Remember the days of collecting money first, the days when compliance was an afterthought? Things sure have changed over the last 40 years due to the FDCPA to the last five years of the CFPB. Now every word spoken or written is critiqued by clients, regulators and plaintiff attorneys. Most collection laws and rules are ambiguous and can be left to interpretation which enables attorneys to send mass TCPA and FDCPA demands or file lawsuits with the hopes of no resistance. I guess I can’t blame them so long as our courts are allowing this. Why not pick the low hanging fruit? Unfortunately, many courts are split on what practices are legal, unfair and deceptive leaving much uncertainty within the credit and collection industry.
Regulators, courts and most politicians don’t care about what’s unfair to businesses because it’s all about consumer protection. Industry practices such as blitzes and closeout are becoming a thing of the past because collectors shouldn’t press harder due to the time of day or month. There’s really no such thing as a least sophisticated consumer with today’s technology, internet, social media, attorney billboards, TV and radio commercials. Collectors are at a disadvantage and must be aware of their every move. Collectors have been given a bad stigma for years and while there are bad actors, most licensed and insured agencies are ultraconservative and provide a professional, respectful service to consumers and clients while playing a major role in our economy.
Five years ago creditors and agencies had to create compliance departments ultimately affecting their bottom line. Some ended up going out of business because they couldn’t sustain additional overhead. Those who were able to survive reaped the benefit of less competition and a pool of collectors needing employment. Even some collectors were not able to transition to the new way of collecting and had to find a new line of work. Most incentive plans are no longer based on how much is collected but also how the money was collected.
As the years have passed creditors have heightened their oversight in order to mitigate risk and protect their brand. Regular call calibrations as well as monthly, quarterly and annual audits have become the standard. Even client scorecards have incorporated compliance to ensure they are monitoring how agencies are collecting. An agency’s performance can be affected if it takes too much of a conservative approach. While you can never let the tail (compliance) wag the dog (operations) both are essential in today’s environment. Most agencies constantly struggle to balance compliance with their operational goals.
In order to ensure collectors are compliant you must develop them into what you expect. This includes side-by-side monitoring, call listening sessions, random call monitoring and classroom training. Scheduling training can be difficult for compliance departments because operations has goals to achieve and most of the aforementioned training requires the collector to be off the phone.
Compliance departments must work with operations and schedule certain times throughout the month where training can take place. This dynamic is crucial for your company to be successful and it takes the leaders of your organization to make it work. I deem compliance violations as one of two things, ignorance or intentional. If the violation was due to ignorance, meaning the collector didn’t know their actions were a violation, the collector can be coached on how to properly do their job compliantly. If the violation was an intentional act, you may have to make a decision as to whether the employee is the right fit for your organization.
As a compliance officer I seek first to understand and then to be understood. Why are changes being made? How are they benefiting our organization? Once I understand everything in its entirety, I seek to be understood and ensure the consequences don’t outweigh the benefits. Anyone can come in and tell you what you can’t do. It takes a true leader in the field of compliance to come in and tell you what you can’t do while overshadowing that with everything you can do. If you take a tool out of one’s toolbox, replace it with another. As we all know, compliance is here to stay and so long as we embrace change we can successfully build the lives of employees and consumers by turning difficult circumstances into positive experiences.
Sam Eidson is the Director of Compliance for Delta Outsource Group, Inc. He also serves on the Board of Directors for the Missouri Collectors Association.