It’s 5:00 AM, Tuesday and the operations manager of a small credit union is clutching her mug of coffee while reviewing Google News. Much to her chagrin, a headline with her company’s name is among those in the local news section: “Acme Credit Union Sued for $30 M Over Debt Collection Mistakes.”
Assessing potential vulnerabilities, she quickly determines that the problem was not created internally, but rather, by the debt collection agency she hired on contingency. Later that day, she will discover that the agency was not committed to a consumer-centric approach of maintaining customer satisfaction.
Unfortunately, she is now in damage-control mode instead of being the pro-active leader that has defined her career. Her plans for the remainder of the week are on hold because she will spend most of it trying to right the wrong and abate further tarnishing of her company’s sterling reputation. Whatever funds the agency has recovered to date for her credit union, plus those that may be collected in the future, are overshadowed by the specter of a crippling court ordered settlement.
Scenarios like these are especially troubling because they undermine the very reason companies contract outside help for debt collections — to save operating expenses and produce a better return on investment than might be obtained via inside sources.
This breach in brand protection is the first of five reasons why clients fire their debt collection agency:
- Brand Protection – Failure to protect the brand
- Compliance – Failure to comply with government regulations
- Security – Failure to protect data
- Technology – Failure to maintain the latest technology
- Results – Failure to produce results
2. Compliance
It is imperative that debt collection agencies strictly comply with all federal and state regulations pertaining to their industry. Failure to do so could result in consumers delaying payments and initiating lawsuits as well as other legal action and brand damage.
The core of modern debt collection compliance is represented by the Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA) and Fair Credit Reporting Act (FCRA).
For example, the FDCPA states that agencies must refrain from the following practices:
- Harassment or shaming
- Misrepresentations
- Profanity or abusive language
- Threat of harm to consumers or their reputation
- Callbacks after consumer hang ups
- Email or fax messages without prior authorization
- Text messages
3. Security
Breaches in security present challenges to nearly every level of business where individual identity data is stored. Thus, protecting consumer records and data is a necessity for the modern debt collection agency. Consumer data in need of protection includes:
- Bank and credit card account numbers
- Social Security numbers
- Driver’s license numbers
- Medical and insurance records
Responsible providers use the most advanced data security in the industry to prevent loss, including Payment Card Industry Data Security Standard PCI DSS 3.1 (PCI DSS 3.1), compliance with SSAE 16 SOC I Type II, 24-hour CCTV security, strict badge-only access, employee background checks and drug screenings.
4. Technology
Debt collection agencies unable or unwilling to invest in the latest technologies are missing great opportunities to serve clients and maximize efforts.
5. Results
Debt collection agencies must “go big or go home” as they fulfill first- or third-party activities for clients. Uncollected debt, like fresh produce, has a limited shelf life that is difficult to recover once the window of opportunity has passed. In addition, any “failure to launch” represents considerable lost revenue for clients, not to mention the loss of sleep for the company’s executive officers.
Successful agencies thrive at the other end of the spectrum, delivering consistent and measurable results to a range of industries. Their management teams offer experience in operations, contingency based collections, first- and third-party portfolios, letter strategies, and the latest in call-center methodology. “Keeping it real,” legal teams should stay one step ahead of all collection rules and regulations with emphasis on consumer protection and privacy.
Clients are entitled to favorable collection results stemming from a fair return on investment in conjunction with the consumer retention that leads to lifelong relationships; they should never have to settle for an agency that does not deliver. Contact Optio Solutions today to learn how it can deliver on a promise to help your organization.
