the articles we’re reading to help make sense of what this year may bring:

• Distribution of the COVID-19 vaccine in the US is much slower than expected, but economists are already looking ahead to what a post-vaccine economy could look like—especially in light of the recently passed $900B stimulus package. Economists surveyed by The Wall Street Journal foresee “tough sledding this winter, and then a rebound” in the spring. Likewise, Nobel laureate economist Paul Krugman predicts that “mass vaccination, pent-up demand, greater household savings, technological progress, and the Biden administration’s backing” will fuel a jobs boom later this year. Our fingers are crossed.


Part 2 of the CFPB’s new debt collection rule is here. New guidelines around validation notices, time-barred debt, and passive debt collection are all covered in this section. Kelly Knepper-Stephens, TrueAccord’s VP Legal & Compliance, will be sharing her insights on the new rule at the ACA Huddle Webinar this Friday 1/8 (ACA log-in required). If you want to go even deeper on Part 2 of the new rule, you can download all 354 pages here.


• If you’re still processing 2020, we recommend checking out Forbes’ round-up of the winners and losers in fintech and banking from the past year, as well as PYMNTS.com’s list of trends that shaped the digital-first economy in 2020. Unsurprisingly, the Buy Now, Pay Later boom and the meteoric rise of neobank Chime and payments startup Stripe were noted as standout events in the world of fintech this year.


• If you’d rather look forward than back, we recommend checking out Tearsheet’s expert panel on what banking will look like in 2021. As longtime proponents of consumer-focused financial services, we love this prediction in particular: “Banks will have to find a way to duplicate personal, in-person relationships–but at scale and with a digital-first approach. This will be a priority in 2021.” To learn about TrueAccord’s method for creating innovative, personalized experiences in collections, check out our webinar on the future of digital debt collections.


• Our founder and CEO Ohad Samet recently appeared on the Wharton Fintech podcast to talk about TrueAccord’s mission to change the debt collection industry by empowering consumers with flexible, personalized payment options. If you want to even know more about TrueAccord’s vision for 2021, check out our Digital Collections Roadmap, a collection of tools and resources to guide your collections strategy this year. For an even deeper dive, check out our ebook, The Buyer’s Guide to Digital Debt Collection Solutions.

Key Takeaways from TrueAccord’s Utilities Roundtable on LIHEAP and COVID-19 Assistance

By on December 18th, 2020 in Industry Insights
TrueAccord Blog

By March 2021, small business and residential utilities customers could owe up to $40 billion in unpaid debt.  To better understand this moment of increased financial hardship and economic uncertainty, TrueAccord hosted a roundtable with several Northeast and Midwest utilities companies. Participants shared insights and brainstormed creative solutions to better help their utilities customers, including:

  • Educating consumers on assistance programs
  • Reaching consumers where they are, with the use of digital strategies
  • Streamlining assistance programs to make them more accessible for consumers
  • Developing partnerships with faith-based & community organizations

Educating Consumers about Assistance Programs

Utilities companies have found it both necessary and effective to educate customers on various assistance programs. The Low Income Home Energy Assistance Program gives families a cash grant to pay for their heating bills, or payment assistance programs that give families monthly credit based on a household’s income and energy use.  For those that do not qualify, there are deferred payment plans or Customer Assistance Referral and Evaluation Programs (CARES), like the one that the Pennsylvania Public Utilities Commission set-up to assist family emergenciesHowever, even with the right messaging and the right programs, there’s still challenges in reaching consumers. 

Reaching Consumers Where They Are

Communication methods are quickly moving digital. Consumers are increasingly finding phone calls disruptive, and traditional letters pile up or are simply thrown away.  To reach the most consumers, emails, calls, social media, and text messages are now table-stakesThough over 60% of millennials are burdened by debt, they expect highly tailored experiences, mobile-optimized payment portals, and extensive use of social media.  To reach other demographics, some utilities are exploring radio, television commercials, and other creative solutions.  One organization repurposed a fleet truck and traveled to food banks to educate low-income consumers on assistance programs.  Another organization hosted a virtual tradeshow to help consumers navigate paperwork and helped over 4,900 of their customers complete applications on the spot! 

Streamlining Assistance Programs

On the ground, many utilities found that consumers simply did not have basic access to the internet, lacked the time to complete an application, or found the bureaucratic process confusing and cumbersome.  With that in mind, some utilities created a one-stop shop to merge assistance applications so if consumers did not qualify for a low-income program, they might qualify for a government grant or a deferred payment program.  Another utility partnered with the Department of Human Services and had their representatives certified to complete state emergency relief applications with customer consent, which greatly aided the elderly’s ability to complete applications.

Developing Partnerships with Organizations 

Lastly, some utilities are building grassroot support to develop partnerships with trusted community organizations and churches.  Because these organizations have an unparalleled reach and trust, many utilities can use community spaces, rely on trusted sponsors, use co-branded email campaigns, and leverage intimate knowledge of their network to tailor outreach and programs to increase awareness.

Summary

With only an hour to talk about these topics at the roundtable, our team at TrueAccord and the participating utilities all felt like we needed to host another virtual event in 2021.  If you’re interested in participating in a future roundtable, please email Matt Buffalini at  mbuffalini@trueaccord.com.  

You can learn more about TrueAccord’s digital-first, machine-learning AI software in a new e-book or schedule a call to see how TrueAccord can help your utility deliver better results, provide industry-leading customer experience, or assist with LIHEAP and assistance program awareness.

The Digest: December 2020

By on December 17th, 2020 in Industry Insights

Between the COVID-19 vaccine rollout, a potential second stimulus package, and the incoming Biden administration, big changes are upon us in the United States. How will these changes impact the worlds of finance, fintech, and collections? Here are the headlines we’re watching as we consider the changes to come in 2021:

• As we covered in November, the CFPB’s new debt collection rule signals a continued shift towards more protections for consumers in debt. With the incoming Biden administration, more regulatory news from the CFPB could be imminent, including announcements of more aggressive oversight of the student debt industry and regulations to help homeowners who are facing foreclosure.

• According to Bloomberg, “Americans’ household finances are in the best shape in decades,” despite the surging pandemic. While 2020 has been much harder on working-class families, data from the Federal Reserve shows that “they too have more money in the bank now.” Unfortunately, this good news regarding household finances is complicated by the recent jump in unemployment claims and an increase in food insecurity among low-income families.

• Lawmakers are currently in stimulus negotiations, which means some financial relief could be on the way for families and businesses. Even if a deal is not achieved in the coming weeks, the Biden administration has indicated that “it will push for a multi-trillion-dollar package in 2021,” according to Business Insider. As we’ve noted, a large stimulus could have wide-ranging effects on consumer finances, including a possible sharp increase in debt repayment.

• On the fintech front, we are still closely watching the rising success of BNPL (Buy Now Pay Later) startups, such as Affirm, Afterpay, and Klarna. PYMNTS.com recently released a study, Buy Now, Pay Later: Millennials and the Shifting Dynamics of Online Credit, that sheds light on the audience factors encouraging this emerging landscape. As we’ve noted before, flexible payment options can be a real win-win: better for the customer experience, as well as a positive for payment plan retention.

What the winter holidays and tax season have in common

By on December 10th, 2020 in Industry Insights
TrueAccord Blog

As we speed towards the end of a tumultuous year, I wanted to share my thoughts on what the months ahead may bring for the collections industry.

First, to address the riddle in the title of this post, what do the holidays and tax season have in common? Debt repayment. According to TrueAccord’s data from 12 million American consumers, debt repayment typically peaks twice a year: once during the winter holidays and again from February to early April when tax refund checks are received.

But those aren’t the only factors that may affect debt repayment in the near future. A second COVID stimulus package may be around the corner, and if the first stimulus package is any indication, that may lead to an increase in the number of Americans who are choosing to pay off debt. (In 2019-2020, there were not two, but three peaks in debt repayment—the winter holidays, tax season, and April-May, when stimulus checks were delivered.)

So, what will be the impact of a high debt repayment season coupled with an economic stimulus? A sharp and potentially unprecedented increase in debt repayment might be coming very soon.

If you’re worried about scaling your collections operations to effectively meet the increase in payments, reach out to TrueAccord. We put the consumer in the driver’s seat: 96% of consumers we work with resolve their debts through self-service on our digital channels. That high level of automation enables TrueAccord to run very lean, averaging 80,000 active accounts per agent.

At TrueAccord, we are changing the lives of the 77 million Americans in debt and leading the digital transformation of the collections industry. We’d love for you to join us.

Sheila Monroe is the CEO of TrueAccord Corp.

TrueAccord Releases The Buyer’s Guide to Digital Debt Collections Solutions

By on November 27th, 2020 in Industry Insights
TrueAccord Blog

TrueAccord released Ten Critical Questions: The Buyer’s Guide to Digital Debt Collections Solutions. The ebook is the definitive guidebook for organizations looking to jumpstart their digital debt collection journey. 

“We wrote this book to distill what we’ve learned after many years in the industry,” said Sheila Monroe, TrueAccord Corp. CEO. “There’s no question that digital-first debt collection delivers superior results for creditors and a better experience for consumers. But not all solutions are created equal.” 

The Buyer’s Guide starts with four key trends that explain why digital debt collection is the wave of the future. It then lays out the critical questions that organizations should ask before entering into a partnership with a digital debt collection vendor. 

The ebook equips potential buyers with benchmark data and insights into key questions like:

  • What channels do you use to reach consumers?
  • Do you use advanced technology like machine learning? If so, how?
  • What percentage of customers resolve their debt through self-service, without any human interaction? 
  • On average, how many accounts does each agent handle?

“Ultimately, our goal is to give collections and recovery professionals the tools they need to navigate a complex landscape and select the best digital collections solution for their organization – and their consumers,” said Monroe. 

Download the ebook today to learn more.