The CFPB put the full video from their debt collection field hearing on their YouTube channel. Participants were allowed 2 minutes to respond, and our CEO took that opportunity (watch here). His comments: Thank you for the time today. My name is Ohad, I'm CEO of TrueAccord, a company that uses data and machine learning to fundamentally change the consumer experience in debt collection. We've been studying the new proposal since yesterday. We believe it is a big step towards improving consumer protection. Weeding out bad actors is going to level the playing field and create a race to the top that will benefit everyone. When finalizing the rule, we think the CFPB should continue to encourage innovation in this space by providing clear and unambiguous guidelines on how to use new technology in the collections process. As a data-driven startup company, we have empirical evidence showing hat using new technologies in the collection space - text, email, social media, digitizing the dispute process - significantly improves consumer protection. One, it improves protection measured by consumer feedback and a marked reduction in consumer complaints. Consumers understand and react to our personalized, targeted communication. Two, it significantly reduces communication frequency; reduces call frequency by up to 95%, well under the limitations proposed in this new proposal, using channels that consumers feel are much less intrusive. Finally, it does all of the above while meeting or exceeding traditional performance in liquidation. Nobody is going to go out of business by using new technology (and we'll add here: versus continuing to insist on hardly-compliant calling tactics). Again, the CFPB should considering supporting innovation by providing clear guidance for the use of technology. It will improve consumer protection and will help he industry as a whole. We look forward to cooperating with the CFPB and policymakers on this shared goal.

The CFPB’s proposal outline and SBREFA panel Last week, TrueAccord participated in the SBREFA panel for the CFPB’s proposal outline for upcoming debt collection rule. The CFPB invited Small Entity Representatives (SERs) to discuss how the outline could influence their businesses. The industry expects a more fleshed out proposal quite early in 2017. One thing is clear: this rule will change the debt collection industry forever. Creditors, collectors and buyers should take note and start adapting to, rather than fighting the rule. While this isn’t the final proposal, we can observe hints of the huge changes to come; it’s such a departure from current practices that applying this proposal retroactively may erase the majority of the debt buying industry. We don’t believe this is what the CFPB is aiming for. We see true desire to change operating principles in the debt collection and buying space, while showing a path forward. The outline included explicit references to new technologies, and some discussion of proper use of email. It also signaled the CFPB’s intent to provide safe harbor where it can, promoting best practices in the process. You can read our initial response here. (more…)

The Startup culture has always been characterized by herd-style behavior.  There is a tendency to focus on a bunch of areas that are “ripe for disruption”. After a promising / well-publicized startup draws attention to a area - be it ride-sharing, marketplace lending, payments processing, risk management, or one of many others - many more rush in, attempt to differentiate themselves and get a piece of the action.   (more…)

Compliance is top of mind for the debt collection industry. Highly regulated at the State and Federal levels, collectors are subject to dozens of laws and regulations that govern every aspect of their operations. A highly litigious culture based on strict liability laws means a constant threat of lawsuits, resulting in shifts in courts’ interpretations of various statutes. To pile on, debt collectors are subject to active enforcement and rulemaking activity and attention by lawmakers, leading to ongoing updates in debt collection laws. What can debt collectors do to get ahead of them curve? At TrueAccord, we know code driven compliance is the answer. (more…)

Automation and digitization offer new tools for the collection strategist, augmenting the traditional building blocks. These new tools, introducing flexibility and sophistication that are usually attributed to other parts of the business, can mitigate common pitfalls. (more…)

There are multiple reasons for preferring certain collection strategies over others. Every strategy has built in areas of weakness that cause it to make less money than possible. Strategies shouldn’t be stagnant, and as new tools present themselves, strategists can continue to fine tune their strategy and improve returns. (more…)

Automation and digitization offer new tools for your collection strategy, augmenting the traditional building blocks. These new tools, introducing flexibility and sophistication that are usually attributed to other parts of the business, can mitigate common pitfalls. In this series, adapted from our free eBook Automating Debt Collection 101, we’ll review the three major areas where automation and digitization can boost a collection strategy: Early contacts and improved segmentation Persistent communication Improved customer satisfaction In this second part, we’ll focus on improving performance with persistent communication. Customers in debt are in a dire situation, cannot pay the balance in full, and many times even a payment plan isn’t feasible. A call center is limited in its flexibility – beyond a certain number of payments or customizations, a human agent is just too expensive. These accounts risk being mishandled, and end up paying less than they could with some “hand holding”. Automated collections have a tremendous advantage in handling complex cases. The platform consistently follows up with customers using multiple channels, offering various solutions according to an optimized offer strategy, and administers changes in those solutions (split payments, rescheduling and more) over time as needs change. These tools can accept and administer a monthly $5 payment that increases over time, even if the customer misses a few payments and needs consistent follow-ups. When the vast majority of contacts are automated, even small amounts are profitable – and add up. The system doesn’t get tired, doesn’t get angry, and doesn’t need to go home by the end of the day. It’s there to service the customer. TrueAccord sees more than 35% of customers in an average placement click on a link and negotiate with an automated system, thanks to diligent and relevant follow ups. In tests, working on the long tail of underserved accounts yields 4-8% of additional recovery – dollars that would otherwise be considered lost.

There are multiple reasons for adopting one strategy over the other. Every strategy has built in areas of weakness that cause it to make less money than possible, but all have common mistakes - some shared and some unique. Strategies shouldn’t be stagnant, and as new tools present themselves, strategists can continue to fine tune their strategy and improve returns. In the following three post series, adapted from our free eBook Building a Collection and Recovery Strategy, we’ll review the top three pitfalls we see with common collection strategies. They are: Under-charging when selling or over-paying when outsourcing Only focusing on a small percentage of customers in an outsourced strategy Losing customer relationships in a sell or litigation heavy strategy In this second part, we’ll touch on another one of the common mistakes we see: having a narrow focus when collecting. Traditional debt collection is difficult to scale, and heavily relies on humans making phone calls. Collection agents try to stay away from accounts that require a lot of interaction to recover. Because of the high cost of a call, agencies focus on calling accounts with the highest yield for them. Agents are also human, and humans – especially those making commission – want the home run, not the singles and doubles. Low balance accounts, accounts that cannot currently pay or ones that require a long time to convert will get less attention. That creates underserved segments and lower returns for the lender. We think the issue is the limited set of tools offered to collection strategists. The low margin problem is inherent to call centers, and most debt collectors are exactly that: specialized call centers. They have no ability to provide the type of flexibility required by a lender that doesn’t have homogenous portfolios with high average balances. A lot of money is left uncollected in the long tail. Want to use our tools to optimize your strategy? Visit our website to learn more.

At TrueAccord, we take our service availability very seriously. To ensure our service is always up and running, we are tracking hundreds of system metrics (for example, how much heap is used by each web server), as well as many business metrics (how many payment plans have been charged in the past hour). We set up monitors for each of these metrics on Datadog, that when triggered, will page an on call engineer. The trigger is usually based on some threshold for that metric. As our team grew and more alerts were added we noticed three problems with Datadog: Any member of our team can edit or delete alerts in Datadog’s UI. The changes may be intentional or accidental, though our team prefers to review changes before they hit production. In Datadog, the review stage is missing. Due to the previous problem, sometimes an engineer would add a new alert with uncalibrated thresholds to datadog to get some initial monitoring for a newly written component. As Murphy’s law would have it, the new alert would fire at 3am waking up the on call engineer, and it may not even indicate a real production issue, but a miscalibrated threshold. A review system could better enforce best practices for new alerts. Datadog also does not expose a way to indicate that an alert should only be sent during business hours. For example, for some of our batch jobs, it is okay if they fail during the night, but we want an engineer to address it first thing in the morning. To solve these problems, we made DogPush. It lets you manage your alerts as YAML files that you can check in your source control. So you can use your existing code review system to review them, and once they’re approved they get automatically pushed to DataDog -- Voila! In addition, it’s straightforward to setup a cron job (or a Jenkins job) to automatically mute the relevant alerts outside business hours. DogPush is completely free and open source - check it out here.

Automation and digitization offer new tools for the collection strategist, augmenting the traditional building blocks for your debt collection strategy. These new tools, introducing flexibility and sophistication that are usually attributed to other parts of the business, can mitigate common pitfalls. In this series, adapted from our free eBook Automating Debt Collection 101, we’ll review the three major areas where automation and digitization can boost a collection strategy: Early contacts and improved segmentation Persistent communication Improved customer satisfaction In this first part, we’ll focus on using automation to facilitate early contacts and improved segmentation. Automated collections are scalable. This means communicating with all customers as early as possible in the collection cycle, quickly working to resolution with those who can pay, and a more robust debt collection strategy. In traditional call-center collections, up to 50% of meaningful interactions are made within the first 30 days of communication. With an automated strategy, most of that value can be captured in a much more cost-effective manner, in a much shorter time span. No more guessing who to call first because everyone can be contacted at scale. Further, automated and digital collections create a wealth of data that cannot be gleaned form calls. User clicks and browsing, time and day of activity and more. The data can be used to segment accounts to those who are engaged, those who’ll respond better to phones, and those who should be sold or handled in other ways. It allows much more flexible recall criteria than placing for a set number of months, no matter what happens with the account. This means giving accounts the treatment they need at the right time, improving liquidation as well as cost to collect thanks to the scale of operations. Want to use our tools to optimize your strategy? Visit our website to learn more.