Category: Product and Technology

The Low Friction Way For Consumers to Repay: Self-Serve Options for Debt Collection

By on October 7th, 2024 in Compliance, Customer Experience, Industry Insights, Machine Learning, Product and Technology, User Experience

After months of inflation woes, both economists and consumers are starting to see a glimpse of optimism.In the first interest rate cut since the early days of the Covid pandemic, the Federal Reserve announced in September 2024 that it is slicing half a percentage point off benchmark rates. So it’s not surprising that Americans are getting more confident that inflation is cooling off, but optimism for the U.S. economy doesn’t extend to personal finances—consumer expectations for going delinquent on their debt in the next three months hit their highest level since the start of the pandemic.

And the share of severely delinquent credit card debt rose to 10.7% during the first quarter of 2024, according to the Federal Reserve Bank of New York, compared to just 8.2% of credit card debt more than 90 days overdue in 2023.

But better customer engagement strategies can help businesses recover more debt—and self-serve portals are an empowering way to get consumers back on track.

What is a “self-serve portal” in financial services and collections?

In the financial services sector, a self-service or self-serve portal is a secure online platform or application designed to empower consumers to make payments and, ideally, allow them to manage their accounts and payment terms independently (although not all portals offer the same functionality). Self-serve portals aim to grant customers the ability to manage their finances without the help of a service representative.

For both businesses and consumers, reducing the need to engage directly with human agents to make payments or access account information saves time and resources. Overall, these self-service solutions represent a shift towards greater consumer control over their financial health, providing an efficient way for individuals to address and manage their finances—and debts specifically—on their own terms.

What are the benefits of offering self-service options in debt collection?

Similar to any other financial institution or ecommerce business, self-service portals in collections intend to foster a sense of autonomy for the delinquent consumer to manage their debt without the pressure or inconvenience of interacting with a call center agent. Besides creating a more preferred experience for the consumer, organizations needing to recoup funds will reap several benefits by providing self-serve options as well:

Cost Savings:
In today’s digital world, call centers or full-time employees (FTEs) dedicated to late-stage collections have proven to be an expensive and less effective path for debt recovery. Employees often spend a significant amount of time arranging repayment plans, providing account details, and processing payments—and that’s if the consumer actually answers the collector’s call. So when it comes to cost savings, just consider this: the average cost of a contact center call is $8.01, which is 80x more expensive than a self-service interaction.

Scalability:
Unlike human agents who can physically only make a certain number of calls per day and are legally only allowed to call consumers during convenient hours (as defined by Regulation F), self-serve portals are available to consumers 24/7. These platforms can handle any number of collection cases at any time of day without compromising user experience, making it easy to scale your capacity as delinquency volumes rise—no additional headcount required.

Compliance:
Non-compliance can be costly in the collection landscape heavily regulated by the Consumer Financial Protection Bureau (CFPB). Whether partnering with a third party or training FTEs, the risk of human error resulting in compliance violations is easily mitigated with digital self-serve solutions that have compliance controls built in—but this does require due diligence on the business or lenders’ part to ask and verify that the solution is keeping up with all necessary regulation and industry security standards.

Frictionless Consumer Experience:
Surveys have found that consumers both prefer and want more self-serve options to repay, but that is just the tip of the iceberg of what consumer preferences can mean for your recovery and resolution rates. Research from McKinsey found consumers who digitally self-serve (versus consumers who pay via a collection call):

  • Resolve their debts at higher rates 
  • Significantly more likely to pay in full 
  • Report higher levels of customer satisfaction

Proven Success with TrueAccord’s Self-Serve Portal

While many financial service institutions already offer basic payment portals, these are often limited when it comes to collecting on delinquent accounts. And traditional call centers typically cannot provide self-serve options, even if they can offer other digital options like email or SMS for consumer outreach.

But TrueAccord provides more than a simple payment portal—the power of our self-serve solutions gives your business and your consumers better control over the repayment process for better results.

TrueAccord delivers less friction and frustration for delinquent consumers ready to manage their debt, while your organization determines the extent of account details to display, what flexible payment options you’d like to provide, and more.

In fact, 98% of delinquent consumers serviced by TrueAccord resolve their debt without any human interaction, with 29% of online payments made outside of traditional FDCPA hours—saving time, resources, and headcount while meeting consumer preferences compliantly under Reg F’s inconvenient time rule and beyond.

Want to take a peek at TrueAccord’s Self-Serve Portal? Download our free eBook for more details and a visual walkthrough of the consumer experience when using our portal here»»

Ready to see a demo in action and learn more about all of TrueAccord’s omnichannel, machine-learning powered collections? Schedule a consultation today»»

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Client Success Story: Online Lender Achieves 30% Better Late-Stage Collection Result Through Empathetic, Omnichannel Approach

By on September 12th, 2024 in Client Success Story, Customer Experience, Product and Technology, User Experience

TrueAccord proved more effective for late-stage collections and better aligned with online lender’s empathetic approach to financial services.

For one online lender, providing online personal loans to underserved consumers was not only a core service for their business but also a key part of their company mission. This tech-enabled financial platform offers safe, simple, and affordable credit access to consumers with varied financial histories who lack traditional options, emphasizing empathy and support in their customer interactions.

Historically, the online lender relied on legal avenues for debt collection, a tactic not always in line with the empathetic approach the company championed in their other services. While they wanted to improve their liquidation rates, the lender recognized they needed more of a traditional agency along with their existing legal strategy—but the challenge was to find a collection agency that could balance effectiveness with a consumer-centric approach that could mirror the lender’s empathetic mission throughout the borrower lifecycle. Simply adding a call center-based agency would be counter-intuitive for an online lender with digital and omnichannel collection partners available to provide a smoother customer experience.

During their due diligence looking at potential debt recovery partners that have integrated digital into the consumer communication mix, a new question arose: how would they decide between the newer, digital-focused agencies that have entered the collections space?

Enter the champion-challenger evaluation method pitting TrueAccord against another digital collections provider.

Over a six-month period, the online lender evenly split their available late-stage collections market share 50/50 between TrueAccord and the competitor agency. Although the challenger collection agency provided somewhat similar services for consumer engagement by including some digital outreach along with traditional outbound dialing and letters, TrueAccord’s robust omnichannel approach was backed by over a decade of experience using digital-first communication methods.

And the results would prove that TrueAccord was not only superior in effectively collecting from late-stage accounts, but also in overall mission alignment with the lender’s efforts towards a more empathetic approach to financial services. Even before the online lender began to explore options for collecting on late-stage debts, both the lender and TrueAccord shared a focus on helping consumers; and by partnering together, they were able to provide that consumer-centric approach to financial services throughout the entire borrower lifecycle.

TrueAccord consistently outperformed the challenger to the point where it became clear that the lender was actually losing money by continuing to give 50% of their available market share to the competitor. In fact, over time, TrueAccord’s liquidation rates were 30% higher than that of its competitor.

Together, TrueAccord not only enhanced and improved the lender’s debt recovery efforts but also reinforced their company values to deliver empathy even after delinquency—no small feat in the traditional debt collection industry.

Discover the TrueAccord difference that helps clients achieve better liquidation rates and happier consumers in the full, in-depth case study available for download here»»

Are you ready to evaluate your legacy collections servicer against TrueAccord’s proven digital-first, omnichannel approach? Schedule a consultation today!

Digital-First Debt Collection Delivers 35% Liquidation Increase for Leading Telecoms

By on May 1st, 2024 in Customer Experience, Data Report, Industry Insights, Product and Technology, User Experience

Telecom Industry Evolves, But Call-and-Collect Can’t Keep Up

The telecommunications industry has evolved hand-in-hand with most consumer communication preferences throughout the decades. From the last remaining landlines to mobile and internet services, it’s challenging to find a consumer that doesn’t subscribe to a Telecom service.

Yet while Telecoms enable customers to communicate and access products and services via digital channels wherever they go, the industry’s own methodology for communicating with consumers who have fallen delinquent on their bills is quite antiquated for the modern world they operate in.

Many Telecoms have traditionally used call centers for collection services to collect charged-off debt, but face mounting challenges all contributing to less revenue:

These challenges are not unique to telecoms, but considering the evolution of the industry it would only make sense that their debt collection practices would also adapt to consumer preference for digital and omnichannel communications.

Future-Facing Digital-First Solutions Deliver Real Liquidation Results

For some of the leading Telecom providers in the US, the time had come to face the declining third-party liquidation performance and reevaluate their debt recovery approach. A more future-forward, effective engagement model was being adopted throughout other industries and it was time for these Telecoms to test the waters of digital-first outreach for late stage collections…and TrueAccord was there to be their guide.

Through a champion-challenger model during the six-month pilot, TrueAccord’s digital-first, omnichannel engagement proved to be more effective at recovering from the late stage accounts. Between multiple portfolios across three Telecom providers, the results tipped the scale so moving forward all accounts would be serviced entirely through TrueAccord’s platform.

Each of the Telecom providers saw notable increases in liquidation using TrueAccord compared to their traditional call-and-collect methods:

  • First Telecom: 35% increase
  • Second Telecom: 7% increase
  • Third Telecom: 32% increase

How did TrueAccord’s digital-first approach deliver these kinds of results? Get the detailed breakdown in our in-depth Telecom case study»»

Are you ready to evaluate your legacy collections servicer against TrueAccord’s proven digital-first, omnichannel approach? Schedule a consultation today!

TrueAccord’s Digital-First Engagement Out-Performs Call-and-Collect for National Bank’s Late-Stage Debt Recovery

By on February 7th, 2024 in Industry Insights, Product and Technology, User Experience

After three decades of providing exceptional customer experience, a leading national bank recognized a lot has changed in the world of personal banking, technology, compliance, and, in turn, debt collection. To continue delivering the level of service their customers expect meant it was time for the bank to update their recovery methods for the new digital age.

Although the bank had seen moderate success in late-stage collections with their call-and-collect vendor, they had a list of goals that they were unsure their existing collection provider could achieve:

  • Improve and increase liquidation performance
  • Keep up with new regulations and ensure compliance
  • Leverage new, more cost-effective solution

But what was the best way to evaluate the effectiveness of new digital-first engagement versus their existing outbound calling approach?

To test and measure the success of each distinct debt recovery method, the bank decided to use the Champion-Challenger model with TrueAccord joining their existing collections partner.

For their Champion-Challenger test, the bank assigned TrueAccord 50% of primary placements and tertiary placements against their traditional collection provider. By using scorecards, the bank was able to compare the two using set collection goals (varying by month and season) and several key performance indicators (KPIs), including:

  • Overall liquidation rates
  • Percentage of settlements in full
  • Percentage over/under set collection goals

With the Champion-Challenger model in place, collection goals and KPIs designated, and scorecards set, it was time to see how TrueAccord’s digital engagement methods would measure up compared to the old school call-and-collect method…and the numbers would speak for themselves.

Download the full case study to get an in-depth look at:

  • How TrueAccord won 100% of the bank’s primary placements
  • Why the Champion-Challenger model works so effectively for optimal debt recovery
  • What KPIs were used to compare call-and-collect vs TrueAccord’s digital engagement

Download the case study here»»

Ready to improve your collections communications using TrueAccord’s proven digital-first engagement approach? Schedule a consultation today!

Declining RPC Rates, Rising Consumer Complaints: Why Outbound Calling for Debt Collection Won’t Work in 2024

By on January 31st, 2024 in Customer Experience, Industry Insights, Product and Technology, User Experience

If your business plans to use outbound calling as the main mode of engaging past-due customers in 2024…good luck.

Good luck reaching the right number for the target customer.
Good luck getting them to commit to repayment over the phone.
Good luck not getting complaints.

And if the plan is only to use outbound calling…be prepared to start accepting more losses in 2024. Even if you can get the right customer on the phone, studies show 49.5% of consumers take no action after a collection call.

Let’s look at the challenges around right-party contact rates, consumer complaints, and the timely factors that make the challenges more detrimental to your business’s late-stage debt recovery.

Declining RPC Rates

The decline of right-party contact rates (RPC)—the percentage of calls in which an agent is able to connect with the target consumer—isn’t new for 2024, but its impact on debt collection is reaching new heights in the new year. RPC is considered one of the most accurate measurements for the effectiveness of an organization’s outbound calling efforts, whether internally or through a third party.

Surveys from the Association of Credit and Collections Professionals (ACA International) found that 62% of the respondents reported seeing a decrease in right-party contacts, with 78% of the respondents experiencing call-blocking and 74% having their calls mislabeled.

Call-blocking and spam-mislabeling are only part of the issue for RPC rates: government regulations, robocalls, lack of consumer trust in answering calls, and inaccurate phone data all contribute to the drop in RPC rates.

The bottom line is the declining RPC rates are negatively affecting your business’s bottom line—but that’s not the only challenge outbound dialing for debt collection faces in 2024.

Rising Consumer Complaints

As almost all other forms of financial transactions have evolved, so have consumers’ communication preferences in that arena. Nearly nine in ten Americans are now using some form of digital payments and 59.5% of consumers prefer email as their first choice for communication, but traditional call-and-collect methods still dominate in late-stage recovery efforts.

And with that in mind, it shouldn’t be surprising that consumers complain about debt collectors’ and creditors’ communication tactics used when collecting debts.

But beyond ignoring communication preferences, many consumer complaints actually equate to compliance violations.

According to the 2022 Annual Report on the Fair Debt Collection Practices Act (FDCPA), 51% of communication-related complaints were because of repeated calls. Despite the 7-in-7 Rule (debt collectors are prohibited from calling the same consumer more than seven times within seven consecutive days, unless the consumer directly gives consent to receive any additional calls), 17% of respondents of a Consumer Financial Protection Bureau (CFPB) survey said a creditor or debt collector tried contacting them eight or more times per week. Similarly, other common complaints revolve around the collector or creditor calling at inconvenient hours outside of the FDCPA presumed convenient calling hours from 8:00 a.m. to 9:00 p.m. at the consumer’s location.

But again, even if you are following the letter of the law, it doesn’t protect your brand’s reputation from consumer complaints.

Minimize These Collection Challenges with a Digital-First Approach

Between declining RPC rates, shifting consumer preferences, rising consumer complaints, and increasingly stricter compliance regulations, the once tried-and-true outbound calling methods are no longer viable in 2024.

But your business doesn’t have to resign to accepting losses once accounts hit late-stage delinquency—taking a digital-first approach negates concerns over RPC rates, catches up with evolving consumer preferences, neutralizes the cause of common consumer complaints, and smoothly navigates compliance requirements.

Kick start your 2024 recovery efforts with a digital-first consumer communication approach—learn more and get started now»»

Email Deliverability: Six Key Questions to Ask Your Debt Collection Provider (and How TrueAccord Measures Up)

By on October 23rd, 2023 in Customer Experience, Industry Insights, Product and Technology, User Experience

Did you know one of the most common reasons for missing a payment is because delinquent customers simply forget to pay their bill?

But staying top of mind for consumers is harder than ever using traditional call-and-collect methods considering stricter compliance regulations and the fact that 94% of unidentified calls go unanswered. Plus, surveys have found that when it comes to debt collection, 40% of consumers state email as their first preference of communication, and contacting through a customer’s preferred channel first can lead to a more than 10% increase in payments.

But, even if your collections partner claims to use digital engagement, are you actually getting better recovery rates?

Simply adding email into the communication mix isn’t enough—there’s a lot that goes on between hitting “send” and reaching the inbox. Understanding the core components of a successful email program is helpful, but are your collection emails actually making it to your delinquent accounts? Unopened emails or messages trapped in spam won’t help those liquidation rates.

In today’s digital world, businesses can’t afford to work with collection partners who claim to engage consumers via email but can’t back it up with the metrics to prove that their messages actually reach their intended recipients.

Let’s look at six key questions to ask your collections partners, why each question is important, and how TrueAccord measures up. Want to learn more about email deliverability? Click here»»

1) What is their primary method of consumer engagement in debt collection?

Why It Matters
The success of traditional call-and-collect methods are waning compared to modern digital engagement due to more consumers preferring digital communications, declining right-party contact rates, and increasing compliance restrictions.

How TrueAccord Measures Up
TrueAccord is a digital first, omnichannel debt collection agency—and has been a leader in digital consumer engagement.

2) How long have they used email as a form of consumer engagement in debt collection?

Why It Matters
Many debt collection providers have been slow to adopt digital communication as part of their consumer outreach, and even those who have integrated digital are still refining strategies for optimal outcomes.

How TrueAccord Measures Up
From the very start back in 2013, TrueAccord’s approach to consumer engagement has been digital-first and continues to grow into a robust omnichannel operation through machine learning driven by data from 20 million customer engagements and counting.

3) What is their email delivery rate?

Why It Matters
Email Delivery Rate refers to the successful transmission of an email from the sender to the recipient’s mail server, measured by emails delivered divided by the number of emails sent.

How TrueAccord Measures Up
TrueAccord has a 99% email delivery rate, compared to the average email delivery rate of approximately 90%.

4) What is their deliverability rate?

Why It Matters
Successful email delivery doesn’t mean that it actually makes it into the recipient’s inbox. Deliverability divides how many emails reach the recipient’s inbox, as opposed to their spam folder, by the total number of emails sent.

How TrueAccord Measures Up
TrueAccord has a 95% deliverability rate, compared to the worldwide average of 84.8%

5) Do they measure open rates and/or click rates?

Why It Matters
Measuring open rates (percentage of recipients who opened your email) and click-through rates (percentage of those who clicked on a link in the email) play a dominant role to understand which communications are resonating with recipients and which are not.

How TrueAccord Measures Up
TrueAccord has a total open rate 52% and total click rate 1.77%, compared to the 2023 average industry total open rate of 27.76% and click rate of 1.3%.

6) How do they make adjustments when delivery and/or deliverability rates fluctuate?

Why It Matters
Email delivery and deliverability rates will fluctuate, but how a provider responds and adjusts to these changes is crucial to keeping the rates as high as possible. 

How TrueAccord Measures Up
TrueAccord’s dedicated Email Operations and Deliverability Team proactively monitor and make adjustments, along with using our patented machine learning engine, HeartBeat.

Ready to Reach Optimal Consumer Engagement in Your Debt Collection Operations?

Start by scheduling a consultation to learn more about what influences email delivery and deliverability rates and how TrueAccord consistently performs above the rest. 

Get Start Now»»

Core Components for a Successful Email Program in Debt Collection

By on September 12th, 2023 in Customer Experience, Product and Technology

If your business and collection partners aren’t utilizing email in your debt recovery strategy, you’re leaving vital engagement opportunities (and potential collections) on the table. There are plenty of reasons why digital communications are the way to go, but reaching out through email is especially important in collections.

Surveys show that 59.5% of consumers prefer email as their first choice for communication, and 14% of bill-payers prioritize payments that offer lower-friction payment experiences, which increases to 23% for millennials specifically. Considering this, it shouldn’t come as a surprise that courts have actually ruled that “an email is less intrusive than a phone call” for debt collection.

But what makes a successful email program when it comes to connecting with delinquent accounts? Whether your business is handling collections in-house or are looking at working with a third party, your operations should be confident that you have these core components covered.

Core Components for a Successful Email Program

While adding email into the communication channel mix is critical, it is the set up, execution, and continued optimization of that email program that can actually make a difference when it comes to consumer engagement. There are many elements to a successful email strategy, but here are three of the core components that we’ll focus on:

Infrastructure, Data, and Content

All 3 are required for a successful email program—each one relies on the other two to create a high performing program.

Let’s take a look at why each of these is important and the risks that can occur without each component in place.

INFRASTRUCTURE

The infrastructure an email program is built on has many components itself: Mail Servers, Mailbox Providers, Internet Service Providers (ISPs), Email service providers (ESPs), and more. How these components are set up and work together influences sender reputation, which in turn influences email delivery rates. You can learn more about these different pieces in our blog focusing on the The (Hidden) Anatomy of Email here»»

While infrastructure can admittedly be complex, the risks your operation runs without a sound infrastructure are clear and quite consequential, including having your emails blocked, deferred or delayed delivery, or winding up lost in the recipient’s spam folder.

DATA

In today’s digital world, data is everywhere—but how you harness that data can make or break your email program (and even get you into hot water if you or your collections partner are not following all the necessary compliance regulations around data privacy and protection). Understanding data helps intelligently influence an email program, especially when focusing on email engagement metrics such as:

  • Opens
  • Clicks
  • Unsubscribes
  • Spam complaints
  • Hard Bounces
  • Spam traps

But without quality data analyzed appropriately, your emails could result in consumer complaints, hard bounces, falling into spam traps, not to mention negatively impacting all the engagement metrics listed above.

CONTENT

Solid infrastructure and reliable data are essential in any email program, but when it comes to debt collection, content can be the tipping point between a consumer committing to repayment or ignoring the outreach altogether—or even reporting your communications as spam or harassment.

From subject lines to your call-to-action (CTAs), sending the right message to your customers is crucial. Without compelling content you miss opportunities to capture consumers attention resulting in fewer opens, fewer clicks, or even pushing consumer perception in the wrong direction. If you lose your customers’ trust, you’re most likely going to lose the chance to recover their debt.

Successful Email Engagement Can Boost Debt Recovery

Studies have shown that engaging consumers through digital methods can increase resolution rates by as much as 25%. But if your digital efforts are missing any of the core components we just covered above, it doesn’t matter if your collection strategy includes email—your operations are going to be missing recovery opportunities.

Ready to step up your engagement with better email strategies? Schedule a consultation to get started»»

Between Hitting “Send” and Reaching the Inbox: The (Hidden) Anatomy of Email

By on August 15th, 2023 in Product and Technology

When it comes to reaching consumers, it’s no secret that email has surpassed phone calls as the preferred method of communication. In fact, 59.5% of consumers prefer email as their first choice for communication.

But just because your business sends emails to consumers doesn’t mean that your messages make it to their inbox. And if that email never reaches the intended recipient, it doesn’t matter what that customer’s preferred method of communication may be.

There are more factors than you may realize that go into whether or not your email reaches the consumer’s inbox, so let’s look at the hidden anatomy of email and the factors that influence where your emails end up.

What’s the Difference Between Mail Servers, Mailbox Providers, ISPs, and ESPs?

Before we look at what happens when you hit “send” on that email, it’s important to identify some of the key components that operate behind the scenes to get your message from point A to point B.

  • Mail Server: A mail server (also known as a mail transfer agent or MTA) is an application that receives incoming email from the sender and forwards outgoing messages for delivery to the recipient.
  • Mailbox Provider: A mailbox provider provides email hosting and implements email servers to send, receive, accept, and store email for the recipient.
  • ISPs: Internet Service Providers (ISPs) provide internet. Although ISPs can provide email services, separate ESPs are often used for business email operations—but ISPs play a major role in email delivery and landing in the recipient’s inbox.
  • ESPs: Email service providers (ESPs) are a service that enables businesses to send emails and email campaigns to a list of subscribers.

How Does Email Actually Work?

When you hit the “send” button, your ESP sends the email to the recipient’s mail server through various protocols such as SMTP (Simple Mail Transfer Protocol). The delivery process involves establishing a connection with the recipient’s mail server, transferring the email content, and receiving a response indicating whether the email was accepted or rejected by the mailbox provider.

Several key factors play into whether an email gets tagged in spam or junk or filtered into “social” or “promotion” categories.

  • Mailbox providers and anti-spam filters make inbox placement decisions based on a 30-day rolling history of sender reputation metrics
  • Inbox placement is based on the subscriber’s interaction, regardless of your business model
  • All types of emails are subject to the same filtering, regardless of content

At TrueAccord, every time we send an email our email providers notify us of events like delivered, open, click, hard bounce (such as an email being sent to an invalid or nonexistent email address), soft bounce (typically an indicator of a temporary technical issue on the recipients’ end), and spam complaints.

In the case of bounces, TrueAccord stores that data and categorizes it as not delivered. Emails that result in a soft bounce are temporary bounces and could get delivered within 72 hours. For hard bounces, we will not send to those again—or it severely hurts our reputation among ESPs and ISPs. For Regulation F compliance when delivering disclosures electronically, debt collectors are required to monitor for deliverability. TrueAccord presumes that any hard bounce or undelivered soft-bounce (one that is not delivered after 72 hours of the first soft bounce) has not been delivered.

Why are ISPs So Selective?

the ISPs are selective on what emails get accepted and which actually reach the inbox. But there are three key initiatives ISPs consider:

  • To protect email account owners from:
  • Spam
  • Scams
  • Poor experience
  • To protect and prioritize company resources:
  • Limited email engines i.e. mail servers
  • Limited bandwidth
  • Limited personnel or internal expertise
  • To continue driving revenue:
  • Lower email interaction reduces ad impressions and revenue
  • Too many emails can lead to account abandonment from subscribers

Best Practices to Get Your Emails Delivered

Understanding the different components of email, how it actually works, and the selective filters in place to protect consumers are all important to a successful email program. Now let’s look at several best practices to follow:

  • Build and maintain a positive sender reputation with ISPs and ESPs
  • Ensure good email list hygiene
  • Send to actively engaged subscribers
  • Maintain consistent volume and cadence (avoid spikes)
  • Avoid spammy subject lines
  • Develop valuable content that would engage subscribers

While many of these best practices may seem like no-brainers, achieving them can take more skill and effort than most businesses expect. Each of these contribute to email delivery rates and more importantly, deliverability to recipients’ inboxes—key drivers towards consumer engagement and your bottom line.

Ready to step up your engagement with better email strategies? Schedule a consultation to get started »»

Call-and-Collect vs Digital-First Engagement for Debt Recovery

By on June 1st, 2023 in Compliance, Customer Experience, Industry Insights, Product and Technology, User Experience

Outbound calling has been the main mode of collections for decades, but the cost of a call center or in-house full-time employees (FTEs) making calls is no longer justifiable when most consumers simply don’t answer the phone, on top of the mounting compliance restrictions limiting opportunities to call in the first place.

But outbound dialing isn’t completely obsolete—digital-first omnichannel strategies can turn traditional call-and-collect operations around by integrating new digital channels into the communication mix.

Let’s compare traditional outbound calling methods versus a digital-first approach in three key areas impacting your business’s ability to collect more, faster:

  • COST
  • COMPLIANCE
  • CONSUMER PREFERENCES

Get even more statistics and data in our latest eBook — Why Evolve from Outbound Calling to Omnichannel Engagement? Cost, Compliance, & Consumer Preferences — available for download now»»

COST: Call-and-Collect

The cost to collect has been on the rise for traditional methods for years, whether you outsource to a call center or have FTEs dialing the phones.

One reason for this rise is based on the fact that many lenders still practice old strategies to prioritize contacting customers based on their risk profiles, balance, and average days delinquent—completely missing portions of their portfolios. Factoring in propensity to pay is important to successful engagement, but it means that agents’ time is focused on only a small portion of accounts, leaving potential repayments on the table.

Add in the overhead costs, inflation, and hiring challenges of using agents as first attempts at engagement and watch the expenses continue to climb past what you’re able to collect through outbound calling.

COST: Digital-First Omnichannel

Right off the bat, digital-first shows the cost of collections can fall by at least 15%.

Since digital is infinitely scalable, this communication tactic can touch every single account, regardless of scoring models—unlike human dialers who can only physically call a certain number of accounts on any given day. Going digital-first cuts down on the time billed for making repeated outbound calls that are never answered or returned, and it allows agents to interact with customers that want to speak directly to a person.

Overall, digital-first has shown to boost customer engagement by 5x, the first step towards repayment.

COMPLIANCE: Call-and-Collect

It’s no secret that it’s increasingly complicated to reach customers with all the legal communication restrictions.

While all debt collection communication is subject to compliance rules, outbound calling has specific laws and regulations that can carry costly penalties for non-compliance—and it’s only becoming more complex with new state-specific rules rolling out right and left. But no matter where your business is doing business, if you’re making collection calls you must follow these federal guidelines:

  • Inconvenient Time Rule: prohibits calling before 8am or after 9pm
  • Regulation F’s 7 and 7 Rule: Cannot call more than seven times within a seven-day period
  • Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act) tagging legitimate businesses as spam
  • FCC Orders further restrict dialing to landlines and include opt-out requirements for prerecorded voice messages

But there is a more streamlined way to ensure your collection communications are following all the rules: enter code-based compliance.

COMPLIANCE: Digital-First Omnichannel

Code-based compliance works by programing rules that ensure all communications fall within all federal and state laws and regulations, such as:

  • Frequency and harassment restrictions
  • Consent requirements*
  • Disclosure requirements

This digitally designed approach to compliance greatly reduces the opportunities for human error that are bound to occur in more manual processes. Additionally, the digital-first approach allows companies to continue to collect during times that calling would violate certain regulations, like the Inconvenient Time Rule. In fact, 25% of payments come in after 9pm or before 8am (the determined inconvenient times), since these hours can actually be more convenient for consumers to catch-up on digital communications they received throughout the workday.

*Generally, there is no requirement in the federal law to send debt collection communications by email, though some states are more restrictive. This is not legal advice, please consult an attorney for guidance on your unique circumstance.

CONSUMER PREFERENCE: Call-and-Collect

46% of consumers want to be reached through their preferred channels—so what are today’s consumers’ preferences?

Here’s a hint: phone calls aren’t at the top of the list.

And today’s Right Party Contact rates show it, ranging between just 0.5% – 4.0%. And out of those that do answer the phone, 49.5% of consumers take no action after a collection call. The old call-and-collect tactic may actually do more harm than good if compliance rules are ignored: out of the communication tactic complaints received by the CFPB in 2020, over half complained of frequent or repeated calls.

CONSUMER PREFERENCE: Digital-First Omnichannel

So if phone calls aren’t consumers’ preferred method of communication, then what is? For 59.5% of consumers, email is their first preference when it comes to debt collection communications. This is especially important considering that first contacting a customer through their preferred channel can lead to a more than 10% increase in payments.

This digital preference isn’t surprising since nearly nine in ten Americans are now using some form of digital payments—why would they expect collections to be any different? 14% of bill-payers prioritize payments to billers that offer lower-friction payment experiences, and digital is often preferred because of it. Digital communications are easily controlled by consumers and are tightly managed by service providers with built in mechanisms to prevent harassment (like with code-based compliance), which we know has historically been a challenge for call-and-collect practitioners.

Digital-First is the Future of Collections

And it’s here today, working for TrueAccord clients and customers.

At TrueAccord, we find that more than 96% of customers resolve debts without any human interaction when digital options are offered—reducing costs associated with outbound calling, lowering risks with code-based compliance built in, and delivering an experience that consumers prefer.

Get even more statistics and data in our latest eBook — Why Evolve from Outbound Calling to Omnichannel Engagement? Cost, Compliance, & Consumer Preferences — available for download now»»

Ready to go digital-first with your debt recovery operations? Schedule a consultation to get started today!

Developing with Empathy: TrueAccord’s Mission-Driven Approach

By on December 21st, 2022 in Customer Experience, Industry Insights, Machine Learning, Product and Technology, User Experience
Developing with Empathy

When most people think of debt collection, the word “empathy” rarely comes to mind. As a mission-driven company, we at TrueAccord, are trying to change that. We know life happens and financial anxiety has become more common than ever—especially when it comes to dealing with debt. By understanding and anticipating a customer’s needs, TrueAccord takes an empathetic approach which enables us to tailor our message and help the consumer’s journey back to financial health. With this in mind, it’s crucial for us to understand how a consumer might feel when they fall into debt.

Understanding and Engaging with the Customer

Life happens and so do delinquencies. So far, most fintechs have been good at focusing on customer experience by investing in user research and making sure that their products resonate with their target audience. However, a customer’s situation can change at the drop of a hat and with it their financial status, priorities, and motivations. When a customer, whom you thought you knew well, has an account that goes delinquent, they essentially become a stranger. Now a whole new approach is required in order to engage with this consumer. 

In order to adopt the right approach to engage a delinquent account, the first thing we have to figure out is who the customer is. What are their needs? What problems do they have? Do they have special circumstances? Not only is every customer different, but every interaction you may have with that customer could be different depending on what life situation they find themselves in. So it is very important to have a broad communication strategy and be ready to meet the customer when and where they are ready to engage. This means don’t limit communication channels and have options that consumers can explore, evaluate, and select on their own time.

Leveraging Digital-First Channels

Most consumers prefer using digital channels over talking on the phone with research showing 94% of unidentified calls going unanswered. Digital channels allow people to choose when to respond without being put on the spot. 

But starting a digital-first approach is not easy—it’s not just about sending emails or SMS messages to consumers. At TrueAccord we try to find the right communication channel to use for a specific consumer. We might start with a combination of email and SMS but once we get more engagement with one or the other, we’ll primarily focus on using the channel the customer engaged in. 

We make sure that they’re aware of their debt and their options from obtaining more information, disputing, or evaluating payment plans all through a portal where the consumer is in control.. 

For consumers who do choose to set up a payment plan, we work to make sure that they have everything they need to be successful in their plan – whether that means changing the plan, the payment date, or amount, we monitor and provide content so that the consumer can effectively stay in control of their plan through successful completion – putting the consumer back in control of their own financial health while at the same time recovering for the creditor.

Using Data for a Personalized, Empathetic Experience

To truly engage consumers a successful digital strategy should go beyond a simple campaign that pushes out emails to all of your consumers at the same time every week or every other week with a generic message. Not only do you have to overcome the inboxing challenge to avoid spam filters, you need to deliver the communication at the optimal time for the consumer to open the message. And you have to have the right message, a personalized message that causes the consumer to act – to communicate back to you their intentions related to the account (dispute, full payment, payment plan, hardship, etc.). 

But how do you personalize? 

This is where it’s vital to leverage an understanding of your consumers. This can be done with experimentation in A/B testing consumer research, and machine learning. A/B testing and consumer research help identify what resonates with consumers and what does not. Machine learning allows personalization at scale. At TrueAccord, we rely on machine learning to continuously improve our models. We can see what digital channels, timing, and messaging each individual consumer responds best to and tailor those specific preferences to the individual journey for each consumer. We also make sure that compliance is included from the start as it needs to be regulated throughout. 

For example, the best payment option is different for everyone. We provide a lot of flexibility, but we also know that showing them that flexibility up front, something that they can actually afford, will engage the customer to take the next step. Depending on the size and the age of the debt, we may show a couple of payment plans that we believe will be the most attractive to that customer along with the option to build their own payment plan. Once a customer sets up their payment plan, we send reminders when payment is due. We also have models that predict if a consumer is likely to break their payment plan based on past behavior and offer options to help keep them on track, like pushing the payment if they’re unable to pay on that date (because we understand that life happens, just like delinquencies). And as they make their payments, we celebrate their progress with them and acknowledge that they are making an effort to improve their financial situation!

The End-Product:

TrueAccord has worked with over 20 million consumers and sends over one million communications per day. For each of those communications, we’re making decisions on what to send, how to send it, and when to send it all in accordance with the legal and regulatory compliance obligations. We then use that data to continuously optimize and improve our communication method for each consumer. We’ve learned that if you’re building for the downtimes, it’s critical to realize that debt collection is a part of a consumer financial service. While our creditors are our clients, if we do what is right for the consumer (our clients’ customers), they are more likely to pay back to those creditors. A better consumer experience leads to better outcomes for all. 

By incorporating an empathetic approach to debt collections, TrueAccord is able to collect more money while helping consumers with their financial situation.

Want to learn more about how your business can integrate more empathy into your collections communications? Schedule a consultation today!