Chances are right now someone within your organization is evaluating or strategizing how to remain compliant with federal and state regulations while still performing at a high level and being profitable. Most affected when it comes to compliance are the collectors that must overcome the sometimes burdensome regulations and ultimately execute the developed strategy while providing the desired results. This article discusses some common front-line compliance issues faced by collectors during the collection process and suggestions on how to deal with them.
Consumer Identification
The first thing a collector is required to do on a collection call when speaking with an individual is confirm the identity of the consumer. This has become increasingly difficult for collectors. Of course it is essential for a collector to confirm they are communicating with the consumer of record and the appropriate steps are taken to confirm. A concern is what those appropriate steps should be. Confirming the consumer’s first and last name should be a must, then another point of verification such as the last four digits of the consumer’s social security number, date of birth, or address on file could be used. Furthermore, there is an additional concern of how this process of identification should be verified. Should the collector provide the information and the consumer confirm it or should the collector request the information from the consumer and then the consumer provides it? While this is a necessary and reasonable process, consumers concerned about identity theft and fraud are becoming increasingly less likely to provide or confirm this information which ultimately ends that collection call attempt due to the collector being unable to confirm the consumer’s identity.
A solution would be to create an Identification of Consumer policy that outlines the company’s requirements and then manage to it. The policy could provide collectors with detailed steps about which information may be used in the confirmation process and whether or not the collector may provide the information for the consumer to confirm or vice versa.
Disclosures
Once the consumer has confirmed their identity and the collector is comfortable they are speaking with the consumer of record, disclosures must be communicated to the consumer. Disclosures vary based on federal and state requirements in addition to company policy, with the two most common disclosures being the mini-Miranda and call recording. The main issue here is the length of time the disclosures take to say and then ensuring the disclosures are stated verbatim. The amount of time taken to identify the consumer properly and then communicate the disclosures is more time the collector is not talking about the resolution of the debt and thus provides the consumer with more opportunity to terminate the call early.
While disclosures are frustrating for collectors, they must understand they are required and there are no short cuts around them. A call opening script could be developed to assist the collector with the most efficient way to identify the consumer and provide the disclosures without losing the attention of the consumer. We only get one chance to make a first impression.
Full and Complete Information
If a collector is fortunate enough to have the consumer confirm their identity, provide the required disclosures, and proceed with the collection call then at some point an attempt to obtain full and complete information from the consumer will be made. Full and complete information includes but is not limited to the consumer’s employment, correct mailing address, and alternate contact phone numbers. Consumers are also reluctant to provide this information due to privacy, ID theft, or fraud concerns which create another issue for collectors as they progress in their conversation with the consumer.
Collectors should request full and complete information based on the company’s policies and procedures and remain in compliance with federal and state regulations. It is important collectors understand a consumer’s reservation to provide this detailed information and be empathetic to the concern. Simply because a consumer refuses to provide full and complete information doesn’t indicate they will not resolve their debt. Therefore if the consumer refuses this information the collector should respect the consumer’s decision and continue to progress the collection call in an attempt to resolve the debt. Lack of Continual Training Do this, do that, don’t do this, don’t do that. In the fluid legal environment the debt collection industry is in, the previous sentence could sum up what collectors hear these days. In order for collectors to avoid this confusion they need not only to be informed but also trained and coached on how to collect in accordance with company expectations. It is very easy for management to tell a collector what they can’t do, but it’s much more productive for management to tell collectors what it is they can do. One rule of thumb when it comes to compliance would be for every one thing you tell a collector they can’t do, give them two things that they can. Training should be consistent and continual for all collectors regardless of tenure.
Company vs. Client Requirements
Each company most likely has its own requirements relating to compliance and collection processes. At the same time, clients will also most likely have them as well. Chances are good the companies and clients requirements are not the same. While the basis of these requirements may be similar, there could be distinct differences as well. If a company segregates each client with dedicated collection teams, adopting specific client requirements in with company requirements is much easier. However, if a company combines multiple clients with multiple teams, then the varying requirements from clients could pose a significant risk to remain in compliance with each of the different clients.
With many companies doing more with less these days, there is a good likelihood of multiple clients being worked together. Developing a “most stringent” policy in regards to requirements could reduce the risk of compliance violations. “Most stringent” refers to reviewing each client’s requirements and when it comes to certain aspects of policies or procedures, adopt the most restrictive one and build from there.
Whether it is your compliance, quality assurance, or operational department who is developing strategies and lessons on dealing with compliance, always bear in mind it is the front line collectors who are affected most. Take the time to discuss with your collectors what issues are affecting them and allow them to be a part of the process. The better you understand their issues, the better you will be able to resolve them.
Nick Jarman is COO at Delta Outsource Group, Inc. He also serves on the Board of Directors for ACA International.