ciskey debra j

Quality assurance is a common practice in call centers and collection agencies. Even in the smallest of collection agencies, and even when call recording is not an affordable option, the proximity of the workspaces places natural limitations on the behavior of collectors. Often, the boss sits in the same room or in a nearby office, making direct observation a matter of course, and when a consumer gets to the boss’ line, behavior modeling also naturally occurs. If a call escalates, it can be handed off to a neighbor who provides a calming second voice, and the day goes on with no thought to document any incident, because this is just “how we do business”.

Not anymore! In its Bulletin 2013-06, “Responsible Business Conduct: Self-Policing, Self-Reporting, Remediation, and

Cooperation” the Consumer Financial Protection Bureau expressed its expectation for responsible conduct related to self-policing and self-reporting of incidents and occurrences of potential law violations. These expectations include: proactively self-police for potential violations, promptly self-report to the Bureau when potential violations are identified, quickly and completely remediate the harm resulting from violations, and affirmatively cooperate with any Bureau investigation above and beyond what is required. The benefit of doing so, according to the bulletin, is potential “favorabl[e] affect [of] the ultimate resolution of a Bureau enforcement investigation”. The CFPB’s purpose in providing the guidance is to create “substantial benefits for consumers” and to “contribute significantly to the success of the Bureau’s mission”.

This expectation reminds me of the tenet in the game of golf in which players are expected to self-report their deviations from the rules so that the proper penalties can be assessed when their score in any round or competition is calculated. Much controversy is generated by disagreement between players, officials, and fans about whether or not certain incidents rise to the level of a rule violation. In recent years, golf officials have accepted and investigated reports of rule violations provided by fans who closely scrutinize broadcast video of match play.

In our world, our rule book has consisted of the expectations provided by the FDCPA, the various interpretive court decisions that have required major changes in how we do business to avoid having to defend against similar allegations, and rules issued by state governing bodies and state legislatures (just like the “local rules” acknowledged by the PGA rule book). The CFPB has started the process of determining where to begin with its own rulemaking for the debt collection industry with the publication of its Advanced Notice of Public Rulemaking on November 5, 2013. With the launch of the debt collection section of the complaint portal in July, 2013, it is also accepting and scrutinizing reports of potential violations by debt collectors from consumers, just like the officials in the PGA. I don’t want to say that collecting debt is just like a game of golf, and in fact, I have been known for loudly criticizing those who use sports analogies to make points about business, but the similarities here are just too obvious to ignore!

The CFPB has made it clear that it feels that self-policing and self-reporting are integral to the successful implementation of its mission, “but so too are vigorous, consistent enforcement of the law and the imposition of appropriate sanctions where the law has been violated.” Everyone would agree that intentional and egregious law violations should be sanctioned. That helps everyone. We will have to hope that the enforcement personnel who receive and evaluate our descriptions of incidents which may have resulted or had the potential to result in consumer harm will also take into consideration the fact that we all employ human beings who by the nature of their existence are not perfect, and also the fact that despite all possible and necessary controls, sometimes things just go wrong.

The CFPB has provided insight into the tests it will use to determine the efficacy of the self-policing practices employed by organizations under its jurisdiction. It will look at the nature of the violation, how it was detected, whether or not controls were in place to have prevented it, and whether there was a culture of compliance at the top most echelons of the organization which would have mandated prevention and self-detection of any violation. It also provides tests related to the effectiveness of the self-reporting of incidents and remediation related to self-discovered misconduct and violations. The bulletin ends with a description of the level of cooperation the Bureau expects when enforcement actions and investigations are initiated.

Bulletin 2013-06 is available at consumerfinance.gov. I suggest you obtain a copy and consider how its requirements can be folded into your compliance management system. The bulletin does not provide a process for self-reporting, however, we can likely expect to be provided with this process when the CFPB rules are finalized. In the meantime, we have the opportunity now to develop the golfer’s mindset in our own offices, and to figure out how to be our own best watchdog.

 

Debra Ciskey is the Director of Compliance at Afni, Inc. She is a member of the board of directors and a certified instructor for ACA International.