If you’re reading this article, then there is a good chance your company is already working with one debt collection agency or more. Furthermore, you already know which contractors excel in specific areas and which ones are simply treading water.
Selecting a new collection agency entails a thorough review of essential focus areas. The good news is that all of the criteria needed to make an informed decision is readily available. We made a list, checked it twice, and then augmented it with information provided by other authorities.
This first installment of a three-part series covers compliance, certification, data security and technology. Parts two and three will review qualitative and quantitative analysis, transparency, performance and evaluation.
This category is one of the first critical areas that should be considered in the realm of a modern debt collection agency. Rhetorically speaking, what good is an agency that recovers a respectable share of debt for its clients, but does so while using methodologies outside the law? The answer is “not very good at all” because reckless practices may result in complaints, litigation and negative publicity.
Best-in-class agencies are built on a foundation of relevant compliance with federal laws such as:
- Gramm Leach Bliley Act (GLBA) — controls the sharing of private information by banks and other financial institutions
- Health Insurance Portability and Accountability Act (HIPAA) — provides data privacy and security provisions for safeguarding medical information
- Fair Debt Collection Practices Act (FDCPA) — limits the behavior and actions of third-party debt collectors
- Fair Credit Reporting Act (FCRA) — promotes the accuracy, fairness and privacy of information given to consumer reporting agencies
- Telephone Consumer Protection Act (TCPA) — regulates telephone solicitations and the use of automated telephone equipment
Most states have regulations that mirror federal law, but others have more stringent laws in specific areas. For example, there are states with well-regimented auditing procedures as well as jurisdictions drilling down to deeper concerns regarding the delivery of the mini-Miranda.
Best-in-class debt collection agencies also have certified compliance officers, legal and quality assurance departments, compliance training programs for new employees, and refresher courses for seasoned collectors.
Compliance is generally maintained by quality assurance departments providing moral and legal compass to the efforts of the organization and its collectors. The QA team is led by the manager of corporate compliance who often work with other attorneys, QA supervisors and QA representatives.
It is extremely important to add debt collection agencies with reputable trade affiliations. An agency located in California, for example, should be a member of The Association of Credit and Collection Professionals (ACA International), the California Association of Collectors and the Better Business Bureau (preferably an agency with an A+ rating).
Prospective clients should also review other critical certifications such as Professional Practices Management System by ACA International. Currently, less than 2 percent of debt collection agencies in the United States hold this distinction because of the rigorous standards and auditing process.
Further client recommendations include reviewing all certificates of insurance, bonds, state licenses and two additional certifications: SOC I Type II audited financial reporting attests that agencies adhere to stringent data security standards while PCI DSS 3.2 certification provides the most up-to-date payment card industry security standards.
Other Security Measures
Best-in-class agencies conduct rigorous pre-employment background checks (in accordance with state and federal laws) and drug screenings to ensure the safety and privacy of data and sensitive information. Those agencies also utilize closed circuit 24-hour video surveillance, strict badge-only access to the building, and additional security clearance needed to access the call center. Finally, they maintain a clean desk policy (e.g. Bankers Online) in the call center where personal electronic devices are prohibited.
Finding the best debt collection agency also entails reviewing their technological offerings. Best-in-class debt collection agencies rely upon state-of-the-art tools to conduct everyday business.
Ability to Accept Online Payments
First, agencies need to offer convenient payment options such as online payment portals and include related links on all collection letters. They should also accept payments by mail and phone, and take multiple payment methods like cash, checks, credit and debit cards, and ACH while maintaining the proper procedures to secure, authorize, monitor and process transactions for access devices such as mobile phones.
Automated Dialer Programs
A best-in-class agency also use automated telephone dialing software such as power dialers and predictive dialers to optimize the collections process by pre-loading lists of numbers to reach more debtors in less time. Power dialers enable collectors to call lists of debtors without wasting time on numbers that are busy, dropped, disconnected or unanswered. Predictive dialers offer other advantages such as only connecting collectors to only live persons, automated messages to multiple debtors, interactive voice response (IVR) and compliance.
In order to be competitive, agencies use debt collection software packages that optimize business-rule automations by managing how and when to make effective, error-free and compliant contact with debtors per client requests and specifications. Options include real-time adjustments, customized reporting and statements, charts, testing, automated segmentation and client invoicing.
Disaster Recovery Plans for a Debt Collection Agency
Best-in-class agencies are also well served by implementing recovery plans to provide business continuity and protection in the event of a natural disaster. Considerations should include mobile trucks or portable command centers to ensure business activities continue without disruption or compromise, data security and backup computer systems, on-site generators and more.
Adding one or more debt collection agencies to an existing roster of vendors is not complicated, but it does demand a thorough study of several moving parts included in this article. We invite you to download our free guide about “How to Find the Best Debt Collection Agency.”