Category: Machine Learning

Is the Best Debt Collector an Algorithm? 

By on February 20th, 2026 in Industry Insights, Machine Learning, Product and Technology
The blog title set in front of a robot waving.

There are quite a few sitcom episodes where one of the main characters is competing against technology. Whether it’s selling more paper than a website, or automating IT support, the human element in these shows always prevails. In the debt recovery industry, machine learning algorithms have stepped up to challenge humans for the title of best collector. 

At scale, algorithms have many innate advantages for debt collection over human agents. Let’s take a look at how this competition would shake out, the argument for why machine learning algorithms are the best debt collectors and how it stacks up to other technology like chatbots. 

The Benefits of Machine Learning and Algorithms for Debt Collections

One of the core reasons why machine learning algorithms can be considered “the best collector” is because they can process large datasets faster and more efficiently than humans. Algorithms can analyze data of past consumer behavior, learn the nuances of individual accounts, and adjust strategies to improve the collection approach over time. By comparison, it would take a team of humans countless hours to reach the same level of analysis and insight, let alone making the required adjustments at scale.

When data is leveraged to offer personalization at scale, every interaction with a consumer is optimized for engagement. For example, an algorithm could send an email to a consumer first. If that person doesn’t respond, the technology could try a new content template, subject line or even try sending a text instead. The speed at which algorithms can process data allows debt collection strategies to evolve to meet consumer preferences with greater accuracy.

Deployment Speed and Compliance Risk Differences

Human collectors take significant time and resources to train. They often have to go through weeks of onboarding and need to shadow more experienced collectors before reaching out to consumers. An algorithm can often be integrated into existing collection strategies faster to make a lasting meaningful impact. Algorithms solely focus on analyzing data and behavior to optimize collections. It’s technology that has no emotional biases or “off” days that happen to every human being. 

Machine learning algorithms help enable code-based compliance. It helps ensure that all regulatory requirements for debt collection are being met with the ability to run real-time updates for any new rules and case law. This technology eliminates the “human error” factor in debt collection compliance, which reduces risk for businesses across their recovery strategy. 

When a “Human Touch” is Needed in Debt Collection

While machine learning algorithms can automate digital communications and optimize engagement, there are situations where human collectors have an advantage. Consumers with larger debt balances are more likely to prefer a human collector who can work through a more complicated situation with empathy. Even though consumer preferences are shifting more towards digital communications and self-service portals, some consumers will only talk to other people. This fact is part of the reason why it’s important to have an omnichannel collections strategy to help ensure all types of consumer preferences can be honored.

Algorithms vs. Chatbots for Debt Collection

In the debt collection industry, there have been more companies utilizing chatbots in their recovery strategy. The most common application is when a consumer visits the website, an option appears that lets that person talk with a chatbot. However, this form of self-service has some drawbacks that make it less valuable than machine learning algorithms that operate at the heart of the strategy. 

If a chatbot is powered by AI, there’s a risk of hallucinations occurring. When discussing debts, inaccurate information from an AI chatbot could lead to an increase in disputes and expose the business to legal risks. The other option is decision tree chatbots that could have trouble resolving more nuanced questions from consumers. 

The effectiveness of chatbots for debt collection has one big issue: in most cases, the consumer has to visit a company’s website to engage with it. Once a consumer goes to a collector’s website, they’ve already taken a big step towards engagement. Debt collection is often about finding the most effective ways to get a consumer’s attention and prompt action. Chatbots still require the outreach to drive consumers to a website.

AI Voice is Poised to Become a New Challenger

AI voice technology has made huge strides recently. AI voices have the ability to sound human with different tones, speech inflections and more. Even when the use of an AI voice is disclosed, the realism it can now achieve helps consumers get past some hesitancy of speaking to it. In the future, it’s likely that we’ll see more voice AI integrated into omnichannel collection strategies. While complex cases would be handled by human agents, voice AI could handle the more routine calls. This alone could significantly improve the effectiveness and efficiency of collection strategies.

Get High-Performance Recovery Powered by Machine Learning

TrueAccord has a patented machine learning engine called “Heartbeat” that creates a personalized journey for every consumer. If you’re ready to learn more about why many industry experts believe that an algorithm is the best collector, we’re here to help. Contact us today to explore TrueAccord’s full-lifecycle recovery solutions.

Debunking 3 Common Digital Debt Collection Myths

By on February 3rd, 2026 in Industry Insights, Machine Learning, Product and Technology
The blog title set next to an image of a justice scale.

There’s no question that the debt collection industry is in a state of evolution, but one thing that persists, especially with change, is the emergence of myths. As more businesses are turning to a digital collection strategy, misconceptions are naturally going to arise with a new approach that focuses on email, text messages (such as SMS and MMS), and self-service portals. 

Let’s take a look at three of the most common digital debt collection myths, the truth behind them and how a digital-first approach to collections helps businesses. 

Myth 1: Self-Service Reduces Recovery Rates in Debt Collection

Experts agree that it’s likely this myth was born out of the dominance call-and-collect had over the industry for decades. In fact, many businesses still hold the opinion that direct contact from a staff member is the best way to improve recovery rates. The truth is that self-service portals not only improve recovery rates, but they are also preferred by the majority of consumers. 

A 2023 TransUnion data report showed that 60% of consumers prefer self-service options to resolve their debt. Self-service portals give consumers the added convenience of being able to view and manage their debt on their own time. Another study conducted by McKinsey found an increase of 15% for cured accounts after self-service options were implemented. 

The beauty of self-service is that it eliminates the “shame factor” many consumers experience when talking to someone directly about their debt. This comes into play when consumers are making decisions on which bills to prioritize. Roughly 14% of bill-payers identified “the ease of making a payment” as a key factor in their decision-making process. 

Myth 1 Status: Busted – Self-service options DO NOT reduce recovery rates. Your business could actually improve repayment performance by embracing this digital-first strategy. 

Myth 2: Digital Debt Collection Strategies Are Too Expensive

The debt collection industry is leveraging technology more than ever. When businesses see adjectives like “AI-powered”, “automation” or “digital communications”, there’s an assumption that these products and services are expensive. Even when a business is interested in taking a digital-first approach, the process of setting up email, text messages and other channels can seem costly to build from the ground up. 

While there’s always a cost to implementing digital debt collection strategies, the more traditional tactics are increasing in cost as well. For example, the cost of sending physical mail continues to increase, and businesses that rely heavily on call-and-collect often need to hire more staff to scale up collection efforts. A McKinsey report found that embracing a digital-first approach can lower the cost of collections by upwards of 15%. 

There are also collections platforms powered by machine learning like TrueAccord that use consumer engagement data to predict the next best step, making outreach more efficient. This approach paired with meeting consumers in the digital channels they prefer can improve recovery rates and help offset the cost of collections. 

Myth 2 Status: Busted – A digital-first approach to collections has the potential to help businesses recover more. Also, the increased cost to collect and agency fees often associated with traditional strategies aren’t present when the right digital-first approach is used. 

Myth 3: Consumers Find Collections Through Digital Channels Untrustworthy

A CNET survey found that a staggering 96% of U.S.consumers receive at least one scam message a week. There’s been a stark rise in financial scams, and many of these messages come through digital channels. This has led more businesses to think that consumers will likely find any collections outreach through digital channels untrustworthy. While this rationale makes sense, the truth is that many consumers prefer digital communications. 

Digital communication channels are key to omnichannel strategies that put consumers first. An omnichannel collections strategy means using multiple, often complementary channels to contact consumers in their preferred way. One of the key channels is email, which has gone from a “nice to have” for debt collection outreach to a necessity. In fact, surveys show that roughly 59.5% of consumers prefer to be contacted through email first. And when a business reaches out to a consumer through their preferred channel, it can lead to a more than 10% increase in payments. 

While more consumers are turned off to direct phone calls, businesses can still get attention on their device. Around 65% of consumers want their billing, payment and account information sent to them through text. A major reason consumers are gravitating more towards digital channels is because it empowers them to address the debt at their own pace 

Myth 3 Status: Busted – Even though financial scams have made consumers more careful with digital communications, their preferences for those channels still hold strong. By honoring those preferences, debt collection strategies can reach higher performance while improving customer satisfaction. 

See How a Digital-First Approach to Collections Could help Your Business

Even though we covered three of the most common digital debt collection myths, there are plenty more to navigate. By knowing the full capabilities of digital channels, your business can improve its collections strategy. The good news is that you don’t have to figure this out alone. 

TrueAccord is an industry leading debt collection agency that’s powered by patented machine learning to deliver a consumer friendly experience and improve collection results. Connect with our team today to unlock the potential of a digital-first approach.

Anticipating the Trend: How Consumers Use AI for Debt Collection Negotiating

By on November 25th, 2025 in Industry Insights, Machine Learning
A robot working on a computer set behind the blog title.

You might have heard of Rocket Money before. It’s a subscription finance app for consumers that helps with budgeting and tracking spending. One of its core features is negotiating with companies on a user’s behalf to lower the monthly bills of streaming platforms, cell service and more. In many cases, this process uses agentic AI for the negotiation process – a tactic that consumers could adopt for themselves. 

Consumers are already using AI to help make financial decisions. LLM tools like ChatGPT will create a budget, and AI can be used to call stores to check stock and even make purchases. And with GenAI tools being widely available and incorporated into day-to-day tasks, consumers are even using AI to draft emails, scripts and texts to use in debt collection negotiation. 

The industry will see more consumers using the technology more heavily on their end as well.  In this blog we’re going to explore the emerging frontier of consumers using AI for debt settlement.    

Consumers Could Use Agentic AI to Call Debt Collectors in the Near Future

As AI becomes more widely accepted and used, consumers will likely start using AI agents to interact with debt collectors to try and resolve a debt. If consumers start using agentic AI to negotiate debts, there’s logistical and legal challenges that will arise.  

For example, if the AI agent does not identify itself as an AI (which is NOT considered to be current best practice for businesses), questions will arise around who the collector is speaking to and what authority they have.

Even if these AI agents have identifying information for the consumer, such as SSN, phone number and DOB, debt collectors will need to find ways to ensure that the AI is actually acting for the consumer and that it is not a bad actor. 

If a debt collector gets a call like this, it may be a scam. Industry experts say that if AI agents for consumers are regularly used, there has to be a dedicated verification step. This could mean the consumer getting on the phone to confirm their identity, or implementing some type of two-step verification system. Currently, the idea of an AI agent claiming to represent a consumer raises too many core issues for collectors. 

How Should Debt Collectors Treat Consumer AI Agents?

There’s a debate currently going on within the industry on how consumer AI agents should be treated if the trend develops. One view is that the AI should be seen as an extension of the consumer, just like a business’s use of AI is considered an extension of the business. Another is that the AI agent could be considered a third party, meaning the debt collector might not be allowed to share details of the debt. 

As the use of consumer AI agents grows, debt collectors will need to work out internal processes for how to manage these calls. Eric Nevels, Sr. Director of Operations Support at TrueAccord, says that until a legal precedent is set, businesses will need to create policies on whether to treat undeclared AI agents as the consumer or as a third party. 

The Most Popular Consumer AI Debt Collection Negotiation Tactics Used Today

AI agents are still a ways out from mass adoption by consumers. Most consumers using AI to help with debt collection negotiations do so by asking LLMs like ChatGPT, Claude and Gemini for guidance on financial matters or to generate scripts to use when calling collectors to negotiate a debt. Many people don’t feel comfortable negotiating, and LLMs give consumers confidence by arming them with information and making them feel like they have an expert on their side.

The same approach is being used with collection emails and texts as well. Consumers can easily plug in digital debt collection messages into AI platforms to help decide the best way to respond. This makes the messaging of a debt collector’s emails and texts more important. For example, an email that uses aggressive language is more likely to cause an LLM to advise a consumer to dispute a debt. On the other hand, an empathetic message offering options could prompt AI platforms to encourage the consumer to work with that collector.    

Businesses need to be aware that consumers now have the ability to analyze large amounts of their own financial data to help inform what payments should be made to collectors. LLMs have already reached mass adoption by consumers and are much easier to use than a more complex agentic AI. Consumers can now plug in all their debts into AI platforms to get a recommendation on what to pay down first. It’s one of the reasons why businesses need to gain a deeper understanding of AI use in debt collection. 

Ready to Boost Your Collection Efforts with Industry Leading AI?

With more consumers using AI for debt settlement and negotiation, your business needs to provide a digital-friendly experience. TrueAccord uses Heartbeat, a patented machine learning engine that uses dynamic feedback combined with millions of customer interactions to figure out the best way to engage each consumer for better payment results. 

It’s a personalized, self-service experience that honors consumer preferences while driving more engagement. Contact us today to learn more about how TrueAccord uses AI to collect more from happier consumers. 

Are Voicemail Drops in Debt Collection Compliant?

By on November 12th, 2025 in Compliance, Machine Learning
The blog title set in front of a phone getting a voicemail.

Think about the last time an alert pinged on your smartphone for a new voicemail. There’s a small spike of curiosity as you look to see who left the message and what they had to say. The rise of financial scams have made people more hesitant to answer phone calls, leaning on voicemail as a makeshift call screening tool. The result is that consumers these days may be more likely to engage with a voicemail from a business than a direct call. 

Since the notification of a new voicemail grabs the attention of consumers, more debt collectors are using ringless voicemail drops in their strategies. Like many other regulations in the industry, voicemail compliance rules have to be followed by businesses looking to leverage this channel. Let’s take a look at the compliance considerations and best practices for debt collection voicemail drops. 

A Debt Collection Voicemail May Fall Under “Limited-Content Message” Rules

Under Regulation F, the Consumer Financial Protection Bureau’s (CFPB) debt collection rule, a voicemail drop can be classified as a “limited-content message” if certain requirements are met. Limited-content messages are not considered a communication by Regulation F’s interpretation of the FDCPA, and avoid the risk of third party disclosures due to the limited amount of information present in the message. To meet these requirements, the voicemail must include the following:

  • A business name that doesn’t indicate the business is a debt collector. 
  • Ask the consumer to reply to the voicemail message. 
  • The name of one or more natural person(s) whom the consumer can contact to reply.
  • A working telephone number the consumer can use to contact the business. 

Outside of these four essential elements, limited-content voicemails can also include a few pieces of optional information. These include a greeting (like “hello”), the date and time of when the voicemail was sent, suggested dates and times for the consumer to reply and informing the consumer they can speak to business representatives if they reply. To be considered a limited-content message, the voicemail cannot include any other information. 

Unlike digital channels of communication (like email and text messaging), voicemail drops fall under the Regulation F contact cap rules, which prohibit a debt collector from calling a consumer more than seven times in a rolling seven day period prior to a right party contact, or once per a rolling seven day period after a right party contact is made.

Since Regulation F treats voicemail drops as calls, they also have to be sent in a time that is convenient for the consumer, which the FDCPA presumes as a timing window between 8am and 9pm at the consumer’s location. Some states have stricter inconvenient time rules, so it’s important to have tailored compliance accounted for in your strategy. 

Debt Collection Voicemail Compliance & TCPA Consent Rules

Another important set of debt collection voicemail compliance requirements can be found under the Telephone Consumer Protection Act (TCPA). The TCPA requires prior written consent from a consumer before a debt collector uses prerecorded messages and artificial voices. This applies to ringless voicemails because they are typically pre-recorded (and potentially use artificial voice). 

Debt Collection Voicemail Drop Best Practices to Help Your Business Stay Compliant

While sending compliant debt collection voicemails might seem challenging, there are best practices that can help make managing them more streamlined: 

  1. Double Check State Laws: State laws around debt collection are subject to change at a faster pace compared to the federal level. It’s important to regularly check voicemail drop compliance rules for every state your business operates in. The rules and consequences for non-compliance are often stricter at the state level. 
  1. Keep Detailed Records: When your business is sending voicemail drops for debt collection, it’s important to keep detailed records. This includes delivery metrics, opt out requests and the frequency sent to consumers. 

To use ringless voicemails or traditional voicemails in debt collection is a tactical business decision that every business needs to weigh based on their own collections strategy. If your business wants to follow best practices, the right partner can help. TrueAccord is an industry-leading recovery and collections platform that has proven experience in sending compliant digital debt collection messages. 

TrueAccord Helps You Collect More from Happier People

TrueAccord is a debt collection platform that can handle all of your delinquency needs from one day past due to charge-off. Our patented machine-learning engine, Heartbeat, optimizes and improves digital debt collection efforts over time. Learn more about how digital communications can improve your collection efforts by contacting our team! 

*The blog post above is meant for informational purposes only, and does not constitute legal advice. 

The AI Regulatory Landscape Across the States: A Look At States Laws on AI

By on October 27th, 2025 in Compliance, Industry Insights, Machine Learning
The blog title set in front of an image that has a gavel sitting on a circuitboard.

There’s no shortage of federal regulations in the financial industry. However, there’s a noticeable absence of federal oversight when it comes to governance over artificial intelligence (AI). A regulatory vacuum around AI policies has emerged at the federal level, which has ceded the initiative to individual states. This has prompted a specific set of state regulatory models on AI that are pioneering risk frameworks and how they interact with various use cases like AI debt collection strategies. 

The process of navigating the state-led AI legislation and regulations in US financial services is complex, and requires specific industry knowledge. In this blog post, we’re going to dive into why states are leading the charge, and the type of landmark laws and regulations some states are enacting that are going to set the tone moving forward. 

Why AI Regulations Are Being Led By States

Back in July, the current administration released “America’s AI Action Plan”, which is focused on building AI infrastructure with over 90 policies with the goal of being a global leader. AI technology is rapidly being integrated into the US economy and financial services industry. While there have been multiple AI-focused bills introduced in Congress over the past few years (including two new bills in July of 2025), none of them have gained enough traction to get passed. This led to increased tension between federal and state governments, which came to a head once the “One Big Beautiful Bill” was passed on July 4th, 2025. 

Originally, there was a provision in the bill proposing a ten year moratorium on states enacting or enforcing their own laws on AI. This was a top priority for technology companies who were trying to avoid a more complex regulatory landscape, but the provision was stripped in the bill’s final version. Experts agree this move was a clear signal that states are going to be the primary architects of public policy governing AI for the foreseeable future. 

The Federal Stalemate in AI Regulations

One of the root causes for why there’s been federal inaction towards AI regulations is a debate about how the process should look. There is one perspective pushing for a technology-neutral approach, claiming that existing laws are enough to govern AI technology. For example, the existing US laws on discrimination, fraud or defamation already apply to AI technology and businesses, so no new laws would be required. In short, this outlook focuses on punishing bad outcomes from AI rather than trying to regulate the technology itself. 

At the other side of this debate are regulators who want rules surrounding AI technology itself. There has been a wave of state laws and regulations that support this approach with Colorado and California pushing new requirements to address AI. They’re not just retooling old laws, states are creating novel legal categories like deployers and developers of AI and assigning them proactive duties of care. It’s a stance that believes states laws on AI need to have specific and rigorous rules in place to better protect consumers.

The Pioneering State Laws on AI You Should Know

The Colorado AI Act (CAIA)

The Colorado AI Act (CAIA), was the first comprehensive, risk-based AI law in the United States that was enacted in May of 2024. The CAIA created a framework for creators and users of high-risk AI (which many financial applications fall into) to follow. The Act states that developers and deployers of AI technology have a duty of “reasonable care” to protect consumers from the risks posed by the technology. One of those top risks called out by the CAIA is called algorithmic discrimination, which is the unlawful differential treatment by AI technology of an individual or group of individuals that are part of a protected class. 

The duties for developers and deployers under CAIA are met if those parties adhere to these obligations: 

  • Developer Obligations: These makers of AI technologies have to provide extensive documentation on their products. This includes data on how the AI is trained, what steps are made by the developer to prevent bias, what the foreseeable use cases of technology are and more. Developers also have to notify the Colorado Attorney General within 90 days if their AI technology has caused or is likely to cause an algorithmic discrimination. 
  • Deployer Obligations: Deployers (like a company using AI for debt collection), are required to implement and maintain a risk management program. They also have to perform annual assessments of AI technologies and notify consumers of changes being made. Consumers also have the right to correct any inaccurate data being used by AI systems with the right to appeal any decision they don’t agree with by human review.

The Financial Compliance Exception for Colorado’s AI Act

In Colorado’s AI Act, there’s an important provision for the financial industry and companies using AI for debt collection. The CAIA says that financial institutions such as banks, credit unions and insurers are considered to be already in full compliance with its requirements. However, this provision doesn’t provide universal protection. 

This exemption pressures federal agencies and other state banking institutions to develop their own AI governance rules. If they don’t, financial institutions that do business in Colorado could face punitive actions through CAIA. This law is set to indirectly influence the development of national AI regulation standards by creating the bar that other regulators have to meet.

California’s Draft Regulations for Automated Decision Making Technology

Another standout in state AI regulations is California’s draft regulations for Automated Decisionmaking Technology (ADMT). At this time, the draft regulations were approved and will go into effect on January 1, 2026, and they do represent the most consumer rights-focused AI regulations in the US. The regulations are designed for businesses that use ADMT to make important decisions about consumers. The state law definition of “important or significant decisions” includes financial services, lending, debt collection, insurance and much more. 

Since consumer well-being is at the core of these draft AI regulations, California is trying to establish three core rights: 

  1. Right to a Pre-Use Notice: Before a business uses ADMT for an important decision, they have to notify consumers explaining how the AI technology works in a way that’s easy for them to understand. 
  1. Right to Opt Out: Consumers have the right to tell businesses that they don’t want ADMT to be used for making important decisions about them. 
  1. Right to Access Information: Consumers will have the right to request information about the logic being used in ADMT processes. For financial institutions, this means businesses won’t be able to just deploy AI technology into their operations without having a deep understanding of how it works. 

Many experts say that these rights will cause a shift in how financial institutions interact with vendors who provide AI technology. The ability to easily explain the technology will go from being a nice-to-have, to a requirement. It’s likely there will also be an overhaul of risk management for AI technology vendors. Due diligence being done for these partnerships will have to go deeper to ensure that these new consumer rights are being honored.

What Does This Mean for AI Debt Collection?

AI in debt collection continues to increase in adoption because of how it lets businesses better honor consumer preferences while being able to scale. As bellwether states like Colorado and California are setting the standards for other states to follow, the laws and regulations surrounding AI are shaping up to be a patchwork system similar to that of debt collection compliance. 

For businesses that are looking to benefit from using AI in debt collection, you need a partner who’s an expert in compliance and keeping up state law and regulation developments. The state laws and regulations around AI are going to evolve just as fast, if not faster than debt collection rules. Debt collection strategies that are set up to quickly adapt are the most likely to achieve long-term success.

TrueAccord Is Built to Keep Up with Compliance and AI Changes

TrueAccord is an industry-leading recovery and collections platform that’s powered by patented machine learning. Our legal team follows developments in industry regulation updates across the country and maintains machine learning governance models to ensure complete compliance control. 

When the world is changing fast, you want a debt collection partner that has proven flexibility to quickly adjust to new rules and regulations. Contact us today and learn more about how you can collect more from happier people.

Is Cold Calling Dead for Debt Collection?

By on October 1st, 2025 in Customer Experience, Machine Learning, Product and Technology
The blog title set in front of a grave stone with a phone symbol on it.

As a strategy, cold calling for debt collection has plenty of roadblocks like caller ID, spam filters and number lookups that make success difficult. Many experts in the industry are wondering if cold calling is about to enter an ice age because of a feature in Apple’s new IOS 26 update. It’s estimated that there are 130 million iPhones in the US, and many of them are about to have advanced call screening software. 

What does this mean for the debt collection industry? How does this new update work and put more power back with consumers? Join us as we break down this newest barrier to cold calling and what it could mean for businesses looking to maintain or improve their collections. 

How Does Apple IOS 26 Affect Cold Calling?

Before we dive into the industry impact, let’s take a minute to explain how Apple’s IOS 26 update affects cold calling strategies. This software update is giving iPhones 11 and newer call screening software as part of Apple’s push for higher consumer privacy. 

When a consumer receives a cold call, the caller will be prompted to say their name and reason for contacting them. The consumer will see a transcript of the caller’s response on their phone screen. From there, the consumer has the option to accept or ignore the call. By default, iPhones will screen phone calls from unknown and unsaved numbers. The goal of the feature is to protect more iPhone users from scam and unwanted sales calls that have seen a dramatic rise in the last few years. 

Is Cold Calling Really Dead in Collections?

Is cold calling for debt collection really dead? The answer depends on who you ask. Experts in the industry are split into two camps: 

  • Cold Calling is Dead for Bad Calls: Many businesses and experts in the debt collection industry say that the strategy is only dead if it’s not targeted, informed by data and/or compliant. In their view, this update is the death of “bad” cold calling. The new iPhone screening process is also seen as an opportunity for collectors to refine their elevator pitch for more effective cold calls. 
  • Cold Calling is Dead For Good: Others in the industry pose that since so many more consumers now have access to easy call screening, cold calling is no longer viable. They predict that this will be the catalyst for the vast majority of collection strategies moving to digital communications.

To answer the original question, it’s unlikely that cold calling will go away entirely. There will be instances where a cold call is the best chance at reaching certain consumers. Even though it’s not the majority, some people still prefer to be contacted by phone. Cold calling won’t be wiped out completely, but collectors need to consider shifting to an omnichannel approach for effective debt collection.

Why Cold Calling for Debt Collection Is Seeing a Downturn 

Cold calling isn’t dead, but it’s no longer the most effective collection strategy available. There are three core factors that are contributing to the decline of cold calls: 

  1. Consumer Privacy Movement: Consumers want more privacy than ever before. The rise in scams and algorithm data gathering are just some of the factors contributing to this movement. Phone calls are perceived as one of the most personal communication channels, and a cold call often feels like an invasion of privacy. 
  1. Strict Regulations: Over the last few years, the regulations around outbound calls for debt collection have gotten more strict. For example, Regulation F’s 7 in 7 rule prohibits collectors from calling more than seven times in a 7 consecutive day period. It’s increasingly complicated to compliantly cold call customers, and code-based compliance available with digital communications offers less risk for businesses. 
  1. Shifts in Communication Preferences: Most consumers want to be reached through their preferred channels. And 59.5% of consumers prefer email to be the first channel a business uses to contact them. If you contact a consumer through their preferred channel, it can lead to a 10% increase in payments. Consumer communication preferences have already gone digital, and traditional options like phone calls become less popular each year. 

Cold Calling Can Live On in Omnichannel Strategies

Cold calling for debt collection is going to live on, but the strategy needs to evolve and become part of an omnichannel approach. Introducing digital communication channels to your collection strategy helps you engage customers with the right message, at the right time and through the right channel. 

An omnichannel approach gives your collections efforts the ability to service more of your customer portfolio and easily scale if more accounts are added. It’s a more streamlined method compared to using segmentation or propensity to pay models in outbound calling that limit the number of people you’re able to reach at one time. 

Many debt collectors are also shifting to integrate payment portals into their collections strategy. A payment portal gives consumers the ability to schedule payments at their own convenience, which helps improve repayment rates. It also streamlines operations and reduces compliance concerns since agents no longer have to call-to-collect. 

Personalize Your Collections Strategy with an Omnichannel Approach

The process of shifting your collections strategy to an omnichannel approach doesn’t have to be a challenge. TrueAccord’s digital first approach to debt collection can efficiently and compliantly scale to any volume of delinquent or defaulted accounts. Are you ready to maximize your collection results with a digital first approach? 

Contact our team today and schedule your consultation. Together, we can build a personalized experience that leads to better collection results.    

The Importance of Social Proof in Debt Collection

By on September 17th, 2025 in Industry Insights, Customer Experience, Machine Learning
The blog title set in front of a person leaving a customer review on their phone.

It’s common when you put a debt collection company’s name in a search engine, one of the most popular queries is asking if the business is legit. For many consumers, there’s an inherent doubt that comes with receiving a debt collection communication, which often leads to the message being ignored. 

If a consumer gets reassurance from an unbiased source (like another consumer), any doubts about interacting with the company often fade away. This concept is called social proof, and it’s extremely important in the debt collection industry. Let’s take a closer look at the relationship between social proof and debt collection. 

Social Proof Starts with Ethical Debt Collection Practices

The process of having and paying back a debt can be a stressful experience for many consumers, especially when facing financial hardship. It’s an expereince that is more intense and nerve wracking when companies use aggressive collection tactics like excessive calling or threatening. These more forceful approaches are part of the reason why many consumers doubt the legitimacy of debt collection messages. 

The first step in reducing consumer uncertainty is practicing ethical and consumer-friendly debt collection. It’s why more companies are taking an omnichannel approach to sending repayment notifications. Digital communication channels like email and SMS/text give consumers more opportunity to engage with messages on their own terms. When the ask for a repayment is more humane, a consumer is not only more likely to act on it, but share their positive experience with others or online. 

When a consumer sees that someone else had a positive experience with a certain debt collector, it can reduce their anxiety about getting a repayment notification. Oftentimes a few positive affirmations from people in a similar financial situation is the difference between making a payment and ignoring a message. 

Social Proof Can Encourage More Engagement from Consumers

When a consumer receives a debt collection notification, they might feel alone, isolated and unsure of the best way to handle the situation. In fact, this is a common reaction for many stressful events we experience in life. In these situations, many people’s first instinct is to seek advice from others who can relate to their circumstances. For example, if they hear from another consumer that the process of making a payment was easy, engaging with the notification doesn’t feel as intimidating. 

Debt collection companies themselves can also offer consumers social proof. A great way to do this is by providing insight into how other customers handled their financial obligations. If your business sends an email notification to a customer, you could offer examples of how other customers with a similar balance chose a payment plan to resolve their debt. A subtle tip on how others in their situation took action can increase the likelihood of that customer making a repayment. 

The connecting thread between both these instances of social proof aren’t phrasing things as a demand, they’re suggestions backed by the experience of peers. That’s the core of social proof that can increase repayment rates and build trust with consumers. 

Social Proof Helps to Humanize Debt Collection

Social proof has the power to turn the perception of a debt collector from an intimidating unknown to a partner that helps people with financial wellness. By putting this notion into practice, debt collectors can improve their reputation with consumers. What does this look like in action? Here’s a few ways debt collection companies can bring this to life: 

  • Leverage AI in Debt Collection: AI can be used in debt collection to create a better experience for consumers. Machine learning platforms can figure out the best way to honor each individual customer’s communication preferences. These AI processes help make the customer feel more valued, improving the likelihood they will share their experience. 

It’s important that all social proof strategies being used by debt collectors follow legal guidelines and don’t overstep on customer privacy. The power of social proof is its honesty, transparency and ethical use. When it is used responsibly and paired with other strategies like leveraging AI in debt collection, social proof can improve recovery rates. 

Boost Recovery Rates with AI Debt Collection Strategies

Social proof and AI debt collection strategies are a great way for businesses to collect more from happier people. If you want to empower your debt collection solutions with machine learning and a consumer-first mindset, TrueAccord is here to help. 

Contact our team today to learn more about how we can handle all your delinquency needs.     

How Student Loan Debt is Impacting the Debt Collection Industry

By on August 8th, 2025 in Industry Insights, Customer Experience, Machine Learning
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The path to getting a higher education is a courageous decision that millions of Americans start each year when attending college. It sets the foundation for countless careers and drives personal growth that lasts a lifetime. However, education is expensive and paying back the loans can be challenging—an estimated 5.8 million student loan borrowers have delinquent accounts. 

This number could get even higher with student loan forgiveness ending, interest on the debt resuming and shifts repayment options. Student loans and debt collection servicing have always shared a close relationship. And the current changes to the federal student loan system is primed to send shockwaves through debt collection services across the nation. 

Learn how student loans have changed in 2025 and trends your business needs to look out for as the situation continues to evolve. 

How Student Loans Have Changes in 2025

Before we dive into the implications for the debt collection industry, it’s important to understand some of the key changes recently made to federal student loans. The current administration signed into law the “One Big Beautiful Bill Act” on July 4th, 2025. This legislation overhauled the student loan system: 

  • Student Loan Forgiveness Paused: Borrowers on SAVE plans are seeing the end of payment forgiveness. Right now, payments are required and accruing interest on loans restarted on August 1st, 2025. 
  • Creation of Repayment Assistance Plan (RAP): RAP is an income-based plan for new borrowers that requires a minimum payment regardless of a person’s income level. This plan will only be approved for cancellation after 30 years of qualifying payments. 

Student Loans and Their Impact on Debt Collection 

One of the biggest and most immediate effects that student loans will have on debt collection solutions is a surge of collection activity. With loan forgiveness paused, the millions of delinquent accounts are going to be subject to collection efforts. To start, the federal government is putting increased focus on accounts that are 60 days or more delinquent. 

This means that standard debt collection communications channels like phone calls and physical mail are going to be much more crowded for the foreseeable future. It’s also likely that some customers your business talks to have this type of financial obligation. That means no matter what debt type you’re collecting, there is more competition to get their attention through non-digital channels and less funds available to repay debts. 

We Could See An Increase in Involuntary Collection Tools 

When a consumer defaults on their student loan debt, the federal government has strong tools to help them collect payments. After 270 days pass without a payment being made, the government can garish up to 15% of the borrower’s paycheck. Any federal tax refunds can also be withheld and applied to the loan. 

Any student loan accounts that are in delinquency or have defaulted can also be reported to national credit bureaus, causing damage to the borrower’s credit score. Consumers who are going through this process may be less likely to make payments on other debts while they try to keep up with student loans. The common thread is that more student loan borrowers could have reduced disposable income once all the changes take effect. 

New Student Loan Rules Could Lower Credit Scores 

Experts agree that the new student loan rules have a strong possibility of lowering credit scores for existing borrowers. Since the payment forgiveness that started shortly before COVID is ending, borrowers will likely need time to make payments as other costly necessities (like the rise of grocery costs) take their attention. 

It’s possible that this will have widespread effects on consumer credit scores, making it more difficult for these borrowers to participate in the financial system. Specifically for student loans, a lower credit score makes it harder for borrowers to consolidate the debt at an affordable interest rate. 

A lower credit score also makes it more difficult to access new lines of credit, a common tactic consumers use to pay off debt. Borrowers with a lower credit score will get higher interest rates on new loans, making it more expensive to get loans and more likely that payments made on debts will be in smaller amounts. To help navigate this challenge, debt collection services that offer consumers more payment options could have greater success.  

Increase Your Collections Performance with an Industry Leading Platform

Student loan debt is primed to have a lasting impact on debt collection solutions. If you want to leverage AI that adapts to these situational challenges to collect more from happier people, TrueAccord is here to help. 

If you want to empower your debt collection solutions with machine learning and a consumer-friendly digital experience, contact our sales team today.   

Q2 Industry Insights: Reconciling consumer, economic indicators and embracing AI

By on July 29th, 2025 in Industry Insights, Customer Experience, Machine Learning
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Despite economic uncertainty, Americans continue to spend, albeit what they’re spending on has shifted. After two consecutive months of reduced spending, consumers came back in June with purchasing focused heavily on necessities like clothing and personal care, rather than electronics or appliances. Discretionary spending also stayed strong on restaurants and bars, indicating that while consumers are feeling some amount of pressure from the economy, it hasn’t really hit their wallets just yet. But economists and key indicators are foretelling more financial challenges ahead, so consumer sentiment may not be keeping up with reality.

The debt collection industry is navigating a period of transformation via a combination of regulatory shifts, technological advancements and evolving economic pressures. Key developments continue to reshape collection strategies, compliance requirements and the tools used to recover outstanding debts. As you protect your bottom line in a rapidly evolving consumer financial landscape, let’s look at what you should consider as it relates to debt collection with an eye toward the second half of 2025.

Key Economic Indicators

After several months of speculation and fluctuation, inflation is starting to heat back up, potentially showing the first impacts of tariffs and signaling what’s ahead. Consumer prices rose 0.3% in June after rising 0.1% in May, pushing the annual CPI inflation rate higher to 2.7%, the highest since February. The increase was driven by higher gas prices and a broad assortment of goods showing the effects of businesses sharing higher import costs with consumers.

On the jobs front, the economy added 110,000 jobs in June. Looking at the number of jobs added through the first part of the year shows an average of 124,000 jobs per month, which is significantly lower than last year’s monthly average of 168,000. With layoff activity relatively low and wage growth remaining decent, economic uncertainty has slowed the pace of hiring and created a somewhat stagnant employment market.

The Federal Open Market Committee held rates steady at 4.25-4.50% at their meeting in mid-June, and Wall Street economists are predicting the central bank to continue their wait-and-see approach at their next meeting in July given June’s reported CPI and expected PCE inflation increases. Bets are now on a September rate cut if the inflation threat cools and the jobs market weakens more noticeably.

The Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit for Q1 2025 showed that total household debt in the US reached $18.20 trillion, a $167 billion or 0.97% increase from the prior quarter. This growth was primarily driven by increases in student loan and mortgage balances, while credit card and auto loan balances decreased. The report showed delinquency rates rising, with 4.3% of outstanding debt in some stage of delinquency, the highest level since the beginning of 2020.  

Mortgage loans experienced a significant rise in early and mid-stage delinquencies across all credit categories in May. Mortgage delinquencies increased to 1.03% from 0.92% the previous month, suggesting that the housing market might be showing initial indicators of financial strain among homeowners.

What’s Impacting Consumer Finances?

Just as more student loan delinquencies are reported and sent to collections, borrowers who had previously been granted an interest-free forbearance period under the Saving on a Valuable Education (SAVE) Plan will lose those benefits. On August 1, the administration will resume interest charges on the accounts of around 8 million borrowers as the SAVE program and several other income-driven payment options end. Overall, the change will see borrowers being charged more than $27 billion in interest over the next 12 months, which will have wide repercussions on students and families.

And in a reversal of a move by the Consumer Financial Protection Bureau (CFPB) earlier this year, a federal judge recently blocked a rule that would have removed unpaid medical debt from the credit reports of about 15 million consumers who carry a total of roughly $49 billion in medical debt. This financial burden could influence creditworthiness and access to loans for many.

What’s Impacting the Debt Collection Industry?

On the federal level, the CFPB has announced a new set of supervision and enforcement priorities for 2025. The bureau intends to reduce the number of its supervisory exams, focusing instead on cases of tangible consumer harm and actual fraud. While this may mean fewer routine audits for collection agencies, it signals more intense scrutiny on practices that directly and negatively impact consumers, with a continued focus on areas including mortgages, credit reporting, and FCRA and FDCPA violations.

In June, the CFPB also published a policy statement in the Federal Register outlining its approach to addressing criminally liable regulatory offenses under statutes including the Consumer Financial Protection Act and Truth in Lending Act, among others.

In efforts to enhance efficiency, the debt collection industry is rapidly embracing new technologies, and artificial intelligence (AI) and digital communication platforms are at the forefront of this technological wave. AI is being leveraged more widely to personalize consumer engagement, predict payment likelihood, and optimize collection strategies. Meanwhile, digital channels like Rich Communication Services (RCS) are gaining traction as innovative methods for consumer contact, offering more interactive and self-service options.

However, the use of technology and collection tactics remains under the watchful eye of regulators. In a significant enforcement action in June 2025, the Federal Trade Commission (FTC) secured a permanent ban against a debt collection operation found to be using deceptive and harassing methods to collect on “phantom debts.” This action underscores the agency’s ongoing commitment to cracking down on illegal collection practices and serves as a reminder to the industry of the severe consequences of non-compliance.

How are consumers feeling about their financial outlook?

In analyzing consumer sentiment, it’s important to note that the following surveys relay responses may have been taken before the latest inflation figures were released, so there may be an incongruity in reporting. 

The Fed’s June Survey of Consumer Expectations showed that households’ inflation expectations decreased at the short-term and remained unchanged at the medium- and longer-term periods. Unemployment job loss and household income growth expectations improved while spending growth expectations slightly declined. In general, households were more optimistic about their year-ahead financial outlook.

The latest University of Michigan consumer sentiment survey, reporting from mid-way through July, showed that Consumer sentiment ticked up about one index point to 61.8 from June, reaching its highest value in five months, but still 16% below December 2024 and its historical average. Expected personal finances fell back about 4%, with the report noting that consumers are unlikely to regain their economic confidence until they feel assured that inflation is unlikely to rise.

The Conference Board’s Consumer Confidence Index deteriorated by 5.4 points in June, falling to 93.0 from 98.4 in May. The report showed less positivity about current business conditions and job availability, as well as more pessimism about business conditions, job availability and income prospects over the next six months.

What Does This Mean for Debt Collection?

The debt collection industry in mid-2025 is at a pivotal juncture, tasked with balancing the adoption of powerful new technologies and navigating a challenging economic environment while adhering to an evolving regulatory framework. The ability to adapt to these concurrent trends will mean success for businesses in this sector. For lenders and collectors, here are a few things to keep in mind:

  1. Consumers expect more in debt collection. Gone are the days of debt collection letters or calls from unknown numbers eliciting a productive response. Now, consumers want empathy, understanding and convenience in their financial matters. Keeping up with consumer expectations can mean the difference between collecting debt and not.
  1. Self-service is one of those key expectations. Convenience by way of self-serving is a win-win for your business and consumers. Offering a comprehensive self-serve portal means consumers can engage whenever they want (even outside traditional FDCPA-regulated hours) and reduces resources needed to manage accounts and process payments.
  1. Ready or not, AI is here. Technology is already transforming debt collection by changing the way lenders and collectors engage with consumers, and if you’re not getting on board, you’ll find your business soon left behind. The time to thoughtfully adopt AI is now. Not sure where to start? Here are the must-know tech terms to get you going.

SOURCES:

One Size Doesn’t Fit All in Debt Collection

By on July 25th, 2025 in Customer Experience, Machine Learning, Product and Technology
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What if there was an ice cream shop that only sold vanilla? Just one flavor, offered in one size without any extra options. How much business do you think this shop would get? We know that it’s probably not a profitable business model because it contradicts one of the most important trends seen across countless industries – honoring customer preferences. 

In the debt collection industry, there’s a lot of businesses out there practicing the “single flavor” or one-size-fits-all approach. Customers only get sent notices through one or two communication channels and have a single type of payment option. 

Debt collection solutions shouldn’t be one-size-fits-all. If you’re interested in learning how to improve the debt collection customer experience, it starts with finding ways to accommodate more preferences. 

Why Isn’t Personalization More Common in Debt Collection Solutions?

It’s no surprise that consumers have personal preferences that impact their engagement with businesses. One of the most important preferences is how they want to be contacted. While phone calls used to be the go-to method for debt collection, in today’s digital world any unknown number is usually automatically labeled as spam in a person’s mind. 

In the debt collection industry today, there’s no shortage of communication channels. So why do so many debt collection companies go for a one-size-fits-all approach through a more outdated method like phone calls or physical mail? There’s a few challenges that can help explain it: 

  • Content Library Creation: The process of building and managing an extensive digital content library for debt collection isn’t easy, especially given compliance requirements for all the different channels like email, text, self-serve portals. This process requires writers and content experts who understand debt collection solutions and the pain points consumers experience.
  • Lack of Resources: Many debt collection companies lack the resources to build out the strategy and operations for multiple or digital channels.  
  • Not Leveraging AI: Without AI and machine learning, it’s much more challenging to figure out what type of content and channel resonates with each individual and implement customized communications at scale

Just like the scenario we listed above, only offering “one flavor” usually leads to less effective debt collection solutions, lower performance and unsatisfied consumers. 

Improve the Debt Collection Customer Experience with Personalization

The main reason to take a personalized approach to debt collection solutions is to help more consumers repay debts and reach greater financial health. To do that, consumers need to engage with debt collection messages. For starters, 46% of consumers expect companies to reach out to their preferred channels. When this happens, companies see a 10% increase in payments from delinquent customers. But preferred channels aren’t the same for everyone.

With financial matters (including debt collection and bill notifications), people increasingly prefer digital communication channels. In fact, 59.5% of consumers list email as their first contact choice for communication from a company. When you meet someone’s expectations, payment reminders are more likely to be noticed and acted on. While honoring a consumer’s preferred channel is important, it’s not the only customization that can make an impact. 

Customizing Content Gets Results

It’s common for debt collection companies to have a few sets of communication templates, but the content itself doesn’t change much. But with an eye toward data-driven changes and testing, there’s always an opportunity to adjust content to catch attention and better engage consumers. 

For example, TrueAccord had a client that wanted to improve the performance of debt notification emails. The TrueAccord team created emails that included animated GIFs, an idea supported by machine learning data. This strategy led to a 6% increase in click rates and a happy client that became excited about future tests.

The best debt collection solutions treat content as a living strategy. That means updating content templates on a regular basis and testing new ideas to keep up with shifts in customer preferences. One crucial element that makes this possible are AI tools that measure effectiveness and ensure the content is compliant. 

Personalization is Better with an Omnichannel Approach

An omnichannel approach to debt collection solutions means leveraging a combination of communication channels for consumers to engage with. Every channel like email, text, self-serve portals and more are integrated into a consumer-centric approach. These channels work together to uncover the best option for each individual. 

Beyond simply adding digital channels, companies need to adopt a customized omnichannel debt collection approach to engage consumers through preferred channels. At TrueAccord, this is achieved through a patented machine learning engine called Heartbeat. Consumer engagement with Heartbeat is automated and optimized by data-driven algorithms that decide what timing, message and channel will be most effective for each individual person. 

By finding the right timing, message and channel, your debt collection solutions won’t just help more consumers engage in debt repayment, but you’ll recoup more in a cost-effective way. 

See What TrueAccord’s Debt Collection Technology Can Do

Does your business want to collect more from happier customers? At TrueAccord, we use AI tools to offer a personalized and self-serve experience that honors consumer preferences. To learn more about our industry-leading results, connect with our team today!