How to create a consumer-focused experience: An interview with Cassie Cox

By on June 9th, 2020 in Industry Insights, Industry Interviews

Traditional call and collect debt collection agencies may see up to 5,000 accounts managed by each agent on their team. Increasing that number to 80,000 accounts per agent not only requires the support of powerful machine learning technology but an extensive training program. Cassie Cox, TrueAccord’s Director of Operations, discusses how her prior experience in collections and a unique training program has enabled our team to manage multiple communication channels and support a customer-focused experience.

Profile photo of Cassie Cox
Cassie Cox, TrueAccord’s Direct of Operations

How has your experience in debt collection shaped your approach to managing operations today?

I’ve been in collections for 25 years. I started my career on the phones as a debt collector myself, and I worked my way up to a supervisor position and eventually a department manager. I just kept going from there. I’ve had the opportunity to work across the country—North Dakota, Oregon, Virginia, and now Kansas—and in several roles where I was responsible for the agent experience. 

Consumers’ expectations have changed significantly. I remember when having an IVR (interactive voice response system) manage call flows was an annoyance to people. Customer experience scores would plummet because of them. Someone would call in and want to speak with an agent, not a computer. 

Today, no one wants to talk to an agent anymore. If someone has to pick up their phone, hearing an IVR is their best-case scenario. You have to meet your customers’ needs from tomorrow, today, and improving the overall customer experience with your company starts with having the right infrastructure in place. You need to ask the right questions:

  • How are consumers trying to engage with you?
  • What tools do your agents need?
  • How do you develop those tools?
  • What processes do you build?
  • What controls are in place to maintain consistency?

All of this helps to make sure that the customer experience comes to life in the way that you design it and doesn’t go off the rails. You can use these guidelines to train new hires and manage new process deployment in the future, and you can manage this by building a quality knowledge management system.

Speaking of processes: as I understand it, our agent training process is pretty extensive. Can you walk me through what training looks like and why that’s the case?

The key differentiator for our training process is really that our agents are working closely with TrueAccord’s technology. Agents in a traditional call center are regularly managing payments and routine account questions. When 96% of our consumers are managing their accounts through self-service, the consumers that do email or call us truly need help.

Machine learning technology drives TrueAccord’s consumer experience. If you want to learn more about the role of machine learning in debt collection, you can read more here.

This means that our call types are typically more challenging, and we need to rely on more complex problem-solving skills. So our goal with our training is to create a team of elite problem solvers.

Agents also have their own technology to learn and manage. We have our own CRM that helps automate scripts and disclosures that prompt agents so they don’t have to memorize a unique playbook for every client. If, for example, a creditor has a unique out-of-statute disclosure, that information can be built into our system, so we make sure that our team sees it when they need it. 

These processes are fairly standard in the collections space, but they still require training. The biggest reason that our program is a full six weeks is that our agents are managing multi-channel communications. I’ve worked with larger companies where you have one team dedicated to email, one for inbound calls, and another for outbound calls. Our agents are managing all of our channels at once.

“I’ve worked with larger companies where you have one team dedicated to email, one for inbound calls, and another for outbound calls. Our agents are managing all of our channels at once.”

A new hiring class will spend two weeks in a classroom setting designed to teach Collections 101. This ten-day period is meant to go over subjects like the differences between first party and third party collections, defining pre-charge off versus post charge off debt, and who our clients are. Reviewing collections laws and regulations is also a foundational part of the education process, and then we finish off by walking through our communication channels and TrueAccord’s systems.

The next week, these agents begin to manage inbound email communications. Once they feel comfortable with email, we have another week of phone training before they spend the fifth week managing calls. Then, in the last week of their on-the-job training, they are working both email and phone communications.

I’ve seen other companies with training programs that last anywhere from two to four weeks, and it’s great to have people ramped up quickly, but you also have to balance that with high attrition rates and error rates. 

Our training team is also incorporating a comprehensive suicide-prevention training into our agent onboarding process as well as for our current staff. A surge in unemployment and growing anxieties about financial stability and personal health due to the pandemic have contributed to an increase in consumers that are in need of more than simple financial assistance. Our agents experienced this surge first hand, and we want to equip them to successfully navigate these difficult conversations. This includes being able to deescalate potential life-threatening situations and referring to resources like the National Suicide Prevention Hotline (1-800-273-8255).

Even here at TrueAccord, the process has improved over time, and we continue to improve our training methods because we want to set people up for success. 

Some improvements and changes have been expedited recently. You recently hosted a webinar with Tim Collins [TrueAccord’s Chief Compliance Officer and General Counsel] about shifting agents to a work-from-home environment that has generally gone very well. The COVID-19 pandemic has made a huge impact on work standards and practices, but are there other challenges we’re working to address at the moment?

If we’re talking about larger-scale challenges, it’s important for us to continue improving our training and helping our agents navigate conversations and negotiations with consumers, but that need has also been amplified by COVID-19. The pandemic sent the nation and the world into crisis mode, and for us, that meant that when a consumer reached out and said they had been impacted and they couldn’t pay, we would tell them “It’s okay, we understand.” 

If you’re interested in learning more about how to adapt to new work-from-home needs check out the full webinar with Cassie and Tim here!

TrueAccord has also worked directly with many of our clients to implement a hardship program to offer further assistance to consumers directly impacted by COVID-19. 

Unfortunately, whether they’ve been impacted or not, their debt still exists. Now we’re working on guiding them through the process and focusing on “It’s okay. We understand. Let’s work with you to get through this.” It’s easy to hear someone’s concerns and say “you don’t have to pay right now,” but we can do more than that for them by discussing their options.

Thank you Cassie for sharing some insight into our training process and for your continued dedication to creating a positive consumer experience with our team. Building a system that supports and educates consumers leads to long-term financial success, and our agents are a core part of that.

Are you looking for a new type of collections solution? Talk to our team today to see how our machine learning engine and our expert agents can improve your recovery rates.

TrueAccord discusses adapting to work-from-home

By on May 21st, 2020 in Company News, Industry Insights

TrueAccord’s Director of Service Operations, Cassie Cox, and our General Counsel & Chief Compliance Officer, Tim Collins, hosted a webinar on May 13th, 2020 to talk through collections continuity in light of the COVID-19 crisis. The team discussed adjusting to regulatory changes, how to effectively manage a work-from-home approach in collections, and what the future of the industry may look like. 

How are federal and state regulations changing?

Federal-level regulatory updates

The pandemic has prompted the US federal government to examine how it can work to aid Americans in need. Following the CARES Act, the House has proposed a new, $3 trillion relief package, and we are likely to see other potential stimulus packages discussed as the Senate proposes their own stimulus plan. Major industry organizations like insideARM and the ACA International are watching these unfold closely, as should we all. 

The Consumer Financial Protection Bureau’s activity has not slowed during the pandemic, and they are on track to meet their examination goals this year. Remote auditing processes are in place and buzzing. They may not be in your offices, but the CFPB’s teams are still actively working to ensure the industry remains compliant.

State-level regulatory updates

Several states, including Massachusetts and New Jersey, are pursuing legislation that directly impacts the ability of collectors to reach consumers. Massachusetts’ Attorney General recently enacted an emergency law that outright banned collections efforts.

This was fought by the ACA, and the law was declared too broad and in violation of First Amendment rights, but the changing playing field does not end there. New Jersey has worked to pass similar legislation which has now been narrowed to primarily impact medical debt collection practices. 

There will also likely be a heightened focus on state budgets and an increase in understanding how to bolster state economies. 

As of this writing, forty-seven US states are either reopening or partially reopening by lifting shelter-in-place orders. Twenty of these state legislatures are now back in session and may begin to make other changes that collectors should keep an eye on. There will also likely be a heightened focus on state budgets and an increase in understanding how to bolster state economies. 

One major change that seems to be for the better is the newfound flexibility for collection agencies and other companies to allow employees to work from home. This behavior is being echoed by Rhode Island’s new “stay healthy” order which has started the reopening process but is strongly encouraging employees to work from home when possible. Collections is beginning to adapt to the changing need, and TrueAccord was able to adapt quickly.

How is collections operations changing?

Maintaining control and information security in a work-from-home environment

TrueAccord’s team began to prepare for potential risk to our operations in early March by reviewing and updating our practices, policies, and procedures to make sure all of our teams could effectively work from home. 

Here are some of the standards we established as we transitioned 80% of our agents to work from home full-time:

  1. Replicate an effective office space
    1. Agents must have a private area in their home and commit to working their shift uninterrupted.
    2. Agents must have a minimum internet speed of 50Mb/s in order to maintain high sound quality on calls.
  2. Enhance work from home agent information security
    1. Agents do not take payments over the phone. All payments are received via IVR or guided through our secure payment portal.
    2. Agents are not permitted to have cell phones near their workplace.
    3. Agents are monitored by their supervisors via webcam with at least two random checks throughout the day. 
    4. Calls are randomly monitored by supervisors to ensure continued commitment to exceptional customer service and quality.

These were only made possible by bringing on new technologies and building processes before we dove in headfirst. We also made sure that all of our agents fully understood these new practices in advance, and they signed off on the policies ahead of time. The 20% of our team members that are still in-office (at safe distances) continue to meet the same standards as the other agents. 

Our contact centers directly support our omni-channel approach to the industry. Here’s information on three other channels we use to reach consumers.

The remaining 20% either opted to not work from home due to a lack of interest or they were not permitted due to their homes not meeting security requirements (e.g. not having a private space, not having a fast enough internet speed, etc.). 

Managing agent performance standards remotely

Call centers are filled with high-energy individuals that are driven by their wins. Maintaining the same hum and energy of an office space without sharing the same space is difficult, and we’ve taken steps to keep our agents excited about their work.

Meet (virtually) Face to face 

A robust virtual management system has been put in place to keep building our team’s connectivity. The webcams we provided to our agents not only help with security monitoring but also increase our ability to build team morale. All of our agents are dialed into (and muted on) a Google Hangout or Zoom meeting throughout the day so that at any point they can turn and see their teammates working hard. 

This practice has also extended to our new management strategy. All of our contact center team meetings are required to be on camera so that we get face time with each other. These meetings include small group meetings, individual coaching sessions, and any other 1:1 meetings as well. 

Encourage conversation

Look for opportunities to create additional team touchpoints. Our current structure includes:

  • Weekly coaching sessions
  • Weekly team meetings
  • Random, weekly 15-minute huddles

We also have a wide range of Slack channels in place for sharing anything from anecdotes to best practices. In an office environment, it’s easy for folks to look over their shoulder and share tips and tricks, and those conversations drive positive change. Slack (and other work chat tools) also provide ways to circulate urgent updates with ease.

Keep the excitement up

We’ve increased our budget for intra-day chachkes, small giveaways, and rewards. Our in-office management style was largely visual: performance trend boards, goal setting boards, and team-based competitions were huge drivers for us. Now, we’re turning to setting up more contests. In this environment, a $10 gift card can get almost as much traction as a $50 card. It’s the thrill of the win, not necessarily the prize itself. Keep the energy up!

Monitor issues closely

The first two weeks of the work-from-home experiment were an amazing honeymoon period. There were three, consecutive days of perfect attendance in our contact center. Typical efficiency metrics like production volume per hour and average handle time have remained consistent. Keeping the same levels of performance is another story entirely, and close performance management is critical to making work-from-home, well, work.

We continue to track month to date metrics and just as closely monitor individual daily performance. Though many of our agents had no issue moving to a home environment, just as with any contact center, the bottom 10% of our group semi-frequently underperforms. It’s more essential now to keep a careful eye on red flags and correct underlying issues immediately. 

The biggest concern was properly tracking things like call or work avoidance or time card manipulation. Thankfully, with all of our systems are aligned and our supervisors actively checking on their teams, the only instance we found was caught immediately. 

Terminating a remote employee

Unfortunately, this is a necessary part of any operations manager’s role. In a work-from-home world, we still want to make it as direct an experience as possible. The full investigation, conclusion, and termination conversation should all be conducted via video conference.

Beyond the human aspect of termination, there are data and security considerations that should be tested ahead of time. Your team should understand how and when data should be cleared from a remote employee’s computer, and systems should be in place for the employee to either drop off or otherwise return their gear. Remember to accommodate for the possibility of lost assets. Some folks, even under contract, may not return your stuff.

What is coming next?

Changes in the office

The COVID-19 pandemic prompted a lot of changes to the way companies operate in general. While it continues to unfold, we are likely to see more change. That said “Right now, maintaining [business continuity] means not changing anything,” said Cox. 

As shelter-in-place rules begin to lift, and we see some employees return to their offices, we will see physical changes:

  • New desk layouts
  • A possible return to cubicles or dividers and a shift away from open-plan offices
  • New air filtration standards for enclosed spaces

Changes in the industry

While the US economy recovers, we expect to see a massive wave of customers that are unable to pay their bills. Unemployment rates will continue to drive payments from slightly overdue to collections, and debt collection agencies and internal recovery teams are likely to struggle to meet the account volume. 

“Collections has long been driven by human capital,” said Collins in discussing the need for contact center agents. “Technology will have to step in and fill a new, higher demand.” He went on to add that alongside the increase in volume, we expect a change in collections mentality. In order to overcome the disparity between payment deadlines and consumers unable to meet them, there will be a rise in customizable payment plans, hardship plans, and digital, self-service tools.

Crises drive rapid evolution and change. Many business practices and technologies that were slowly gaining traction in a pre-COVID-19 world are now fast-tracked. Working from home is a must at the moment, and the collections industry has to embrace that. Moving forward, we’re likely to see new innovators that are reinventing an aging industry, and it’s time for collections to adapt. 

Stimulus check payments surge over tax season trends

By on May 14th, 2020 in Industry Insights

Consumer debt in the US is climbing rapidly. A 1.1% growth to $14.3 trillion in Q1 of 2020 places the total debt higher than its previous peak of $12.68 trillion in Q3 of 2008. This growth may not be directly tied to the pandemic, but it does represent a large problem as a recession looms. Our teams have the ability to see some patterns and trends that arise in our repayment plans and consumer payment habits amidst these changes. Business partners span several verticals, and our data represents a broad spectrum of consumers in debt. 

A (not so) unexpected trend

In a typical year, like many other collection agencies, we see the highest volume of debt repayment when consumers use any tax return to pay down existing debt—February to the beginning of April. This year, however, an unexpected spike in late April and May dwarfed our Year Over Year trend thanks to the CARES Act stimulus checks. 

To put this into perspective, Americans received the first major wave of CARES checks on April 15, 2020. On that day, debt repayment volumes were 22% higher than on February 26, 2020, the first-day that tax refunds were disbursed by the IRS.

The higher volume of payment plans created and money spent were matched by an exponential increase in inbound consumer engagement, both over the phone and through our online portal. TrueAccord wasn’t alone in this trend either. Consumers flooded major debt collection agencies, who saw 2.5 times the inbound call volume and 2 times online traffic compared with a regular April day. TrueAccord’s CEO, Ohad Samet, had this to add:

We are actually not surprised by this. Borrowers that we work with are in a state of financial uncertainty most of the time, so crises like this are unfortunately not far from the norm for them. A sudden inflow of cash like a tax refund or a stimulus check is an opportunity to get on more sound financial footing by paying off debt. 

When they do have money, they go to brands they feel an emotional connection to, and TrueAccord has spent years building a reputation as a trusted partner for consumers in debt. That’s why we’re seeing an unusual surge.

The COVID-19 pandemic has impacted the global economy in unprecedented ways, but there is still some data that helps us understand what consumer spending habits can be expected in a recession. Maintaining communication with consumers affected by the pandemic and helping them to navigate this complex financial crisis is a necessary process.

Options empower consumers to pay when they can

Several states like Nevada and Massachusetts are restricting debt collection practices in an effort to stop collection calls during a time of potential sickness or unemployment.  However, as Samet mentioned, debt collectors regularly encounter consumers who are going through hardships that often lead to their indebtedness.

During times of financial stress, it is equally important that we provide consumers options and tools to manage their accounts as they see fit and when they are able based on their personal situation. As evidenced by the sheer volume of payments submitted in our system after consumers received their stimulus checks, consumers desire to pay down their debts when they have the financial ability to do so. 

There are many resources available for consumers that are experiencing hardships, and we want to empower consumers in debt to get back on their feet.  Kelly Knepper-Stephens, VP Legal & Compliance, explains:

As a collection agency, we can help by providing consumers with the ability to self-serve using tools that offer flexible options including non-payment options, such as options to dispute, apply for hardship, stop phone calls, or unsubscribe to emails. Consumers appreciate the opportunity to make all these decisions when they have the time and ability to do so, which is why it is critical to be able to provide consumers with 24-hour self-service options.  

Empowering the consumer with these choices and with the ability to communicate in the manner they prefer (which may or may not be over the telephone) can bring relief about existing obligations during a stressful time. A lack of options can feel restricting and stressful, and our data supports the power of choice.

Want to see how a digital platform can improve your consumer engagement? Reach out to us for more information!

What is skip tracing in debt collection?

By on May 12th, 2020 in Industry Insights

When a consumer falls into debt, and they are unable to pay off their accounts, debt collectors are brought on board to recover payments on these delinquent accounts. Occasionally, a consumer, feeling they are out of options and entirely unable to complete payment on their account will stop responding to communications from a collection agency. In some instances, breaking the line of communication is entirely accidental. 

If a person moves, and they don’t update a forwarding address, letter-based communications may be completely lost, and with 95% of collection agencies continuing to send letters, this can lead to a massive drop off! Consumers that have accumulated large amounts of debt may be forced to move frequently or are left without a home entirely. These consumers know that their debts will not disappear, so how do you communicate with them to discuss and resolve their account?

What is skip tracing?

Skip tracing is the process of collectors actively locating consumers that owe money on an account. The term comes from the phrase “to skip town,” and can make it seem like these consumers are intentionally abandoning creditors’ attempts to reach them. 

How is skip tracing conducted?

Skip tracing in collections is sometimes necessary to close out these long-forgotten accounts. Skip tracers are dedicated to gathering as much information about a consumer as possible in order to clarify their most accurate and up-to-date information. As more traditional collections methods are shifting to a digital approach so too is skip tracing.

Major names in the finance world like TransUnion and Experian offer powerful, data-driven, digital skip-tracing tools that help update contact lists live. These tools draw from accessible lists of user data to pinpoint consumers that may have updated their contact information elsewhere online including:

  1. Local exchange carrier listings
  2. White pages
  3. Credit files
  4. Other proprietary lists acquired by the company

Some third-party debt collection agencies also retain a dedicated skip-tracing service in order to accommodate these hard-to-reach accounts. Unfortunately, there is a chance that some accounts are simply lost, but by employing proper tools, even in-house collections teams can minimize the number of customers that skip out. 

Another important step in reducing the need for skip tracing all together is to gather consumer email addresses as another point of contact. Over 244 million people in the US have registered email addresses. They are not tied to locations, and most importantly for consumers in large amounts of debt: they are free to open and maintain. 

It is also possible that a customer may intentionally hope to evade a creditor if they feel they are being harassed by aggressive collections techniques or if there are no payment options that work with their budget. Fostering consumer relationships with customers that are past due on their account may seem counterintuitive to some businesses, but creating a positive customer experience should be at the forefront of any collections strategy. 

This extends to offering payment plans to accommodate customers at any point in their customer lifecycle. Working with these consumers proactively to build a plan that they can afford prevents the need for reactive measures down the line. In order to effectively contact consumers in debt, teams must adapt to changing consumer preferences, actively work with their customers, and encourage them to retake control of their finances. 

Using a consumer’s preferred contact channel can go a long way in preventing lost contact. Talk to our team to learn how going digital today helps you tomorrow.

3 things to avoid with in-house collections teams

By on May 6th, 2020 in Compliance, Industry Insights

When more than one-quarter of American consumers have debts in collections it’s easy to see the rising need for any company to have a collections strategy. Working to get a dedicated internal team up and running to collect effectively can be a resource-intensive project, especially for small businesses. 

Creating the infrastructure for a collections team includes building extensive policies to protect your business from compliance violations, carefully training agents (or building incredibly complex digital infrastructure), and hiring collections and recovery experts to support these new efforts.

Once you have the logistics of your collections department sorted out, it’s time to start reaching out to your customers. Here are important things to avoid when you get started.

Wait to start collecting

“Too late” can come all too soon when it comes to recovering on aging accounts. A series of small payments or even a single large payment can cause issues for small businesses, but missed payments—especially in a recession—can pile up quickly for anyone. Avoid getting too far behind (and potentially sabotaging your growing email strategy) and get ahead of the problem.

While you gradually build an internal collections team, you can also consider partnering with a third-party debt collection agency. Having a partner on retainer can prepare you for working with a growing number of accounts as your business expands. These strategies aren’t mutually exclusive either, and you can gain greater insight into the performance of both teams by comparing their respective strategies and methods.

Reveal a debt to a third party

The Fair Debt Collection Practices Act (FDCPA) clearly states that it is illegal to expose an individual’s debt to third parties—including friends, family, neighbors, co-workers, and employers. The FDCPA was established in 1977, and it primarily focuses its regulation toward traditional call-and-collect debt collection agencies (with a team of collectors calling consumers on the phone). 

Though the FDCPA was primarily focused on call-and-collect technologies, its rules still apply to other communication channels. Collectors attempting to call consumers must be wary of leaving voicemail messages that directly state that they are calling to collect a debt due to the potential risk of someone else listening to it. The law regulates how your teams can (and cannot) use social media to get connected with consumers. 

Use confusing or unclear verbiage

Even if you are sending messages directly to a consumer’s inbox you can potentially violate communication compliance regulations. In the case Lavallee vs. Med-1 Solutions, that the defendant (Med-1 Solutions) did not provide the consumer with the required initial disclosures. The consumer received an email and had to click an unknown link and navigate a series of tasks before accessing information related to their debt. The email did not convey any information about the debt, and the court ruled that this series of steps meant that the email did not constitute a “communication” for the purpose of collections.

Any communication to a consumer from a debt collection agency must explicitly state who it is coming from and why (read more on the mini Miranda here), and masking that intent (either purposefully or not) can lead to more compliance troubles. While it is strongly recommended that you borrow metrics from marketing teams to enhance digital communications, be careful with taking too many queues from marketing language. All content sent by TrueAccord’s teams are processed through a legal review before they’re ever sent to a consumer.

As a collector, your first step to reaching your collection goals is having a well-organized team to support your efforts. Collections and recoveries at major companies can account for hundreds of employees, but a new department won’t appear overnight. Remaining careful as you scale your team and their strategy can save you from potential lawsuits and ensure a positive consumer experience. 

Are you looking for a debt collection partner to help answer some questions? Talk to our team today to see how we can help build your digital collections strategy together.

What consumer repayment trends can we expect from a recession?

By on April 23rd, 2020 in Industry Insights

Financial institutions around the world are seeing massive changes to the way consumers are engaging with their finances. The COVID-19 pandemic and the growing recession are also changing the way that consumers are engaging with their debts.

During the 2008 financial crisis, we actually saw that “charge-off rates for subprime consumers increased only moderately relative to pre-crash levels” according to a white paper recently published by 2nd Order Solutions and Boston Consulting Group.1

The recent historic and exponential rise in unemployment rates and the rapid onset of an economic recession, however, also means that there isn’t a precedent for precise predictions. Thankfully, based on current trends and existing data, we can see some patterns beginning to emerge.

Based on a survey conducted by Bankrate, roughly 25% of Americans expect to put their stimulus checks toward paying off a debt, and 50% plan to use their checks to pay monthly bills. TrueAccord’s consumer payment trends support this information. Our teams saw a 120% increase in contact rates as the government deposited consumers’ stimulus checks, and even amidst the crisis, we are seeing a change in the way consumers are approaching their payments.

We’re seeing a shift in consumer preferences toward long-term payment plans, rather than one-time payments. While only 30% of payments made in April 2019 were from payment plans, a year later, we now see a near-even 50% split between plan creation and single payments.

Evolving technology meeting consumer needs

Another trend outlined by Boston Consulting Group’s whitepaper highlights the role of technology amidst a recession. 

“[Financial institutions] with a more sophisticated approach to communication fared better than their peers during the crisis. Multi-channel strategies spanning phone, SMS, and email, underpinned by predictive analytics and integrated data acquisition, are commonly seen at these financial institutions.”

TrueAccord’s digital-first collections strategy is showing us first-hand the power of enabling consumers to manage their own finances, at their own pace, even in a crisis. 

Wnat to learn more about how we’re reaching consumers? Get in touch with our team today!

Citations

  1. Boston Consulting Group, 2nd Order Solutions (2020) Winning in the Next Era of Collections: Preparing collections for a recession

What role does social media play in debt collection?

By on April 8th, 2020 in Industry Insights

Social media in the business world is typically used in a few select ways: individuals that use platforms like LinkedIn to connect with one another, businesses that engage with directly with consumers on platforms’ brand pages, and businesses that place advertisements to reach specific audiences of prospective customers. 

In the debt collection industry, the use of social media is regulated by the Consumer Financial Protection Bureau when used as a channel by which traditional call-to-collect debt collection agencies attempt to reach consumers that they couldn’t reach by phone must comply with the Federal Debt Communication Practices Act (FDCPA) and other state and city consumer protection laws. 

The CFPB’s new debt collection rule addresses appropriate ways to use social media (among many other things), but the rule doesn’t explore the use of social media as a tool beyond private messaging. Social media platforms are very useful tools for digital debt collection agencies and creditors to communicate with consumers but not in the way you might think.

Two things you should not do with social media

Friend request

Sending friend requests to join a consumers’ social network without making it clear that the purpose of your friend request is to collect a debt is a deceptive practice. Businesses attempting to reach a consumer should never attempt to have an agent attempt to secretly infiltrate a personal network in this way.

Instead, if you are going to send a friend request to a consumer, your message should be similar to the Zortman message and make your intent behind the request clear. Beyond that,  and must be a private request (see below on third party disclosure concerns). 

Post on feeds

Posting a debt collection communication on a public-facing account that allows others to see the content of the message on their feed, is an explicit violation of the FDCPA’s prohibition on third-party disclosure. This would publicly expose the existence of that consumer’s debt to anyone who can view the page and is akin to the old (now prohibited) practice of public debtor boards that the FDCPA sought to end.

This doesn’t mean that social media platforms are entirely unusable in the collections space. They can actually prove to be great places to share resources and provide easy access to your team so that consumers can reach you at their discretion.

How social media can help digital debt collection

Directing to support teams

The easiest way to make effective use of social media platforms for your business is to clearly present your company’s website, phone number(s), email address(es), and mailing address(es) online. Increasing visibility and keeping your lines of communication open can lead to greater engagement. 

This is especially important for digital debt collection agencies that make use of payment portals and other online tools as you can guide consumers directly to the answers they’re looking for.

With a public-facing social media account, you will find that consumers will reach out to you with questions—even questions related to their specific accounts. You want to make sure that you are prepared to answer these questions in a discreet but helpful manner so that the consumers get the information they need without any extra disclosures about their debt. 

Consumers expect this ease of access from any business, and it can make an enormous difference in the collections industry that remains largely call-based. Here’s an example of a consumer reaching directly out to our team on Twitter!

The identity of this consumer has been anonymized here, but this is a public-facing post directly on our feed.

Brand Awareness 

Social media platforms offer businesses the opportunity to advertise directly to specific customers based on their online activity. Collections agencies can use social media advertisements to build on brand awareness and help gain customer trust. Providing a hyperlinked statement about your company such as your mission, motto, or BBB rating that will appear in the personal advertising feed is not a collection communication – as long as it does not explicitly address that the consumer is in collections and cannot be shared to their social networks. 

It allows the consumer, if they choose, an easy way to investigate a company’s website, identify your business as legitimate, and gain trust in your brand.

The role of social media in debt collection continues to evolve as legislative bodies more clearly identify how it is currently being used and how those uses overlap with existing legislation. Social media platforms are an omnipresent part of consumers’ lives, and it may seem like an easy way to reach them, but the most important thing to consider is the compliance and security of their information on evolving channels. 

Mastering digital communications is easier when you choose a team at the forefront of the industry. Interested in learning more about digital debt collection? Check-in with our team.

3 key challenges to collecting pre-charge off debt

By on April 7th, 2020 in Industry Insights

Managing accounts and ensuring regular payments is an essential part of being a functioning business. This is especially true for small businesses where several small payments (or one large payment) being past-due can make a massive difference. Many companies will put off hiring a collection agency until they have defaulted accounts rather than creating a partnership at an earlier delinquent stage that can grow as needed.

When it comes to maintaining consistent payments, all parties involved—from the creditor to the consumer—would rather keep accounts up to date than not. When consumers’ financial situations are impacted, and they are unable to make payments for a long period of time, their defaulted accounts are “charged off” and considered a loss by the creditor, and sometimes a partnership with a debt collection agency begins.

This is the model for a large number of businesses, but collections can begin sooner and account balances can be resolved more quickly to the benefit of everyone. So why aren’t more businesses seeking to collect in the pre-charge off world? Here are three major challenges that make managing early-stage (aka pre-charge off) collections more difficult to collect than post-charge off balances.

What is the difference between pre- and post-charge off debt?

In order to understand the difficulties that come with pre-charge off collections, we first have to understand the clear differences between pre- and post- from the creditors’ point of view.

Pre-charge off

As mentioned above, pre-charge off or early-stage debt can include overdue payments, previous payment minimums, late payment fees, and interest. These payments had specific due dates and specific amounts due on those dates which the consumer did not meet.

Consumers that are not able to meet these minimum monthly payments or similar terms are subject to potentially having their line of credit limited, additional interest and fees, negative entries on their credit report, and losing access to the credit altogether. Once a late payment extends beyond a certain window of time (typically six months from the date of delinquency) the account is “charged off.”

Post-charge off

Post-charge off (also known as late-stage collections) is comprised of the total account balance plus any interest and fees accrued after the customer stopped making payments throughout the pre-charge off period. Late-stage payment plans can provide a bit more flexibility in their payment terms.

This is in part because the creditor is unsure as to whether or not they can recover any of the missing payments and because the delinquency has already been added to the consumer’s credit report during the pre-charge-off stage. As long as the consumer sets up a payment plan, a business has little need to pursue further action such as filing a lawsuit.

Some of these differences highlight the challenges posed to companies and debt collection agencies looking to collect early stage payments. 

Minimizing roll rates

The key metric in the early stage collections space is the roll rate of your accounts. Roll rates measure the percentage of accounts that shift from one bucket to the next, typically in 30-day increments (e.g. payments that are 60 days overdue could shift to the 90 days overdue bucket and increase the rate). 

In the post-charge off space, where collection volume is a leading indicator of recovery, it can be easier to judge the efficiency and performance of collections efforts. Pre-charge off work requires faster action because accounts can quickly roll from bucket to bucket. 

The urgency of due dates

Part of the challenge of reducing roll rates is rooted in the more urgent nature of early-stage collections. Accounts that have reached late-stage collections have been overdue for 180 days or more and have already been reported on a consumer’s credit report. 

Pre-charged off accounts can involve collecting payments on accounts 1 or 2 days past due. The longer these accounts go unpaid, the longer they harm the creditor’s bottom line and the longer they can accrue interest, late fees, and negative credit reporting for consumers. An urgency exists for the creditor to remind a consumer of the missed payment obligation and understand if a consumer is experiencing a financial hardship and for the consumer to avoid further delinquency or even default.

Increased call volume

Traditional call-to-collect debt collection agencies that work in the post-charge off world already work to meet enormous contact demands. While digital debt collection agencies and tools can help to dramatically reduce the need for agent-driven call centers, pre-charge off collections requires additional support that benefits from a digital strategy. 

Due to the urgency of early-stage collections needs and the compounding nature of late fees and growing interest, a larger percentage of consumers reach out to discuss possibility of waiving late fees or receiving some one-time relief from their assistance. In order to meet the increased demand for these communications agencies must prepare to scale their teams and systems appropriately and manage rapidly expanding consumer needs.

To eyes outside of the collections industry, collecting debts may appear to be uniform, but adapting to work with both pre- and post-charge off debts takes substantial changes to a company or agency’s infrastructure. Partnering with a company with an established history of effective scalability and growth can smooth the transition and help your business grow.

Interested in learning more about how you can build an early-stage collections strategy? Talk to our team today!

4 ways collections can help consumers in a recession

By on April 1st, 2020 in Industry Insights

Consumer debt in the United States continues to climb into the tens of trillions of dollars, and as unemployment numbers continue to rise consumers are expected to continue to pay for essential services such as rent and utilities, companies are likely to see an exponential rise in delinquencies. All of these things together can cause financial spirals, especially for those already struggling to pay their bills.

In the midst of troubling economic downturn, it is the debt collection industry’s responsibility to remain a financial service and not create more damaging burdens. Here are four things you and your company can do to continue collecting and maintain customer relationships and loyalty even through challenging economic hardships.

Acknowledge the challenge

Communication is key. Your consumers have to know that they are seen and heard. Your mission has to help consumers navigate the challenges they’re facing.

Visitors to TrueAccord’s consumer website immediately see a banner drawing direct attention to the economic crisis. The banner links to a page with resources for those impacted (and available to those who are not impacted by COVID19) helping to answer the most frequently asked questions related to those with upcoming payments and in settlement plans. 

Provide non-collection related communications

Send communications that do not imply the existence of a debt. Do not mention any account, the balance due, or a demand for payment. Instead, provide other resources that can help anyone during this pandemic, like work from home opportunities, childcare assistance programs, and local resources for those in financial distress, including area food pantries and safe shelters. By providing tools that can aid consumers in need of help, you can be a guiding force for overcoming their financial burdens. 

Individuals in debt often need these resources year-round, not just in the middle of a crisis. These can include tools such as budgeting resources, debt payment calendars, or links to job boards for companies still hiring.

You may also consider sharing less direct financial resources such as educational tools that may be especially helpful to individuals seeking to improve their situation and parents hoping to address their family’s needs.

Extend payment plan lengths

One step that creditors can take that is simple but impactful and can help to alleviate financial concerns is to extend the length of consumers’ payment plans. Agreeing to longer payment plans gives consumers more time to pay, creating lower monthly payment rates, and leaving more dollars they can allocate to more immediate needs. 

Machine-learning and artificial intelligence can help to guide meaningful payment plan offerings. Read more about how new technologies are shaping digital debt collection.

Another step allows consumers to defer a payment. For many consumers in settlement arrangements, deferral may provide the assistance they need while not resulting in the loss of the settlement offer. In fact, North Carolina recognized this and passed this emergency law to make sure all consumers in the state have this option for the next 30 days.

Give consumers the power to manage their debts themselves

Implementing digital collections tools into your business can empower and educate consumers. Online portals and payment systems offer thousands of consumers the ease of access that they require of other financial institutions. 

Ideally, digital tools should extend beyond just payment options and should include opportunities for consumers to:

  • Make adjustments to the length and amount of their payment plans
  • Skip or defer a payment without losing a settlement
  • Dispute all or a portion of their debt
  • Apply for hardship pauses
  • Enter bankruptcy information

All without needing to speak to an agent.

The best debt collection practices should prioritize consumers’ needs and enable them to control their finances. It’s critically important to provide consumers with flexibility and the ability to customize when and how they pay.

Many in debt have tight budgets, live paycheck to paycheck, and sometimes are forced to choose between basic needs and paying bills. Leading the collections industry with compassion and empathy for those in need can make a lasting impact on consumers and creditors alike. 

Want to learn more about what we’re doing at TrueAccord and how we can help your consumers? Get in touch with us!

4 reasons companies worry about digital debt collection

By on March 26th, 2020 in Industry Insights

Committing to work with a collections agency can help to reduce the strain of losses on your business. Whether you’re an eCommerce platform with mounting chargebacks, a small lender, or a rapidly growing bank, working with the right collection agency can reshape how you manage delinquent payments. 

Some digital debt collection options also offer self-service products or platforms that allow companies to manage their collections efforts with an internal team supported by powerful, digital tools while other digital companies offer full-service collections.

No matter how you (or your collection agency partner) choose to collect, there are pros and cons to different approaches, and the newness of digital debt collection can create some cause for concern. It’s important to be informed and understand how digital debt collection can help you and actually directly combats many of the risks associated with collections.

“There’s a compliance risk”

Debt collection is a tightly regulated industry and in order to collect debts safely, companies have to conduct extensive training and build processes that adhere to those regulations. This includes federal laws like the Fair Debt Collection Practices Act (FDCPA), the Telephone Consumer Protection Act (TCPA), and any legislation passed through the Consumer Financial Protection Bureau regarding collections practices. Regulations on collections also vary broadly at the state-level. 

With all of these regulations in mind, companies that are beginning their debt collection efforts may be wary of investing in an extensive, internal infrastructure and will instead partner with established third-party debt collection agencies. Several digital debt collection platforms and tools have built-in compliance measures, but they still require internal teams to manage. With the proper systems in place, however, they can be used to great effect as they are coded to align with legal compliance measures. 

TrueAccord’s legal leadership team has been in the industry for decades. You can check out some of our legal advocacy work here and here!

Full-scale digital debt collection agencies take this a step further and are able to provide comprehensive debt collection services with built-compliance software alongside technology experts that manage the product for you. With measurable digital channels taking priority over agent calls, compliance fixes are integrated into every communication, no training required.

“This will impact how we talk to consumers”

Traditional collections agencies are driven by a call-to-collect model of business that leans on agents calling consumers. The collections industry has remained largely unchanged in its practices for decades, but consumer preferences have shifted. It’s becoming increasingly difficult to reach consumers over the phone; in fact, in the State of Collection 2019 report, one industry leader included in the survey said that “right-party contact has fallen off a cliff.” 

Transitioning to digital debt collection from traditional models is easier than you might think. Want to learn more about how easy it can be? Get in touch with us.

In order to meet the growing demand for convenient communication methods, digital debt collection strategies are redefining the industry’s approach to connecting with consumers in debt. While this digital transition will have a lasting impact on the collections industry, companies looking to start or change their collections strategy have the opportunity to work with partners that are embracing the change. 

“Setting up new technology takes time”

Implementing new processes always takes time. Using a traditional call-to-collection agency still requires building a business partnership and sharing debt portfolios for agents to begin working accounts. In the digital debt collection world, implementation can begin quickly and is made easier by uploading CSV files of contact information directly to the online platforms and applications.

Using internal digital tools can also cause delays due to the need for introducing agents and other team members to the system and allocating training time and resources to building infrastructure. Full-service digital-first collections agencies are able to merge the simplicity of starting with a digital strategy with the value of a dedicated team built specifically to manage these new processes. 

“We aren’t ready to bring on a new tool or partner right now”

Timing can be a blocker for any number of company decisions. Collections and recovery may be a year-round function, but teams still see a seasonal ebb and flow in payment rates. Trying to adopt a completely new strategy in the middle of a busy tax season, for example, can feel like a gamble. Or maybe you’re in the middle of a major acquisition or change in leadership and the business’ future is uncertain.

Even in times of change, it’s important to understand that digital collections tools perform better over time than traditional collections agencies. By beginning your digital approach sooner, even with a small subset of accounts, you can begin to compare digital efforts directly to other collections partners.

Comparing digital-first agencies and tools directly to traditional competitors on the market helps to illustrate the power of digital infrastructure on contact rates. The sooner you start, the sooner you can ramp up, and the sooner you can collect. 

Digital debt collection may be new, but that newness only serves to improve existing systems. Companies that depend on traditional collections efforts can see substantial growth in outreach using digital channels, and those that are not yet collecting have more opportunities to get started now than ever before. Future-proof your company’s losses, improve recovery rates, and keep your customers happy all at the same time. 

Connect with our team today to learn more about how digital debt collection is changing the industry for the better.