Having “the right feet on the street” is critical to any venture, but especially when it involves launching a tax season collection strategy. In this case, the feet translate to having a qualified collection agency design and implement a plan for the upcoming tax season.
Ideally, agencies will launch a strategy in time for the beginning of tax season. The official start of tax season is the date the IRS begins processing electronic tax returns. For the 2019 tax year, the bureau will start accepting electronic returns at the end of January 2020. It will continue doing so until April 15, 2020. Individuals and businesses may file after April 15, but they will pay penalties and interest charges beyond the deadline.
Best-in-class agencies understand the current economic climate. They also acknowledge the fact that many consumers plan to pay down debt using their tax refunds. Both are key components of any tax season collection strategy.
Agencies apply these factors to their existing framework of experience in financial services, compliance, collections technology, certification, and data security. The goal is to provide clients with a favorable ROI, brand protection, and customer retention during tax season and beyond.
Agencies developing successful tax season collection strategies are generally led by experienced management teams. Members have a deep understanding of collection operations, compliance, data security, industry and consumer trends.
Individuals overseeing operations are responsible for maintaining effective day-to-day call center functions relating to employee supervision, strategies, technologies, reporting and more. They also mandate daily scrubs to verify the status and background of each consumer account.
Furthermore, the heads of operations generate a variety of reports such as the report of accounts and balances received, standard summary report, and monthly status report. These reports are submitted to clients, management and other stakeholders on a timely basis.
Experience is also needed on the representative level where compliant negotiations can result in the establishment of repayment plans.
Best-in-class collection agencies are compliant with all relevant state laws as well as key federal regulations relating to consumer debt collections. The laws are intended to prohibit invasive and aggressive collection methods and protect consumer data. These include the Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Health Insurance Portability and Accountability Act (HIPAA).
Agency operations leaders rely on strategic predictive analytics to generate cost-benefit analysis, simulations, and advanced scoring models to compare segmentations affecting individual accounts. Predictive models can forecast the likelihood of future consumer action such as making good on past-due notices, attrition or churn.
Receivables management suites are often augmented with contact management systems (CMS) that contain features for compliance, traceability, transparency and reporting that can help simplify management.
The operations team may also use automated telephone dialing software such as power dialers and predictive dialers to optimize efforts by pre-loading lists of numbers to reach more consumers in less time.
Agencies also maintain proper certifications to underscore the foundation of a successful tax season collection strategy:
- SOC I Type II audited financial reports pertaining to data security standards.
- SOC 2 Type II reports focusing on the effectiveness of non-financial reporting controls relating to security, availability, processing integrity, confidentiality, and privacy of a system.
- PCI DSS 3.2 – Payment Card Industry Data Security Standard certification.
- PPMS – Professional Practices Management System by ACA International.
Many of the certifications mentioned above pertain to data security. Other security measures include background checks and drug screenings, 24-hour video surveillance, badge-only access, and clean desk policies.
The Key Components of a Tax Season Collection Strategy
Tax season is the most important time of year at agencies because effective strategies can recover a significant amount of debt when consumers have the ability and willingness to pay. The approach involves:
- Strategies that consider compliance, consumer trends, local and national economic conditions, and consumer satisfaction surveys.
- Collector training at the close of the previous year and during tax season.
- Consumer outreach and incentivizing consumer repayments.
- Real-time adjustments to segments or individual accounts with the help of strategic predictive analytics.
- The ability to handle increased call center volume during tax season.
Ask Optio Solutions for Help
Optio Solutions maintains the finest data security, certification and collections technology. It is fully compliant with all laws related to the credit and collections industry, and monitors individual and team performances. The company is one of only 50 agencies worldwide to have garnered and maintained PPMS certification from ACA International.
Furthermore, the members of the executive team have 30 years of experience in collections on average.
Finally, clients receive a variety of standard and customized reports per their desired specs and schedules. More importantly, they also benefit from a favorable return on investment, brand protection and customer retention.
Download our free guide to learn how an individualized tax season debt collection strategy can help your organization.