We started TrueAccord to make a difference in the debt collection industry, and that includes shining a light on practices that may not be illegal, but we think are either unethical or promote unethical behavior. We started by reviewing the downsides of quotas in debt collection, and today we'd like to touch on another burning issue: convenience fees. Charging convenience fees for certain type of payments (card, electronic, or every payment that isn't cash) is a common practice in debt collection. Even if the agency you're working with aligns well with your values and expectations (a tough proposition in this fragmented market), you should be very careful about allowed convenience fees, for the following reasons: (more…)

Getting a debtor on the line, or to respond to an email, is a hard task. Customers don't end up in this point if they have money and intend to pay promptly. Therefore, once you do talk to them, it's important to use that time in the best way possible. There are three things to pay attention to when interacting with a debtor: Instill a sense of urgency Get the truth Counter the excuse Instilling A Sense Of Urgency If your approach to getting paid is laid back and non-committal, your debtor will take this approach as well. When you communicate with late customers, you must demonstrate that the issue is urgent and important in order to get their attention and move them to action. Getting The Truth Sometimes the truth sounds like an excuse. Your debtors might be in real trouble or they might be tricking you. Asking the right questions will help you determine the facts and act accordingly. Countering The Excuse Once you’ve established you are hearing an excuse, you need to counter it in a way that makes sure you won’t need to deal with it again for this debtor. Did you find this helpful? Download our free eBook "The Top 4 Excuses Debtors Make" and learn more about how to counter common excuses.

Collection operations base their high recovery rates on models allowing optimal utilization of collectors' time. Since the person to person call is almost the only available too to convert debtors into paying customers, every minute is important. It's obvious that self-service portals cannot bridge that gap on their own, because they won't capture intent to pay in exactly the same way. While we may never be able to move away from making phone calls, the user experience in the collection process can and should be adapted to use behavioral cues to capture payment intent. Thinking of the set of tools as a spectrum, with a high touch phone call on one end and a low touch self-service portal on the other, modern technology allows us to maintain contact with the customer more consistently and longer than before. The key, as discussed in the webinar embedded below, is in designing the experience to use the way we think to capture that intent. In this webinar about behavioral economics in debt collection, we explore the mechanisms that drive decision in humans, and how to work with these mechanism to identify when a customer is ready to pay, or able and just needs a small nudge. These mechanisms are in the heart of every effective online experience, and they are explained here with their relevance to the debt collection process, with real life examples.

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?