Tag: digital debt collection

Collections Economics 101 for Digital Lenders

By on February 3rd, 2022 in Industry Insights
TrueAccord Blog

With digital lending via neobanks and fintechs on the rise, consumers have more options than ever for obtaining loans. There are a lot of considerations for these digital financial providers when building their business models, but one important and often-overlooked strategy is recovery for delinquent accounts. We sat down with TrueAccord’s Chief Growth Officer, Sheila Monroe, who has held numerous executive-level positions at TrueAccord on top of a multi-decade career in collections, to learn more about the economics of collections and what new lending players should look for when considering a collections solution.

What are the economics of collections metrics for delinquent accounts?

There are a number of metrics to pay close attention to in the management of delinquent accounts. These can be separated into two main categories, portfolio metrics and operational metrics. 

Portfolio metrics address the health of the entire portfolio or a defined segment of a portfolio (a certain vintage or a certain risk group or even a particular product). For a U.S.-based lender following GAAP accounting, the lender’s net loss rate (or net charge off rate) is the ultimate metric. It tells investors and management what percent of the portfolio is lost as a result of non-payment, which is a key metric in the overall health of the business. Private equity and venture capital firms, along with companies who invest in a lender’s receivables, will be most interested in a predictable loss rate in line with investment objectives.

Operational metrics are also important in managing delinquency and losses. Operationally, lenders should understand how well consumers follow through on payment plans or promises by monitoring a promise kept rate as well as what percent of payments cover the total payment due to cure the account. For measuring efficiency, lenders look at the ratio of delinquent accounts per collection employee, often referred to as accounts per employee (APE) or accounts to collector ratio (ACR), as well metrics like promises and dollars collected per paid hour of operations. Many also look at the cost to collect a dollar or the cost per delinquent account. 

What are credit loss provisions and why are they important to financial providers?

Lending institutions will inevitably have loans that go into default, and this is planned for in their financial modeling. For lenders, even the largest international banks, loan losses are the largest expense line in the budget so it’s important to prepare for those losses. When money is loaned, whether in a 30-year mortgage, a 5-year car loan, or a revolving credit card, some of those accounts will go past due, and some will fail to pay long enough that they get charged off as bad debt (credit loss), and it can take years to see that happen. 

But when account balances do get charged off as bad debt, the lender must have enough money “reserved” to absorb those losses and still be able to operate. So any lending company with investors will need to have a reserve for losses that shows up in their balance sheet. Depending on market conditions and actual loss rates, these reserves can be adjusted upward or downward periodically to ensure what is commonly referred to in financial services as “safety and soundness”. This is even more important if a lender takes consumer deposits to fund any of their lending. 

What is a roll rate in debt collections?

The roll rate is the sum of account balances that moves from being in one stage of delinquency to the next. For example, if 500 accounts with balances totalling $600,000 are one month past due (often called bucket 1 or one down), and the next month there are 150 accounts with balances totalling $125,000 that are 2 months past due, there was a 20.8% roll rate from buckets 1-2. Roll rates can also be calculated based on number of accounts, but that metric is rarely used in a performance analysis. 

How do lenders and debt collectors use roll rates?

Roll rates are primarily used to forecast future charge-off levels, to develop sophisticated risk scoring models to be used in underwriting or collection strategy, and to evaluate the effectiveness of a collection strategy or process. The collection process is designed to effectively intervene when consumers miss payments and to encourage and enable them to get back on track quickly. The longer loans and credit cards go unpaid, the more they accumulate late fees and finance charges and become much more difficult to get back to good standing. 

What are “good” roll rate ranges in debt collections?

This can be tricky to determine because portfolio objectives and type of debt come into play. For example, some products might be aimed at riskier customers, those with thin or no credit profiles, or those who have lower credit scores and it would be disadvantageous to compare those roll rates to those of a prime product. It’s important to understand the objectives of a lending product when evaluating performance. Depending on their objectives, some lenders target high-risk customers and have high credit losses, padded by high fees, while others target prime borrowers and enjoy low losses.  

If a lender has been in business long enough, they can benchmark roll rates against prior years, but need to account for any changes to underwriting and macro economic conditions. For example, banks can compare delinquency and charge off rates to other banks or look at performance by vintage, meaning how are all the accounts that were opened during a specific period of time performing. Peer benchmarking can be difficult for Fintech and other young lenders who often don’t have a base of publicly traded competitors who must report these key metrics in shareholder reports, but there are some consortium groups that can help (Auriemma Roundtable Group).

Roll rates are early indicators of collection effectiveness and often require more than a glance to understand if they are good. Often looking at connected roll rates or flow rates is more telling. For example, a high roll rate one month may be the product of a short billing month, while looking at a broader metric like debts that rolled from current to 3 months or those that went from 4 months to charge-off, might be a more telling indicator.  

What are “good” ranges of cost to collect?

Generally, collection costs include the cost of collection staff wages and fringe benefits, software licensing, management overhead (for quality monitoring, training, supervision, workforce management and others), communication costs (letter and postage, telephony, SMS and other costs), equipment, supplies, scrubs and skip tracing information, and premises (leases and maintenance). If the collection function is completely outsourced, a lot of these costs will be wrapped into the cost per hour or cost per FTE being charged. I’ve seen costs on a per account basis range anywhere from $4.50 to more than $16 for unsecured consumer debt, depending on the strategy, the type of portfolio, and the location of the operation.  

As a lender, it’s important to know what you are optimizing for. Spending more to keep losses low may seem like a no brainer, but there is a point of diminishing returns and, worse, a point in which more collection activity drives disproportionate costs in the forms of complaints, litigation, customer attrition and reputational damage. It may make sense for your business to manage delinquency and charge off levels near your industry’s benchmark or even higher, but put more thought into customer retention and how to get them using your product again once their finances have stabilized.  

Why should a company that’s new to lending have a collections partner?

New lenders go into business to lend money. They start with a target audience and product market fit, and tailor underwriting to their growth aspirations and customer value proposition. That is absolutely what any new lender should focus on. But often lenders are either naive about the impact of losses (maybe they think their underwriting will be so good they don’t need to think about collections), or they don’t have a full appreciation of how managing losses and taking advantage of recoveries will enable them to lend more money and retain more of those hard-earned customers. Having a trusted collection partner can allow the lender to focus on what they do best while reaping the benefits of sound practices to manage delinquency.  

How do you measure success?

Ultimately, it will be a combination of your lending strategy (did you lend to the right people) and your collection strategy (how well can you get customers back on track after missing a payment) that will influence portfolio metrics. But none of these metrics will drive outstanding performance in isolation. To be effective, it’s important to understand a lender’s reach into the delinquent customer base. What percent of customers are actually engaging with the collection effort? A calling strategy results in about 2% of phone calls reaching a “right party” (the person responsible for paying) and about 1.5% resulting in a payment. 

More lenders should look at engagement metrics – what percent of their delinquent customers actually engaged with some form of communication. In a purely digital strategy it is easy to measure email open and click rates, and SMS engagement rates as strong top of the funnel indicators. For Fintech we see a 46% email open rate and 2.5% click rate, with SMS delivering click rates between 25-32%. This is substantially higher engagement than what can be achieved in a calling environment and is better received by consumers. 

What should a digital lending company consider when choosing a collections partner?

Companies new to lending are originating loans, and therefore the entire customer relationship, online. Their customers had a digital experience to begin the relationship and they will expect a digital experience throughout their relationship with the lender. With that in mind, some things a digital lender should consider when choosing a collections partner include:

  • Does the collection company primarily communicate with my customers in their channel(s) of choice? Many collection companies will say they use email, but it is often not the primary mode of communication and can amount to less than 10% of an otherwise heavy, offensive phone calling strategy. 
  • Are customer communications personalized when it comes to the channel being used, the time of day the communication occurs, the content and tone of the message or do they segment broad groups of customers for a one size fits all treatment strategy? 
  • Does the collection company leverage any machine learning that could augment what I already know about my customers based on my internal data alone?
  • What process does the collection company have for continuous improvement enabled by a strong champion/challenger testing capability? 
  • How much execution risk does my collection partner expose me to? Operations that rely on more collection agents will carry more risk exposure. Poor agent attendance or high attrition will impact expected coverage. Poor quality or agent errors across a varied labor pool will impact collection results and pose compliance risks. Cultural bias or unneutralized accents of offshore agents have been shown to result in lower contacts and lower average commitments than more expensive on-shore agents.
  • If you are outsourcing to an agent-intensive provider, make sure you understand what drives the agent incentive plan. Agents interested in making incentives don’t always have your customers’ best interests in mind.

TrueAccord Announces Results Confirming Effectiveness of Digital-First Retain Product for Early-Stage Delinquencies

By on January 25th, 2022 in Company News, Machine Learning, Product and Technology

With more than 1 million consumer accounts now managed through the intelligent, client-branded product, results show 40% more effective than leading “call and collect” vendors

LENEXA, Kan., Jan. 25, 2022 — TrueAccord Corporation, a debt collection company offering machine learning-powered digital recovery solutions, today announced results following the September 2021 rollout of Retain, the client-branded product that addresses early-stage recovery challenges for organizations with customers with delinquent accounts. TrueAccord Retain is now being used by creditors to manage more than 1 million consumer accounts and has shown to be 40 percent more effective at repayment than traditional “call and collect” debt collection vendors. 

TrueAccord Retain, which harnesses digital technology and machine learning to deliver a personalized, effective early-stage recovery strategy, significantly outperformed three traditional “call and collect” agencies across several of an anonymous client’s portfolios. Relative to the best-performing “call and collect” vendor for each product portfolio, TrueAccord Retain drove a 24 percent improvement in roll rate, a 28 percent improvement in early-stage gross flow through rate and a 40 percent improvement in late-stage gross flow through rate*.  

“With more than 1 million consumer accounts now being managed through Retain, we’re able to see the robust results of the product on improving early-stage delinquencies for our clients,” said Mark Ravanesi, CEO of TrueAccord Corp. “The results of our client’s evaluation were unambiguous: Retain’s machine learning-powered, digital-first approach resonated with consumers and drove significant growth for the early-stage recovery business. With a lingering worker shortage, especially in the call center space, we expect these performance numbers to continue to grow as more consumers are brought into the Retain ecosystem in 2022.”

Powered by TrueAccord’s industry-leading tech stack, key benefits of Retain include a simple, intuitive and effortless-to-use digital platform leading to great user experience, constant A/B testing and optimization to reduce friction and boost conversion rate, infinite scalability, and second-to-none channel deliverability. Retain implements e-commerce-based innovations like the focus on digital experience and outreach, machine learning-based personalization, and deliverability at massive scale for early-stage use. 

To learn more about TrueAccord and its digital-first recovery solutions, visit www.TrueAccord.com and follow @TrueAccord on Twitter and LinkedIn.

*This data comes from an anonymous client’s evaluation of performance of different delinquency  approaches  side-by-side. The client randomly assigned credit and retail card accounts to TrueAccord Retain and the other vendors. Key success metrics included roll rate, or the percentage of dollars that became progressively delinquent, and gross flow through rate, or the percentage of dollars that flowed from one delinquency category across multiple subsequent categories.

About TrueAccord

TrueAccord is the intelligent, digital-first collection and recovery company that leaders across industries trust to drive breakthrough results while delivering a superior consumer experience. TrueAccord pioneered the industry’s only adaptive intelligence: a patented machine learning engine, powered by engagement data from over 16 million consumer journeys, that dynamically personalizes every facet of the consumer experience – from channel to message to plan type and more – in real-time. Combined with code-based compliance and a self-serve digital experience, TrueAccord delivers liquidation and recovery rates 50-80% higher than industry benchmarks. The TrueAccord product suite includes Retain, an early-stage recovery solution, and Recover, a full-service debt collection platform.

TrueAccord Brings Collections to the Synapse Fintech Ecosystem

By on January 5th, 2022 in Company News
TrueAccord Blog

Collections-as-a-Service offering is seamlessly integrated to service customer debt accounts while delivering consumer-friendly, digital-first experiences

LENEXA, Kan., Jan. 5, 2022 — TrueAccord Corporation, a debt collection company offering ML-powered digital recovery solutions, today announced a partnership with Synapse as an expansion of its Collections-as-a-Service offering. The partnership will bring the best-in-class collection and recovery capabilities of TrueAccord to Synapse’s fintech partners and customer base, integrating collections into the customer-centric fintech ecosystem.

Given the rapid growth in fintech lending and banking-as-a-service (BaaS) and the steady rise in delinquencies, consumers are expected to fall behind on their payments and require assistance to repay their debts. Synapse, a BaaS platform that provides the infrastructure and leverages APIs to enable companies to quickly build and launch best-in-class financial services, selected TrueAccord to join their growing tech stack of fintech partners with similar approaches to financial services and customer experience to address the need for debt collection when it arises. 

“We chose to partner with TrueAccord to add debt repayment services to Synapse’s BaaS ecosystem, because it aligns with consumer preference for a frictionless, digital-first financial services experience, especially when they fall behind,” said Sankaet Pathak, Founder & CEO of Synapse. “We want to ensure our customers have a good experience across all aspects of their financial journey, and providing that in collections is just as important for customer retention as it is in origination and servicing.”

Through an API integration, TrueAccord’s Recover debt collection solution will service charged-off debt accrued through Synapse’s lending platform. This will expand the Synapse fintech suite to follow a customer from loan origination to application and all the way through to collections, if needed. Additionally, TrueAccord’s Retain solution for early-stage delinquencies will be available on a referral-basis to the fintech partners in the Synapse ecosystem as an option to help get customers back on track with payments before being sent to collections.

“As a fintech company itself, TrueAccord knows the fintech business and customer better than most, especially in debt collection,” said Mark Ravanesi, CEO of TrueAccord Corp. “We speak the fintech language of consumer communication preferences, data and machine learning-driven technology, and no credit bureau reporting, offering customers a streamlined and hassle-free way to settle their debts and get back on track with their finances.”

With open banking on the rise, more companies will look for ways to incorporate collections into their service offerings. TrueAccord’s industry-leading Collections-as-a-Service product will enable  fintech innovators to scale their businesses and offer best-in-class recovery with a customer-centric approach.

To learn more about TrueAccord, its API and built-in collections solutions, click here and follow @TrueAccord on Twitter and LinkedIn.

About TrueAccord

TrueAccord is the intelligent, digital-first collection and recovery company that leaders across industries trust to drive breakthrough results while delivering a superior consumer experience. TrueAccord pioneered the industry’s only adaptive intelligence: a patented machine learning engine, powered by engagement data from over 16 million consumer journeys, that dynamically personalizes every facet of the consumer experience – from channel to message to plan type and more – in real-time. Combined with code-based compliance and a self-serve digital experience, TrueAccord delivers liquidation and recovery rates 50-80% higher than industry benchmarks. The TrueAccord product suite includes Retain, an early-stage recovery solution, and Recover, a full-service debt collection platform.

How TrueAccord Embraces Machine Learning to Create Positive Consumer Experiences in Debt Collections

By on December 23rd, 2021 in Industry Insights, Machine Learning, Product and Technology
TrueAccord Blog

By Laura Marino

TrueAccord’s Chief Product Officer, Laura Marino, was recently featured in the New Standard in Debt Collection panel as part of the Beyond Digital: The Next Era in Collections summit. As a civil engineer turned product management executive, Laura has a unique viewpoint on the evolution of machine learning in software across a variety of industries. In this blog post, Laura shares her perspective on machine learning at TrueAccord and in collections, in general.

At TrueAccord, we know that consumers prefer digital channels and self-service. We also know that just providing the digital channels is not enough. To truly engage with consumers we need to help them throughout the journey. This is where machine learning comes in.

What is machine learning?

Machine learning is an application of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. In the context of collections, and specifically in the context of our consumer-centric approach to collections, machine learning is a wonderful tool to personalize the experience for each consumer, effectively engage with each of them, and ultimately help resolve their debt.

There has been so much hype around machine learning, but often companies that claim to do ML are really using fixed rules or heuristics (if a consumer does X, then do Y) without including any of the automatic learning and improvement. Or they may be using ML for a very specific, very limited scope – like automating some consumer support responses. The reason that leveraging ML is so difficult for something as complex as collections and recovery is that it requires a lot of expertise in data science and behavioral science, it requires a lot of user research, and it requires a lot of data.  This is not something that a company can decide to start doing overnight as an add-on.

How does TrueAccord apply machine learning to debt collection?

TrueAccord is leveraging machine learning and behavioral science throughout the entire journey, from initial engagement all the way to resolution. We were built specifically around the hypothesis that focusing on machine learning-driven, digital-first experiences was the way to transform debt collections. We have been doing this since 2013, and we have orders of magnitude more data than anyone else. Just to give you an idea: we send millions of emails per day, and hundreds of thousands of text messages per week and our ML engine learns from every open, every click, every action on our website, and every interaction with our call center agents. Because of all of this, we have something that is very hard for anyone to imitate.

Unlike traditional collections, we do not use demographic data like age, zip code, or creditworthiness to personalize the experience. Instead, we use engagement data about how the consumer responds at every step in the process.  

We have handled debts for over 24 million consumers and we have collected data about each individual interaction with those consumers. That wealth of data, combined with our ongoing user research is behind the ability of Heartbeat (our fully automated and reactive decision engine) to personalize the experience for each consumer.  We’ve seen this data-driven machine learning customer-centric approach lead to increased customer satisfaction, better repayment rates, and lower complaint rates.

Machine learning is used to personalize and optimize every step of the customer journey. The first thing we need to do is to effectively engage with the consumer.  For that we have several models: 

  • Cadence optimizer: determines the right cadence to communicate with each consumer about their debt. Specifically, it determines which day to send the next communication. We don’t have a fixed rule that says “send an email every x days.” Our decision engine decides it dynamically based on the type of debt, the consumer behavior, and where they are in the process. 
  • Send time optimizer: determines when during that day, communication should go out. A working mother who is busy with her kids in the morning and in the evening is more likely to check her messages in the middle of the day during her lunch break. A construction worker has a very early start to their day, may prefer to check messages at the end of the day.  We want our consumers to receive our communications during their preferred times so that they are at the top of their inbox and not buried under 50 other emails. Reaching people at the right time of day has a big impact. Due to our send time optimizer, we saw a 23% increase in liquidation for certain types of debts. 
  • Email content rater: we also want to make sure that the tone of our communication is one that will best resonate with a specific consumer. For each piece of content we send out, our content team has created multiple versions with different voices, ranging from very empathetic to more ‘to the point’ because different people respond to different styles. Heartbeat chooses which one to send based on what it has learned from the behavior of each consumer. 

After engaging the consumer with the right cadence, timing, and content we want to make sure that they commit to a payment plan and stick to it until their debt is resolved. For that, we have machine learning models that determine the best combination of discount and length of payment plans to offer to each consumer. The options that the consumer sees when they get to the payment plan page are tailored to them based on what Heartbeat believes will work best. The consumers can build their own plan but, if we can proactively offer options that work, we make it easier.

We also have a ‘payment plan breakage model’ that helps us identify consumers who are at risk of not making a payment so that we can proactively reach out to them and give them options. With this we were able to increase the resolution rate among customers at risk by 35%.

What do customers think about TrueAccord’s model?

We have a lot of very positive feedback from our consumers which I attribute very much to our machine learning capabilities. It is one of the things that I think is so exciting for everybody who works at TrueAccord. We consistently get messages saying, “Thank you for making it so easy. Thank you for allowing me to do it via digital channels without having to talk to anybody.” And then when people call with questions, our call center knows that they’re there to help. People definitely respond very positively to the approach we’re taking to collections.

This content originally appeared as part of the Beyond Digital: The Next Era in Collections summit. Watch the entire summit here. 

The New Standard of Excellence in Debt Collection

By on December 7th, 2021 in Industry Insights, Industry Interviews

By Sheila Monroe

TrueAccord’s Chief Growth Officer, Sheila Monroe, was recently featured in the New Standard in Debt Collection panel as part of the Beyond Digital: The Next Era in Collections summit. Having held numerous executive-level positions at TrueAccord on top of a multi-decade career in collections, Monroe is uniquely qualified to recount the historical practices of the collections industry from her point of view. In this blog post, Sheila shares her perspective on where the collections industry is heading in 2021 and beyond.  

Much has changed since I started in the collections industry in 1986 and not just in the types of communication channels used, but also in the collection strategies employed. For example, the first real meaningful change was a move from a one size fits all strategy to a much more sophisticated segmentation of consumers. 

That means “customer A” gets a very different experience than “customer B” based on their individual repayment behaviors while in collections. This type of segmentation helped companies decide calling intensity and their letter strategy: Is it a reminder letter? How frequently do we call? When do we call? 

Once organizations mastered segmentation, operational efficiency (deploying and optimizing tools aimed at reducing the amount of calling) helped the industry start down a path of reduced staffing requirements and operational effort. Collection dialers have been around for years but with the new effort towards efficiency, agencies realized that customers were willing to make commitments and payments in the interactive voice response (IVR) system. Agencies started using interactive voice messaging (IVM) to automate outbound calling journeys as much as possible. Sophisticated skiptrace waterfalls became automated as companies got smarter about data management to increase contact rates.

The industry is still largely phone based but most collection businesses are now starting to adopt digital channels, like email and SMS. Though digital channels still only make up a small percentage of total outbound activity across the industry, we’ve seen regulators respond to these modern communication platforms with the introduction of Regulation F. As a company that is leaps and bounds ahead of the industry average when it comes to digital communications, we’re excited at TrueAccord about the new legislation. What Reg F says is, “all that disruptive phone calling that is happening, it’s not what consumers want. It’s not a great experience for consumers.” It’s clarified and given a strong nod toward using digital channels. When I think about that shift toward digital, a lot of players in the industry are just doing it for efficiency and some, frankly, out of survival because of Reg F.

The CFPB is doing a good job recognizing that consumers want a change, so they are forcing collection companies to innovate or get out. They understand that consumers want to communicate in more convenient, less disruptive channels and they want to feel safe communicating on their terms. The reality is that most consumers want to pay their debts. If there is respectful personalized communication and a simple way to sign up for a repayment plan, they likely will. 

That brings me to where we are today and this continuing shift of behavior. When it comes to innovation and segmentation, changes have been about making things more streamlined for contact centers. All of that innovation has been focused inward to figure out how the company can optimize to get more for less. There’s been little attention paid to the consumer and their preferences. How can engagement with a consumer about a really sensitive topic be done in a way that meets their needs? How can we simplify the process for the consumer? How can we start to remove that stigma from the conversation? In most industries, you design with the consumer in mind and the money will follow. 

Now, we’re in the age of the consumer. Today’s consumers crave simplicity, convenience and personalization. We live in a world in which we can listen to whatever music we want to hear, stream the content we want to see, connect with friends from around the world, get a ride, and have food delivered to our doorstep all with a couple of clicks. All those apps which we know and love, pay attention to our preferences to make it even easier the next time we open them to stream or watch or buy. 

Effort is a thing of the past. Effort is reserved for things we want to do now: play a sport, take a hike, or go to our kid’s recital. So now, financial services, and yes, the collection process, which touches millions of consumers each year, needs to become simple, convenient, intuitive, personalized and ultimately, low effort.  


This content originally appeared as part of the Beyond Digital: The Next Era in Collections summit. Watch the entire summit here.

Beyond Digital: The Next Era in Collections

By on November 10th, 2021 in Industry Insights, Webinars
TrueAccord Blog

In 2013, TrueAccord was founded with the hypothesis that AI driven digital collection was the way to transform the industry. Eight years later, we are still confident in the transformational nature of our hypothesis but are still surprised how few other companies in our industry have fully embraced digital-first debt collection.

The digital revolution has been ongoing for some time now. The word “digital” itself has evolved from a high-tech term that few understood to one that is now regularly accepted as part of our everyday lives – both personally and professionally. As the digital world continues to accelerate the way in which we do everything – from paying for things to driving cars to  debt collection – it’s not enough anymore to just invest in digital. Focused strategies and understandings of more complex technologies are mandatory to getting the most out of what the digital economy has to offer.

At TrueAccord, to create powerful moments that actually help consumers, not only pay off debt, but become more financially stable and confident, we need to think bigger by putting them first. In honor of the launch of our newest product, Retain, TrueAccord hosted the Beyond Digital: The Next Era in Collections summit, which is now available in its entirety on-demand. Stay tuned for more on each of the individual sessions.

Here’s the lineup from the Beyond Digital summit:

Welcome Keynote

Ohad Samet, Co-founder & CEO, One True Holding Company

Understanding Consumers in Debt in 2021 (and Beyond)

Mark Ravanesi, CEO, TrueAccord

Jacob Kong, Chief Product Officer, Experian

Jan Hansson, VP, Debt Collection, Klarna

What Debt Collection Leaders Can learn From the Masters of E-Commerce

Naama Bloom, CMO, TrueAccord

Sunil Kaki, EVP, Beachbody & OpenFit

The New Standard of Excellence in Debt Collection: Creating World-Class Consumer Experiences Via Machine Learning

Lauran Marino, Chief Product Officer, TrueAccord

Sheila Monroe, Chief Growth Officer, TrueAccord

TrueAccord Names Kelly Knepper-Stephens as Chief Compliance Officer and General Counsel

By on October 27th, 2021 in Company News, Compliance
TrueAccord Blog

Lenexa, KS – Oct. 27, 2021 – TrueAccord Corporation, a debt collection company offering AI-powered digital recovery solutions, is proud to announce the appointment of Kelly Knepper-Stephens as chief compliance officer and general counsel. TrueAccord started in 2013 as a digital-first collection agency built to fundamentally change collections into a recovery and reconciliation process. TrueAccord was the first to offer digital solutions to the sector and continuously proves itself to be a trailblazer in an industry still dominated by traditional call-and-collect agencies. Knepper-Stephens’ appointment further confirms the company’s consumer-focused mission by tapping into one of the industry’s most sought-after counsel and compliance leaders.

“​​Compliance is at the forefront of TrueAccord’s mission, and Kelly guided the development of our robust digital collection compliance systems,” said Mark Ravanesi, CEO of TrueAccord. “TrueAccord’s investment in compliance is a win-win all around: it protects TrueAccord, it protects our clients, and—most importantly—it allows us to do right by consumers.”

An expert in debt collection law, Knepper-Stephens joined TrueAccord in 2018 as vice president of legal and compliance, where she has focused on civil litigation, government regulation, and compliance.  During her tenure, TrueAccord secured federal court victories showcasing TrueAccord’s legal compliance in two of the main FDCPA court decisions involving the use of email in debt collection: Green v. TrueAccord and Zuniga v. TrueAccord.

“As demonstrated in Regulation F, TrueAccord is the industry leader in email compliance,” Knepper-Stephens said, “I’m excited to join the mission-driven executive leadership team as TrueAccord continues to lead best practices for digital collections and beyond—empowering consumers to resolve their accounts according to their preferences.” 

Knepper-Stephens started her career in the collection space in 2011. Collections Advisor Magazine named her as one of the top 25 Women in Collections in 2016 and top 20 in 2018. She currently serves on the Board of Directors for RMAI, on the Steering Committee for the Consumer Relations Consortium, and as an ACA-certified instructor. She received her Juris Doctor degree from the George Washington University Law School and is currently barred in California, the District of Columbia, Illinois and Maryland.

A key benefit of TrueAccord is the scalability provided by the flexibility of code-based compliance, overseen by Knepper-Stephens and her team to ensure its programming is adjusted to new laws, regulations, and court decisions. The company’s patented machine-learning algorithm, HeartBeat, is augmented by its compliance checker software, mitigating risk by ensuring regulatory requirements are met before sending communications. 

Knepper-Stephens is a Receivables Management Association International (RMAI) certified receivables compliance professional and has earned the Credit & Collection Compliance Officer designation from the American Collectors Association (ACA). Prior to joining the industry, she worked as a Visiting Professor of Law at George Washington University Law School, teaching the Criminal Appellate Clinic, and as a San Diego Public Defender. Her long-standing dedication to helping others plays an integral part in her success.  

To learn more about TrueAccord’s mission and digital debt collection solutions, visit www.TrueAccord.com and follow @TrueAccord on Twitter and LinkedIn.

About TrueAccord

TrueAccord is the intelligent, digital-first collection and recovery company that leaders across industries trust to drive breakthrough results while delivering a superior consumer experience. TrueAccord pioneered the industry’s only adaptive intelligence: a patented machine learning engine, powered by engagement data from over 16 million consumer journeys, that dynamically personalizes every facet of the consumer experience – from channel to message to plan type and more – in real-time. Combined with code-based compliance and a self-serve digital experience, TrueAccord delivers liquidation and recovery rates 50-80% higher than industry benchmarks. The TrueAccord product suite includes Retain, an early-stage collection solution, and Recover, a full-service post-charge off recovery platform. 

TrueAccord Launches Retain, a Digital-First Solution for Early-Stage Collections

By on September 16th, 2021 in Company News, Product and Technology

The intelligent, client-branded product for delinquent accounts uses a patented, machine learning-driven decision engine to engage customers and boost recovery rates

Lenexa, KS – Sept. 16, 2021 – TrueAccord Corporation, which offers  intelligent digital recovery and communication products and services, today launched Retain, a new, client-branded product that addresses early-stage collection challenges for lenders and other organizations with customers with past-due delinquent accounts. Using the company’s patented, machine learning-based and self-optimizing decision engine, Retain uses engagement data from individual interactions to optimize the consumer experience while increasing recovery for clients. The client-branded product enables clients to improve collections, maintain customer relationships, and offer solutions to their customers that improve financial fitness. 

Powered by TrueAccord’s industry-leading tech stack, key benefits of Retain include a simple, intuitive and effortless-to-use digital platform leading to great user experience, constant A/B testing and optimization to reduce friction and boost conversion rate, infinite scalability, and second-to-none channel deliverability. Retain implements ecommerce-based innovations like the focus on digital experience and outreach, machine learning-based personalization, and deliverability at massive scale for early-stage use. 

“​​After seeing success with our late-stage collection solution, Recover, we identified an opportunity to apply the same customer-centric approach to early-stage collections. Our data and machine learning-driven engine proved unmatched for late-stage recoveries. Clients asked us to expand our product suite to address early-stage delinquency while keeping their customers in their brand ecosystem, and we were happy to oblige,” said Mark Ravanesi, CEO of TrueAccord Corp. 

Retain prioritizes customer engagement and preference, which is critical to preserve the  lender-borrower relationship, with custom communications, timing and channels and a self-serve payment platform that empowers customers to easily manage their accounts. Unlike traditional call-to-collect early-stage collections, which require increased outbound call center volumes, Retain engages users more effectively and efficiently with a digital-first approach and can reduce costs by transforming call centers into productive inbound operations.

“Retain takes all the innovative customer engagement processes we’ve built and adds a brand-focused retention toolkit for our clients to easily plug and play to engage with their delinquent customers,” added Ohad Samet, co-founder and CEO of One True Holding Company, TrueAccord’s parent company. “Retain adds to our product and service offerings designed to improve the experience for consumers in debt and actually help them find a path toward a better financial future.” 

For more product information or to request a demo, please visit the product page at www.trueaccord.com. 

About TrueAccord

TrueAccord is the intelligent, digital-first collection and recovery company that leaders across industries trust to drive breakthrough results while delivering a superior consumer experience. TrueAccord pioneered the industry’s only adaptive intelligence: a patented machine learning engine, powered by engagement data from over 16 million consumer journeys, that dynamically personalizes every facet of the consumer experience – from channel to message to plan type and more – in real-time. Combined with code-based compliance and a self-serve digital experience, TrueAccord delivers liquidation and recovery rates 50-80% higher than industry benchmarks. The TrueAccord product suite includes Retain, an early-stage collection solution, and Recover, a full-service post-charge off recovery platform. 

About One True Holding Company

One True Holding Company is a technology company providing business- and consumer-facing solutions in the consumer debt space. Subsidiaries include TrueAccord, which offers machine learning-based, digital- and mobile-first servicing for debt in collections and recoveries, and True Life Solutions, which offers a SaaS platform that consumers can use to contact collectors and creditors digitally.

Ensuring Regulatory Compliance While Future-Proofing Your Collections Strategy

By on September 2nd, 2021 in Compliance, Industry Insights, Webinars
TrueAccord Blog

Ensuring regulatory compliance in debt collection is a high stakes and increasingly complex process. As we know, the industry is constantly evolving and collections strategies must adapt.

At the end of July, the Consumer Financial Protection Bureau (CFPB) announced that the final rules issued under the Fair Debt Collection Practices Act (FDCPA) will take effect as planned on November 30. The new rules focus on the time, place, and manner of debt collection communications, the expansion of those communications through digital means, and enhanced disclosures that collectors must provide consumers with at the beginning of collection communications.

To help explain and analyze the new rules, TrueAccord recently hosted a webinar featuring two members of our in-house legal team: VP Legal & Compliance, Kelly Knepper-Stephens and Associate General Counsel, Katie Neill.

You can check out the full webinar on-demand, but key takeaways to listen for include:

  • Regulation F outlines the first-ever guidance for digital communication efforts in collections – effectively giving the green light to make alternative collection efforts more mainstream. The rule explicitly outlines email and SMS communication but also includes language for digital outlets that might not be in use for collections today or even in existence yet – a nod to social media and consumers willingness to be contacted privately on those platforms.
  • Furthermore, the rule does not change the federal law as it relates to consent to email. No consent is required to send debt collection emails, just like no consent is required to make calls or send letters. 
  • “The devil is in the details for Regulation F;” the implementation of each new provision turns on the Bureau’s explanation in the preamble and examples in the comments.  Legal and compliance teams should be the engine that makes sure the organization is in compliance with this guidance when the rule takes effect later this year.
  • Unlike regulations in regards to phone-based collections, there is no cap on outreach frequency in digital communications like email. This is because consumers and email providers self-regulate the communications frequency – collectors must design deliverability carefully to be successful, and if collectors email without a self-imposed cap their communications will be marked as spam or not delivered. 
  • As a digital-first collections agency, TrueAccord is ahead of and prepared for the guidance that will be put in place at the end of November. As a leader in this style of collections, TrueAccord leveraged a lot of data and consumer preference insights to help inform these new rules. The issuance of Regulation F is a significant validation by the top financial services regulator of TrueAccord’s business model.

Inaugural Advisory Committee Meeting of the California Department of Financial Protection and Innovation (DFPI) Prioritizes Tech Innovation, Consumer Communication

By on August 24th, 2021 in Industry Insights
TrueAccord Blog

On July 28, the debt collection advisory committee of the California Department of Financial Protection and Innovation (DFPI), whose mission is to better protect California consumers, promote responsible innovation, reduce regulatory uncertainty for emerging financial products and increase education and outreach to vulnerable groups, held its inaugural meeting. TrueAccord cofounder, Ohad Samet, who is one of seven founding committee members, joined to set priorities and kick off the committee’s activities. 

Samet’s voice on the committee, which is made up of a cross-section of industry experts from lawyers to academics to executives, brings his nearly two decades of experience in implementing technological and machine learning practices in fintech and debt collections, as well as the consumer preferences and trends uncovered through TrueAccord’s data-focused and more consumer-friendly approach to collections. 

“We’ve been able to find a way, as part of the Consumer Advisory Board of the CFPB (Consumer Financial Protection Bureau), to meet with consumer advocates and more traditional industry players to find that space where, if we serve consumers effectively using tech and we find alignment, everyone wins,” said Samet in his opening remarks of the meeting. “It allows consumers to be served well and industry players to be able to operate in a way that is actually cost-effective and appreciated by everyone involved. I hope to bring that type of forward- and consumer-focused thinking in the collections space to the DFPI. Through use of tech, consumer research, listening to what consumers want and aligning with them at scale, we can make the world a better place. I really think this can be the result of our work here.”

Some common themes of the committee’s inaugural discussion were documenting the life cycle of consumer debt, technological solutions and making sure the DFPI understands those processes, according to California DFPI Senior Deputy Commissioner and the debt collections advisory committee program lead, Suzanne Martindale. Discussion also prioritized consumer communication best practices, licensing requirements, and how research can help support the DFPI’s mission

“Introducing tech and consumer focus into the debt collection process is a lot more than sending an email and hoping for the best. It’s bringing in the best practices from e-commerce combined with consumer research,” Samet remarked. “Consumers want to pay their debt when they’re able to do so and when it’s done in a way that’s convenient for them. We’ve seen a spike in online activity from consumers actively looking for ways to negotiate or learn more about their debt – which on one hand is encouraging and on the other hand is critical to understanding how we offer a path for these consumers to engage in a way that they feel is good for them.”

Though the goal of this first meeting was to develop next steps and action items for future sessions, members agreed that DFPI research on consumer communications and preferences would be helpful to shape how the consumer advocates and debt collectors can work together. On this front, Samet will contribute insights garnered throughTrueAccord’s current business practices and core values.

“Consumers feel at a disadvantage on the phone because they are not as equipped with negotiation skills or knowledge of the law as the collector on the other side. They want to default to digital, asynchronous communications so they can think between the beats of back and forth,” said Samet. “All of TrueAccord’s activity has been heavily slanted towards allowing consumers to engage on their own terms as much as possible. When you bring e-commerce and tech practices to debt collections, it leads to more productive conversations, more proactive communications, more expectation for choice in mode of interaction and more requests for customization.”

The formation of the debt collection advisory committee was announced in April in order to provide critical feedback to the DFPI as it stands up its debt collection licensing program at the beginning of 2022.

To watch the entire first meeting of the debt collection advisory committee of the California DFPI, click here.