As of Q3-14, more than $6 Billion have been borrowed on Lending Club. The p2p lending platform allows individual investors to lend to consumers for various needs - most often, credit consolidation - and get a hefty interest in return. Most of the loans on Lending Club are paid back, but some of them don't. We estimate that default rate at 5-7% overall, and naturally much higher when the loans are riskier. Borrowers pay their loans back via a monthly ACH payment, split and applied to all the notes that make up their loans, with the different lenders whose money they got. What happens when the note defaults? How do you see what happened? What is the Lending club debt collection process? Let's take a look at the Lending Club interface and find out. (more…)

Congratulations! You signed up to use the best debt collection platform in the market, and you're all ready to recover the money your customers owe you. How do you start? (more…)

More consumers are filing complaints with the Consumer Financial Protection Bureau (CFPB) due to debt collection practices. The number one reason, by a large margin (43% of the total in November 2014), is continued attempts to collect debt that isn’t owed. While many complaints are the result of the behavior of overly eager collectors, a lot of mistakes start with the original creditor. Old systems, bad reports and a sloppy debt sale process lead to balances being reported as unpaid, both to collection agencies and to credit bureaus. The CFPB has its eye on this problem, and collectors must be aware of its prevalence, since it leads to unnecessary disputes and hurts customers. (more…)

The CFPB published its Advance Notice of Proposed Rule-making for the Debt Collection industry back in 2013. The actual rule is expected around April of 2015, and the industry is worried about the changes it will introduce. The rule is expected to add more consumer disclosures, more data integrity in the collection process, as well as other limitations on contacting consumers. Furthermore, the CFPB is planning to apply its debt collection oversight mandate to first party debt collectors, those who collect for themselves or a parent company. Debt collection compliance is about to experience a huge shift. (more…)

Both the ACA and Credit and Collection Risk today shared numbers from the latest WebRecon report about debt collection litigation and CFPB complaints. The report and the response to it demonstrate how the debt collection industry works. Almost no collection agency will tell you how it works to recover debt. Sometimes because its clients don't care - or don't want to know - as long as they don't get in trouble or get sued. With this mindset, it's no wonder that agencies are almost giddy about this or that type of lawsuit declining to an all time low. Since no other performance metric is shared, CFPB complaints and lawsuits become the number every company optimizes for - since only what gets measured, gets noticed. (more…)

Nearly 80,000 consumer debt collection complaints have been submitted to the Consumer Financial Protection Bureau (CFPB) since the complaints database has been established. Of these complaints, more than half involve relentless or excessively aggressive communication tactics, false statements, or threatening actions. With companies more focused than ever on fine-tuning every aspect of their CRM process, it’s troubling that there is still a place for collectors who use bully tactics and who flagrantly violate consumer protection laws in the industry. (more…)

At TrueAccord, we use Play to develop our backend. Given our development environment, we need to have part of our URL space routed to a different server written in Python. We initially thought of setting up a lightweight HTTP server like nginx that would act as a reverse proxy for both of our development servers, which is a reasonable solution. However, we also wanted to avoid having yet another moving part in our development environment and were curious if we could write something quick in Scala that could achieve this. As it turns out, writing this little reverse proxy in Scala/Play is relatively straightforward. It’s also pretty impressive that with so few lines of code we get a reactive proxy server that streams the content continuously to the end client while chunks of it are still arriving from the upstream server. A more traditional (and time-intensive) implementation would have buffered the entire upstream response until it was complete and only then sent it to the client.. So, without further ado, here is the code: [gist id="20e1711b406ffab6495d"] In line 14, proxyRequest.stream returns a Future[(WSResponseHeaders, Enumerator[Array[Byte]])]. This means that at some point in the future, our closure at line 15 will get called and will be supplied two things: the headers returned from the upsteam server (WSResponseHeaders) and an Enumerator[Array[Byte]], which is a producer of arrays of bytes. Each array of byte that it will produce is a part of the response body from the upstream server. Conveniently, Play provides a Result constructor that takes producers like this and turns them into responses that can be served to the end client. flattenMultiMap is a little helper function that converts the query string parameters from the collection type they are given by Play requests to the format expected by WS.url. Pretty cool, eh?

It’s natural to blame your customers for not paying, but before you accuse them of bad behavior, make sure your own house is in order. Rule number one in algorithmic recovery is to approach debtors from a CRM perspective as opposed to a disciplinary one. With this strategy, it’s far more likely you’ll get customers back on regularly paying terms for the long run. (more…)

It’s easy to sum up our success with Elance-oDesk: for every $1 of debt we recovered, they have seen more than $2 of additional, post-recovery payments from these customers. These are pretty compelling numbers. For perspective, let’s rewind. Elance-oDesk is one of the world’s largest online workplaces. More than 2.5M businesses and more than 8M freelancers converge on www.elance.com and www.odesk.com to work together via the Internet. By the end 2014, the merged companies expect to see more than $900 million in billings. However, before TrueAccord, many of those billings had gone awry. (more…)

If you’re a marketing or customer service manager at a large bank, your success is likely tied to increasing your institution’s Net Promoter Score. You’re probably also familiar with the paradoxical task of collecting debt without sacrificing promoters. The age of big data has a solution for that. With the right collections partner, you can improve customers’ attitudes not just about the late bill at hand, but about their overall experience of the brand itself. How is this possible? For starters, it’s an essential evolution in the financial industry. According to Satmetrix, credit card providers face a particularly onerous challenge in debt collection because it typically takes six or more years before any one customer becomes profitable. In their attempt to maximize customer spending and tenure, lenders must innovate in the realm of debt repayment. If satisfaction is the fundamental NPS driver, it stands to reason the most valuable innovations in customer service will focus on turning critics into advocates. Finding disgruntled customers is easy. Many of them are refusing to pay their bills. At TrueAccord, we’ve found that winning back these types of customers can create some of your strongest advocates. Recover relationships, not just sums. TrueAccord’s proactive loss management system uses enterprise-grade analytics to personalize our approach to individuals – to connect with them as humans – in a way that not only gets you paid but wins you fans. We accomplish this by looking at root causes of delinquency rather than the past-due balance itself. We segment customers based on how they perform both before and after we point out their tardiness. And we know how and when to follow up. Take it from one of our best testimonials: “This has to be the funniest bill collection I have ever received and it actually made me want to pay.” The creditor in question could have written off this customer. Instead, we created a promoter. We’ve also found that in addition to driving an organization’s NPS, TrueAccord’s debt collection methods can increase a company’s overall revenue. Our customers see more than $2 in additional business for every $1 paid per late payer we retained for them. Bring it home. A seminal Bain survey of more than 89,000 customers of various types of US banks found that promoters stay longer with their institutions, buy more products, refer more new customers and cost less to serve. The study also found that among affluent US customers, a promoter is worth $9,500 more than a detractor over the tenure of that customer relationship. Of particular note, direct banks enjoy drastically higher NPS than national branch networks based on recommendations from friends, colleagues and family members. At TrueAccord, we can make your customers feel like they’re dealing with their local banker down the street. And as history suggests, communities promote from within.