TrueAccord is proud to announce it was recently selected as one of the 2025 Best Places to Work in Collections administered by ACA International and Best Companies Group. The award evaluates workplace policies, practices, philosophy, systems and demographics along with employee experience surveys to determine winners.
This survey and award program was designed to identify, recognize, and honor the best places of employment in the collections industry. This year, 48 companies met the standard to be selected.
“At TrueAccord, we prioritize our mission-driven culture and employee engagement to deliver results for clients and consumers with digital-first debt collection,” commented Mark Ravanesi, CEO of TrueAccord. “I’m honored but not surprised to be on the Best Places to Work in Collections list—our commitment to excellence is baked into everything we do, we put a strong emphasis on our community, and our employees are top-notch and empowered to bring their A-game every day.”
Companies from across the U.S. entered the rigorous two-part survey process to determine the Best Places to Work in Collections. The combined evaluation and employee survey scores determined the top companies and the final ranking. Best Companies Group managed the overall registration, survey and analysis process and determined the final ranking.
To be considered for participation, companies had to fulfill the following eligibility requirements:
Be a for-profit or not-for-profit business or government entity
Be a public or private U.S. company
Have a minimum of 15 employees in the U.S.
Must be in business a minimum of one year
Must be a collection agency, collection law firm or debt buyer
This survey program is administered by Best Companies Group, which conducts over 60 local, national and industry “Best Places” programs each year. For more information on the Best Places to Work in Collections program, visit: www.BestPlacestoWorkCollections.com.
About TrueAccord
A subsidiary of TrueML Technologies, TrueAccord is the trusted industry leader in third-party debt collection, leveraging data science and technology to deliver superior results and a best-in-class consumer experience. Since 2013, TrueAccord has served more than 40 million consumers in debt with a more humane collection experience while delivering unmatched liquidation rates as the leader in digital-first collections for the Buy Now Pay Later, fintech, telecommunications and credit union industries, among others. Visit www.trueaccord.com and follow on LinkedIn to learn more.
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 isan 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.
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.
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:
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.
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.
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.
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!
As recently as 15 years ago, consumer expectations about the debt collection experience looked starkly different than they do today. Back then, people expected debt collection communications to come as a piece of physical mail, and consumers were more likely to answer the phone for an unknown number before spam calls and call labeling and blocking became the norm. Companies who were looking to collect on a debt often used aggressive tactics, and customer satisfaction wasn’t a priority as long as some of the money owed was recovered.
Now, consumers want empathy, understanding and convenience from the companies they interact with, especially in financial services. These shifts in consumer expectations continue to spark changes in debt collection trends and have led to more businesses investing in digital strategies to better engage with consumers. Join us as we take a more in-depth look at how consumer expectations in debt collection have changed and what it means for your business.
Customer Satisfaction is a Key Debt Collection Trend
Consumers today want their problems in financial matters resolved sooner rather than later. A recent survey done by TCN on consumer expectations found that financial companies are seeing a decline in customer satisfaction. One of the main drivers of this trend is people reporting that customer service efforts aren’t solving their problems effectively. A key benchmark used in this survey looked at how often financial service businesses were able to solve customer problems on first contact.
Only 13% of survey respondents said that their problem is always solved the first time they reach out. The more someone is forced to call back or wait for a follow up, the less likely they’ll be to engage with the company moving forward. For debt collection, that means fewer payments the longer a consumer has to wait. These survey findings stem from the debt collection trend of consumers wanting to fix problems on the spot. This notion is part of the reason why self-service portals and mobile apps have become the preferred method of resolving financial matters.
One key digital debt collection strategy is offering your customers more options that are easily accessible to them. In fact, 59% of consumers in debt want more flexible payment options. If your business is trying to improve its debt collection performance, giving your customers more options will often lead to higher levels of satisfaction. The proof of this digital debt collection trend can be seen with TrueAccord. Roughly 98% of TrueAccord customers resolve their debts with self-serve options and don’t ever interact with a human in the process.
Preferred Communication Channels for Bill and Debt Notifications Have Changed
Today, there’s no shortage of ways to send customers bills and debt notifications. For many companies out there, these notifications are sent through channels that are convenient and/or familiar to them, which doesn’t always align with consumer preferences. The more in-tune businesses are with consumer preferences, the more likely their communications will be engaged with. For businesses looking to recover debt, that means better collections performance and happier customers.
Let’s walk through an example. According to the same TCN survey, 47% of consumers prefer to be contacted by email for bill and debt notifications. Around 25% of Gen Z and 22% of Millennial customers prefer to be notified by push notifications through mobile apps. Your digital debt collection strategies need to take these expectations into account to maximize engagement. Even though email was the most desired communication method, every consumer is an individual with their own preferences.
Some of the best digital debt collection strategies leverage AI and machine learning to test and uncover the best channel for every individual. TrueAccord uses its patented machine learning engine Heartbeat that learns from every customer interaction to determine the best step to take with each consumer. It’s a personalized approach to debt collection where consumer expectations and preferences are at the core of every communication. The result is collecting more from happier people.
Convenience is King in Digital Debt Collection Strategies
In financial industries like banking and debt collection, convenience has emerged as one of the most important consumer preferences. With how critical messages in these industries often are, consumers want ways to be able to easily address them so the problem doesn’t linger and cause prolonged stress. For further proof of this trend, a recent survey by the American Bankers Association showed that 55% of consumers prefer mobile banking. Only 8% of people surveyed go to a physical branch for their banking needs.
The consumer trend of wanting more convenience through self-serve options is carried through into the debt collection industry. TrueAccord, for example, has been able to honor this consumer trend with its self-service portal. It’s a low friction way consumers use to pay off debt and should be a key strategy leveraged for digital debt collection.
Based on research done by McKinsey, consumers who digitally self-serve resolve their debts at higher rates and are much more likely to pay off the debt in full. Plus, the customer satisfaction is much higher with self-service portals compared to making a payment over the phone. These trends emphasize the importance of convenience. But just don’t take it from us, here’s what a real TrueAccord customer had to say:
“Thank you for being patient and for having a portal that makes it easy to make the payment without filling out a bunch of stuff and having to make an account or something.”
Stay On Top of Consumer Expectations in Debt Collection with TrueAccord
It can be challenging to stay on top of consumer expectations in debt collection. But with the right partner, your business can improve debt collection performance while increasing customer satisfaction.
TrueAccord is a leading digital debt collection agency that’s powered by machine learning to provide a consumer-friendly experience that honors their preferences. Schedule a consultation today to learn more about how our platform can handle your delinquency needs.
New York City’s Department of Consumer and Worker Protection (DCWP) has been actively revising an amendment to their debt collection rules since November 2022. Multiple rounds of proposed amendments and public hearings have occurred, resulting in several revisions based on stakeholder feedback. In August 2024, DCWP published a notice of adoption of the final version of the amendment, initially effective December 1, 2024. Due to stakeholder confusion, requests for additional time, and a lawsuit filed by ACA International and Independent Recovery Resources, the DCWP extended the effective date to October 1, 2025. On April 10, 2025, the DCWP released additional changes to the amendments aimed to clarify “the applicability of rules to original creditors collecting their own debts, address trade practices and consumer protection concerns.” Any comments are due by June 10, 2025 and the amendment takes effect on October 1, 2025.
Though we have entered an era where digital communication is becoming the standard, New York City’s newly revised proposal still restricts debt collectors from using email and SMS without prior consumer consent. Additionally, the changes require original creditors, who already obtained consent to communicate electronically, to take additional steps after starting debt collection. While the changes are well-intentioned in their aim to “clarify the intent and applicability of recently adopted amendments” to the debt collection rules and ultimately address the industry concerns that resulted in a lawsuit over the first proposed amendment, the amendments still have the unintended consequence of making it more difficult for those who are struggling with debt to learn about and resolve their issues efficiently, effectively, and without added layers of frustration. Consumers, creditors, and collectors should all be concerned and seeking additional revisions.
Statistics and Court Rulings Reinforce the Benefits of Digital Consumer Engagement
In today’s world, 80% of consumers prefer a full digital banking experience, including when it comes to debt collection. Why? It’s simple: these communication methods are quick, convenient, and less intrusive. They allow consumers to engage with creditors or debt collectors on their own time, whether they’re at home, at work, or on the go—and it’s no surprise that 25% of consumers engage with emails after 9:00 pm and before 8:00 am.
Emails and SMS messages are particularly effective in reaching consumers who might not be available for a phone call or may be reluctant to open a letter. Email allows for easy documentation, while text messages offer a faster, less formal way to remind consumers of their debt obligations. This is why many consumers prefer these methods over phone calls, which can be disruptive and intrusive. The federal courts agree. A recent TrueAccord court victory in the Northern District of Illinois stated unequivocally that receiving an email about a debt is less intrusive to consumers than receiving a phone call. And a separate TrueAccord victory as email is silent unlike “noisy telephone rings.”
The Pitfalls of New York City’s Proposed Laws on Consumers
Despite statistics and court rulings, the New York bill in question would require debt collectors to get explicit consent before contacting consumers via text or email, limiting these convenient communication channels. While the law’s proponents argue that these measures are necessary to protect consumers from excessive communication, it overlooks the fact that the existing state and federal law already prohibits debt collectors from harassing consumers. It is illegal under existing New York City, New York state and federal debt collection laws to harass or communicate excessively thereby annoying consumers. The proposal ignores the significant benefits digital outreach provides consumers.
Digital communications are a step forward in consumer protection providing consumers with a written and documented record of communications. Digital channels offer protection from unwanted communication with easy ways to opt out. Email service providers launched one-click unsubscribe last summer, requiring senders to display a one-click unsubscribe button at the top of all emails. To opt-out consumers need only click on the one-click unsubscribe. Consumers can also mark emails as SPAM. When enough consumers take that action, the sender gets banned by the email providers. Consumers can just as easily reply STOP to opt out of SMS communications. The CTIA short code rules require senders to honor several different key word opt-outs and failure to do so results in suspension of the short code.
This proposed amendment ultimately makes it much harder to reach a consumer in the first place. Imagine being behind on payments and missing multiple calls from your creditor, only to later discover that you can no longer be contacted by email or SMS until you opt in. Requiring consent first introduces a significant hurdle. Getting a consumer to respond to a phone call at all (let alone to opt into email or SMS communication) is notoriously difficult, with 80% reporting they will block calls from unknown numbers, according to research from TransUnion. With that in mind, the New York law has the potential for many consumers to simply ignore the phone call to give their consent to be contacted digitally, and as a result, miss out on opportunities to resolve their debt.
This is problematic because the majority of consumers actually prefer digital communication with debt collectors. According to research, many debtors are more likely to engage with collection agencies when contacted by email or text message than by phone or traditional mail. The rise of these technologies has made it easier for people to manage their debts without feeling overwhelmed by the process. For consumers in New York, the proposed legislation could effectively take away a tool that could help them avoid debt-related anxiety, delays, and confusion.
The Pitfalls of New York City’s Proposed Laws for Business Operational Costs
Beyond consumer experience, the New York City proposed further amendment would negatively impact businesses’ bottom line. Studies have found that customers contacted digitally make 12% more payments than those contacted via traditional channels; this will be eliminated under the proposed amendment. Whether collecting in-house or using a third-party agency, the additional operational costs that go into traditional methods like outbound dialing and snail mail have always made initiating communication via digital channels a more cost-effective way to collect—an option that will no longer be afforded to New York City residents.
Even before the release of the additional amendments, businesses and agencies executing outbound call strategies and leveraging dialer technologies faced the reality that 49.5% of consumers take no action after a collection call—and, again, that’s if you can actually get a customer to answer the phone.
And for collectors relying on physical letters to make contact or gain consent, the process is even slower and easily ignored or lost by the consumer—and more costly for the business. Sending letters has become significantly more expensive with the cost of a single paper letter often exceeding 75 cents, depending on the number of pages per letter and volume. If you then take into consideration that contacting first through a customer’s preferred channel can lead to a more than 10% increase in payments and 59.5% of consumers prefer email as their first choice for communication—snail mail isn’t just expensive thanks to the price of paper and stamps, but it can also negatively impact repayment rates from late-payers who prefer digital contact.
NYC Residents Should Receive the Same Digital Communications Benefits All Non-NYCers Receive
The primary goal of these regulations should not be to ban digital communication methods, but rather to regulate them in a way that safeguards consumers from harassment while maintaining their access to modern, efficient forms of communication. Digital communication offers consumers more control over how and when they are contacted, with email and text message platforms incorporating built-in features like unsubscribe options and opt-out mechanisms to prevent unwanted communication. New York City’s stricter rules would leave consumers at a disadvantage, especially those who are less likely to answer phone calls.
In contrast, the rest of the country allows consumers to receive important information about their debts through digital means without additional barriers. For consumers outside New York City, debt collectors can proactively send communications through email and text, as long as these messages include clear opt-out options, such as “reply STOP” for text messages or unsubscribe links for emails. Strict penalties exist for failure to honor opt-out requests, ensuring that consumers retain the ability to control their communication preferences. Furthermore, digital communications in these areas are subject to the same frequency limitations as traditional methods under the Fair Debt Collection Practices Act (FDCPA) and Regulation F, which means consumers still have protections against excessive or harassing contact.
The overwhelming preference for a full digital banking experience, as mentioned above, means many consumers already opt-in and communicate through primarily digital channels with their creditors. Requiring consumers who have already opted-in to have to again opt-in to digital communications in order to discuss the same account with a collection agency adds burden to consumers. When a consumer provides their electronic contact information (email address or cell phone number) to the creditor, there should be little doubt that the consumer desires to communicate electronically. If the consumer does not, they can unsubscribe or opt out from continuing to receive messages through these channels.
Of the millions of email communications TrueAccord sends, only 0.10% of consumers unsubscribe, most using the unsubscribe link provided in the email. And out of the millions of text messages we send, all of which contain the phrase “Reply STOP to opt-out,” on average only 2.07% of consumers reply stop.
Additionally, email addresses offer a distinct advantage over physical addresses or phone numbers in that they remain consistent over time, while other contact details may change more frequently. For consumers who move often, such as military families, email ensures that they don’t miss important communications because of an outdated address or phone number. By allowing digital communication, New York can help ensure that important debt-related messages are delivered without the risk of missed communication due to address changes.
A balanced approach could allow debt collectors to reach consumers via email and SMS in a regulated manner, ensuring that consumers are protected from excessive or intrusive contact, while still enabling them to resolve their debts on their own terms.
You’ve seen the headlines—the federal government last week resumed collecting defaulted student loan payments from millions of people for the first time since the start of the pandemic. And how—debt collection will be through a Treasury Department program that withholds payments through tax refunds, wages and government benefits. This will undoubtedly have negative effects on credit scores and the resulting loss of access to funding going forward for many Americans.
How did we get to this point where so many people with student loans are unable to make payments on them? Taking a look back at the financial activity of those who deferred student loan payments in the first place gives us a good jumping off point, and combined with the challenging economic landscape over the past several years we can begin to understand the precarious financial situation unfolding.
Student Loan Holders Took on More Debt During the Pandemic
Based on data analysis we reported on in “Consumer Finances, Student Loans and Debt Repayment in 2023”, the trend for student loan holders who deferred their payments from 2020-2022 was to take on more debt. Data showed that the total average debt of a consumer with student loans increased 14.6% from 2020 to 2022, while that of consumers without student loans decreased 4.8%.
In 2022, student loan holders increased their average number of open trade lines by 10.3% from 2020, while open trade lines decreased by 7.7% for non-student loan holders. Breaking it down, those with student loans added credit cards (up 8%), personal loans (up 4%) and personal installment loans (up 5%) to their debt balances, with the average total balance of other loans more than doubling from 2020-2022, from $2,078 to $4,747, a 128% increase.
Economic Stressors Have Persisted, Are Likely to Continue
While inflation has cooled significantly compared to the highs of 2021 and 2022, prices remain elevated and interest rates haven’t returned to pre-pandemic levels. Uncoincidentally, household debt and credit card balances have been on a steady upward climb for the past few years, suggesting that rather than catching up with their finances, many Americans have continued to find new sources of funds to support their lives.
Americans’ total credit card balance was $1.2 trillion as of Q4 2024, marking the 10th time in 11 quarters where credit card debt increased or stayed the same. In a bigger picture view, credit card balances have risen by $441 billion since Q1 2021—adding up to a 57% increase in less than four years. Given the still-high interest rates, stubborn inflation (that may or may not go back up due to tariffs) and other turbulent economic factors, these balances are likely to keep climbing.
A Perfect Storm of Financial Challenges for Student Loan Holders
While deferred payments on student loans granted a temporary reprieve for borrowers, the new debt accrued effectively negated the gains of deferral, leaving many student loan holders with monthly debt obligations that were only manageable without having to pay back student loans. The CFPB reported that as of September 2022, 46% of student loan borrowers had scheduled monthly payments for all credit products (excluding student loans and mortgages) that increased 10% or more relative to the start of the pandemic.
Monthly financial obligations directly impact a consumer’s overall financial flexibility, and maxing out budgets to keep up with the economy puts people in a precarious situation when demands on finances change. That’s what we’re seeing now—consumers put student loans on the backburner and weren’t able to financially prepare for when they would come due again.
What Happens Next?
The outlook isn’t great: financially at-risk consumers with student loans will either go into collections for their student loans or will start missing payments on other loans in an attempt to pay back student loan debt. When there is only so much in the bank to work with and the cost of accessing new money is high, consumers will have to prioritize financial obligations and inevitably won’t be able to cover them all.
As we’ve learned from working with more than 40 million consumers in debt, empathy goes a long way, and understanding your customers’ financial situation is the first step to effectively engaging them in debt collection. For creditors and debt collectors looking to engage consumers in debt collection right now, it’s important to have a comprehensive, omnichannel communication strategy and be ready to meet the customer when and where they are ready to prioritize your account. This means don’t limit communication channels and do offer flexible options for repayment that consumers can explore, evaluate and select on their own time.
To engage your customers earlier in delinquency before charge off, consider leveraging consumer-preferred digital channels and AI-enabled decisioning for optimal results. Implementing a SaaS tool to automate digital communications will help you keep up with rising delinquencies while keeping your costs low.
Today TrueAccord Corp. (TrueAccord), a digital-first debt collection agency that is reinventing the collections experience with the use of machine learning technology to help customers resolve their debts, announced it has acquired Sentry Credit, Inc. (Sentry). Through this strategic acquisition, TrueAccord continues to accelerate its industry-leading growth with an expanded client portfolio and the addition of Sentry’s first-party collection and litigation services.
Sentry is a debt collection agency based in Everett, WA that has delivered both top tier recovery results and exceptional customer service for more than 30 years. TrueAccord and Sentry share the goal of breaking the mold by providing a personalized and empathetic approach for consumers in debt. TrueAccord has been delivering on its mission since 2013, having served more than 40 million consumers in debt with a more humane collection experience while delivering unmatched liquidation rates as the leader in digital-first collections for the Buy Now Pay Later, fintech, telecommunications and credit union industries, among others.
Sentry will continue to service its clients with the same commitment and excellence they’ve come to expect. Over time, Sentry clients will also benefit from TrueAccord’s industry-leading digital capabilities, unlocking new efficiencies and enhancing the client and consumer experience.
“The integration of Sentry into our ecosystem supports TrueAccord’s continued growth, expands our service offerings, and enhances our ability to deliver a better debt collection experience to even more consumers,” said Mark Ravanesi, CEO of TrueAccord. “Bringing our digital-first strategy to Sentry’s expansive client portfolio will further expand our footprint and leverage TrueAccord’s advanced data and technology capabilities to improve outcomes for clients while positively impacting the financial lives of millions more U.S. consumers.”
As the debt collection landscape has evolved and modernized, TrueAccord has grown by leading the industry on technology innovation and helping to guide consumer-friendly regulatory developments, becoming uniquely positioned to acquire and seamlessly integrate traditional debt collection agencies onto its digital platform. The acquisition of Sentry underscores TrueAccord’s commitment to reinventing the collection industry in a way that delivers outstanding results while recognizing consumers’ individual needs and preferences throughout the financial lifecycle.
Corporate Advisory Solutions (CAS) acted as the buy-side M&A advisor and Troutman Pepper Locke LLP provided legal advice to TrueAccord in this transaction.
About TrueAccord
A subsidiary of TrueML Technologies, TrueAccord is the trusted industry leader in third-party debt collection, leveraging data science and technology to deliver superior results and a best-in-class consumer experience. Since 2013, TrueAccord has served more than 40 million consumers in debt with a more humane collection experience while delivering unmatched liquidation rates as the leader in digital-first collections for the Buy Now Pay Later, fintech, telecommunications and credit union industries, among others. Visit www.trueaccord.com and follow on LinkedIn to learn more.
TrueAccord is proud to announce that Katie Neill, its General Counsel & Chief Compliance Officer, has been appointed to the Debt Collection Advisory Committee of the California Department of Financial Protection and Innovation (DFPI) for the 2025-2027 term.
This board is comprised of seven members who provide feedback to the DFPI for its debt collection licensing program. The diverse group includes a consumer advocate and representatives from the debt collection, debt-buying, third-party collection, and collection law industries. The committee advises the Commissioner on matters related to the debt collection business, including proposed fee schedules and other requirements.
TrueAccord has been previously represented in this group when its founder, Ohad Samet, served on the inaugural Debt Collection Advisory Committee in 2021. As the debt collection industry has evolved to meet consumer needs and technological advancements, the DFPI has focused on better protecting California consumers, promoting responsible innovation, reducing regulatory uncertainty for emerging financial products, and increasing education and outreach to vulnerable groups.
As a leader in digital-first debt collection, TrueAccord is invested in reinventing the industry for technology-enabled and consumer-friendly outreach that fundamentally changes the approach to debt collection. In her role at TrueAccord, Katie is instrumental in shaping the policies and controls necessary to ensure legal and regulatory compliance amidst the innovation that drives business goals.
“It’s an honor to be appointed to the Debt Collection Advisory Committee and have an opportunity to impact the future of consumer finance regulation in California,” said Katie Neill. “I look forward to contributing my expertise in consumer-focused, technology-driven debt collection practices to support the DFPI’s mission of protecting consumers and fostering responsible innovation within the industry.”
About TrueAccord
TrueAccord is the trusted industry leader in third-party debt collection, leveraging data science and technology to deliver superior results and a best-in-class consumer experience. Since 2013, TrueAccord has served more than 40 million consumers in debt with a more humane collection experience while delivering unmatched liquidation rates as the leader in digital-first collections for the Buy Now Pay Later, fintech, telecommunications and credit union industries, among others. Visit www.trueaccord.com and follow on LinkedIn to learn more.
What do canceled hair appointments and increased lipstick and beer sales have in common? These untraditional indicators, among other discretionary expenditure trends, often show consumer sentiments around finances well before a recession hits. Coming out of 2024, the average U.S. household owed $11,303 on credit cards, and while credit card charge-off rates and delinquencies both declined slightly, experts are not declaring a definitive turnaround given the ongoing economic uncertainties and high balances. Consumers today are confronted with new developments regularly, leading to “considerable turbulence” in the words of JPMorgan Chase CEO Jamie Dimon, and without much guidance on what the implications are for their personal financial outlook, which understandably affects their spending and budget considerations.
The main challenge in engaging with consumers in debt in today’s economic climate is how to offer them an affordable way forward. Other challenges for businesses’ debt collection operations come in the forms of regulatory changes impacting innovation and uncertainty about staying in compliance.
As you try to keep up with your bottom line in a rapidly evolving consumer financial landscape, let’s look at what you should consider as it relates to debt collection moving forward in 2025.
What’s Impacting Consumers?
It’s important to note that this report is from data covering a period of time before the majority of new tariffs went into effect, and everyone from Wall Street to consumers are waiting to see what happens next. Against a backdrop of an erratic market and general unease about the future of the U.S. economy, inflation reports offered a bright spot showing cooling in March to close out Q1. The consumer price index (CPI), excluding volatile food and energy costs, increased 0.1% from February, climbing 2.4% from a year earlier—the least in nine months and lower than expected. The overall CPI declined 0.1% from a month earlier, the first decrease in nearly five years, reflecting a decline in energy costs, used vehicles, hotel visits, car insurance and airfares.
The overall jobs numbers from March signaled a solid labor market, with employers adding 228,000 jobs and the unemployment rate changing little to 4.2%. Job gains showed up
in health care, social assistance, transportation and warehousing, along with retail trade, which reflected the return of workers from a strike, while federal government employment declined as a result of wide-reaching layoffs.
The Federal Reserve (Fed) held rates steady at 4.25-4.50% in March. In its statement following the March meeting, the Fed stated that “uncertainty around the economic outlook has increased.” As a result, the Fed lowered economic growth expectations to 1.7% gross domestic product (GDP) growth in 2025, down from a 2.1% estimate, while upping the projected core PCE inflation rate to 2.8% from 2.5%. The next meeting is on May 6 and while many still expect two rate cuts this year, the outcome will reflect the bank’s outlook given the new landscape of tariffs and their anticipated impact on inflation.
In February, the Fed released its Quarterly Report on Household Debt and Credit for Q4 2024, which showed total household debt increased by $93 billion in Q4, to $18.04 trillion. The report also showed that people are having more trouble paying off that debt, with credit card balances increasing by $45 billion to $1.21 trillion and auto loan balances increased by $11 billion to $1.66 trillion. Delinquency rates ticked up 0.1% from the previous quarter, with 3.6% of outstanding debt now in some stage of delinquency. Transition into serious delinquency, or 90+ days past due (DPD), also increased for auto loans, credit cards and HELOC balances.
Experian’s Ascend Market Insights from February 2025 data showed that overall delinquent balances (30+ DPD) increased by 16.67%, driven by a 537.4% increase in delinquent student loan balances, a 16.28% increase for first mortgages and a 4% increase for bankcard balances. The huge surge in delinquent student loans is due to an increase in the volume of 90 DPD data furnishers have started to report after the pause on student loan payments ended.
By the end of February, nearly 8 million people with student loans had missed resumed payments and were met with plunging credit scores. As it stands, 1 in 5 people who are supposed to be making payments on their federal student loans are more than 90 DPD, nearly double the percentage of delinquent borrowers since the pandemic hit and the government paused payments, with reasons for delinquency ranging from inability to pay and difficulties working with servicers to missed communications that never reached the recipient.
The CFPB, Regulations and Compliance are Evolving
While the Consumer Financial Protection Bureau’s (CFPB) normal activity has been disrupted due to changes in direction from the administration, it did release a report looking at national rental payment data from September 2021 to November 2024 showing that the percentage of renters who paid late fees in the last year reached 23% in February 2023. While the rate had declined to slightly less than 14% in November 2024, the CFPB’s analysis found that the median outstanding rental balance rose 60% between September 2021 and November 2024, suggesting increased financial distress among affected households.
Meanwhile, the Federal Communications Commission (FCC) is seeking public input on identifying FCC rules for the purpose of alleviating unnecessary regulatory burdens. In a public notice released March 12, 2025, the FCC announced the Commission is seeking comments on deregulatory initiatives to identify and eliminate those that are unnecessary in light of current circumstances. The FCC notice stated: “in addition to imposing unnecessary burdens, unnecessary rules may stand in the way of deployment, expansion, competition, and technological innovation.”
In the meantime, two FCC Orders about the Telephone Consumer Protection Act (TCPA), which applies only to calls and texts made by an automated telephone dialing system (ATDS) and prerecorded or automated voice calls (aka robocalls or robotexts) come into effect. First, a 2024 Order released last February impacting revocation of consent to receive autodialed calls and texts and prerecorded or artificial voice calls. The 2024 Order conflicts with the CFPB’s Regulation F Debt Collection Rule about the scope of an opt-out. Second, is a 2025 Order released this past February aiming to strengthen call blocking of illegal calls, which may result in the blocking of lawful debt collection calls and texts.
Debt collectors and other companies impacted by these two orders may want to submit comments to the FCC identifying the particularly burdensome aspects that could be revisited and slightly revised to be consistent with consumer preference, consistent with other laws and regulations (like Regulation F), and less burdensome on companies.
Eyes will continue to be on the developments with the ever-evolving regulatory landscape and what happens with the CFPB, which will impact how businesses both comply with regulations and innovate through technology in consumer financial services.
Consumer Sentiment
The Fed’s March Survey of Consumer Expectations showed that inflation expectations increased by 0.5% to 3.6% at the one-year-ahead horizon while consumers’ expectations about their households’ financial situations deteriorated with the share of households expecting a worse financial situation one year from now rising to 30%, the highest level since October 2023. The report also showed Unemployment, job loss, earnings growth and household income growth expectations also deteriorated.
The latest University of Michigan consumer sentiment survey showed that sentiment fell to 50.8, down from 57.0 in March. The drop, a 10.9% monthly change and 34.2% lower than a year ago, was the lowest reading since June 2022 and the second lowest in the survey’s history since 1952. Respondents’ expectation for inflation a year from now jumped to 6.7%, the highest level since 1981. The current economic conditions index and expectations measure dropped by 11.4% and 10.3% from March respectively.
Similarly, the Conference Board’s Consumer Confidence Index in March fell by 7.2 points to 92.9. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, also decreased 3.6 points to 134.5 while the Expectations Index based on consumers’ short-term outlook for income, business and labor market conditions fell 9.6 points to 65.2, the lowest level in 12 years and well below the threshold of 80 that usually signals a recession ahead.
What Does This Mean for Debt Collection?
All of the economic indicators and pessimistic consumer outlook, especially given stock market turbulence that impacts many Americans’ retirement savings, makes it likely that consumers across all income brackets will pull back on discretionary spending. And for those already financially stressed, the added burden of increased inflation due to tariffs could make it harder for budgets to meet debt obligations. For lenders and collectors, here are some recommendations for your debt collection strategy in 2025:
Ensure Your Messages Are Getting Through. If you’re calling someone who prefers to receive information by email, they likely won’t answer and get your message. Similarly, if you’re using digital channels and your email gets caught in a spam folder, your message won’t make it to the intended recipient. Best practices for email delivery and deliverability are just as important as using the right channel. Ensure your collection partners who claim to engage consumers via email can back it up with the metrics to prove that their messages actually make it through.
Do More With Less. Technology exists today that can create efficiencies across many aspects of debt collection operations, which means increasing account volume doesn’t have to equal higher costs. Look for ways you and your collection partners can leverage new tech to streamline operations and you can reap the benefits of improved operational efficiency, compliance efforts and consumer experience.
Get Your Lawyer on Speed Dial. Or ensure your debt collection partner is keeping tabs on the rapidly evolving regulatory and compliance landscape to inform their practices. There’s a lot going on, quickly, and if you miss something the repercussions of noncompliance could cost you financially or reputationally.
TrueAccord is a machine-learning and Al-driven 3rd-party debt collection company that is reinventing debt collection. We make debt collection empathetic and customer-focused and deliver a great user experience.
Our digital-first approach to debt collection creates a cycle of collections growth:
1. Improve the perception of the industry
2. Provide a personalized experience
3. Build brand equity and collect
