The CFPB's proposed rulemaking has sent shockwaves through the accounts receivable industry. Speakers of the upcoming CollectTECH19 conference provided their take as to what they think this means for professionals around the country.
Ron L. Brown MCE, IFCCE, MPRS, CCCO, CARS, CFA
Owner
ConSec Investigations, Inc.
Now that the CFPB has proposed new rules to govern how third-party debt collectors contact borrowers, it is my opinion that the rules will accelerate the industry’s switch from insistent phone calls to emails and texts.
It appears that under the new rules, our collectors would only be able to call a consumer seven times a week — currently they can call as often as they want but we seldom call seven times in a work week. The major impact that I envision will be that once our collector reaches a consumer by phone, they will not be able to contact that consumer for at least a week. What if the consumer requested information? We will not be able to provide that information via telephone for a week.
The advantage to the new rule is that the CFPB is proposing no cap on the number of texts or emails a collector could send. This rule has become quite a controversial issue as it will open the door which will allow debt collectors to use various text messaging apps to include but not be limited to direct text, Facebook Messenger as well as many other textbased messaging services.
Consumers will not have to agree to text or email communications, however, the rules will provide the consumers an opt-out from collectors’ texts and emails. It is my opinion these changes are a long time coming and will update the laws to address today’s communication methods. The changes the CFPB has proposed are a reflection of how we communicate in today’s techno-world. Texting and email is without a doubt the way we communicate today.
Collection agencies that have for many years relied on telephonic contact with consumers will have to change their business model. It’s going to create a major change in the collection industry and auto dialers may go the way of the slide rule.
John H. Bedard, Jr.
Managing Attorney
Bedard Law Group, P.C.
The doors may soon be open for the credit and collection industries to communicate with consumers in ways most convenient to and desired by consumers. The CFPB’s proposed rule paves the way for the creation of ground rules focused on communicating with consumers via text message and email. This is the first step along a long road toward serving consumers in ways that meet the needs of a 21st Century economy.
Gordon C. Beck III
President and COO
Valor Intelligent Processing
The new CFPB rules will bloom many opportunities for the industry, but none more than modernizing the way we communicate with consumers, specifically the practice of texting and emailing. We will start to see an abundance of options on platforms such as our very own CMS systems that will act not only as a CMS, but will utilize strategic analytics to automate communications such as text messaging and emails as a viable replacement to expensive alternatives. The future of tech in the ARM industry will have no boundaries.
Chris Dunkum
President
First Collection Services
The new CFPB ruling could open up responsible use of texting and emailing between receivable management firms and consumers. These tools would allow us to communicate with consumers in a way that is easier, more convenient, and faster for them. Our clients would also be able to securely answer questions that we forward to them from consumers much faster. Speeding up the flow of this information might improve overall results and reduce complaints commonly made against our industry. It isn’t a far stretch to imagine a consumer’s dispute being answered in hours instead of weeks. Proper implementation of these new CFPB rules is key to the success for everyone. It is going to be more important than ever for industry leaders and regulators to make sure safeguards are put into place to protect the flow of this information. Technology and data providers working with us to provide proper consent management and data tracking will have many benefits beyond the obvious things we think about today. I truly believe this could be a new beginning for our industry.
Leslie Bender CIPP/US, CCCO, CCCA, IFCCE
Chief Strategy Officer and General Counsel
BCA Financial Services
It is commendable that the CFPB has crafted some clear guidelines for communicating with consumers per consumers’ preferences. This creates a wonderful opportunity for industry and consumer groups to study the proposal and find common ground for meeting consumers’ communication expectations. Subject to guardrails for respecting consumers’ privacy and avoiding third party disclosures, the strategies outlined in the NPRM for modernizing communications in debt collection are a terrific start.
Jon Balon
VP of Product Development
Williams and Fudge, Inc.
It’s a great start by defining a framework to use when communicating using these technologies. The ruling also helps in paving the way for future communications using mediums that many people use in their day-to-day lives. Imagine the day where we can communicate with people using the communication medium they want, versus the one they are being forced to use. This ruling will help us in giving account holders what they want.
Mike Frost
Partner
Malone Frost Martin PLLC
It is clear in the new proposed rules from the CFPB that the regulator fully understands that consumers prefer communication options and there is not a one size fits all method to communicate with consumers. That said, the rules have shaped some recommendations, provided safe harbors and created some restrictions. Those within the industry that utilize omni-channel routes to communication with consumers will need to implement policies, procedures and compliance controls. All of which are feasible and provide significant opportunity for the ARM industry to reach consumers, especially millennials and Generation Zs.
Rick Perr
Partner
Fineman Krekstein & Harris, P.C.
The express inclusion of communication via text and email in the CFPB’s Notice of Proposed Rulemaking is a welcome development by the ARM Industry. Written in 1977, the FDCPA was not designed with modern technology in mind. Instead, it has been left to a myriad of courts to fit a round peg into a square hole when it comes to interpreting the use of advanced communication techniques in conjunction with the proscriptions of the FDCPA. There will surely be guidelines on its usage, but the mere recognition that consumers should be able to be communicated with in the medium they desire is a big win for technology and efficiency.
Debra J. Ciskey
Executive Vice President
The Collections Coach, LLC
The proposed Debt Collection Practices rule will help debt collectors communicate with consumers in their preferred communication mode. The interaction of multiple statutes, including the TCPA and ESIGN Act, will complicate the process, and these can be overcome. Specific and systematically enforced policies and procedures will be necessary to prevent errors and overcommunication. In the long run, consumer satisfaction with communications will increase, and documentation related to the receipt of messages will be a valuable benefit to the industry.