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Beyond Integration: How to Compete to Win in the ARM Market

Beyond Integration: How to Compete to Win in the ARM Market

This is the final post in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.

 

With its dense maze of business, legal, and market challenges, the ARM industry is a tough one to navigate. Pitfalls, risks, and hidden opportunities abound. It’s hard to see a clear path forward, let alone pursue bold growth strategies.

 

Nevertheless, you can’t afford to sit still. Your survival depends on it. You must become faster, leaner, and stronger to outmaneuver your competitors. You know technology is key, and you continue to invest accordingly.

 

Yet your business struggles persist, and still, no evolutionary leap. If anything, “innovation” seems to be holding you back.

 

We’ve written about the classic ARM integration model and its practical implications for businesses. For each new point solution added to the tech stack, a custom interface must be created. With every required fix or update, disparate technologies must be realigned. It’s an unwieldy, gap-ridden arrangement that keeps IT personnel and collection agents from contributing more valuably.

 

Meanwhile, as IT burdens and costs eat away at the bottom line, leadership teams hold out hope for elusive gains in operational efficiency, compliance management, and revenue recovery.

 

This is no way to compete in the ARM market.

 

If you want to compete to win, you need an entirely different approach to innovation—one that drastically simplifies collections and drives business results naturally.

 

How an ARM Ecosystem Enables Consumer- and Compliance-Friendly Collections

In an ARM ecosystem, all parts are designed from their inception to work together seamlessly. They’re governed by the same brain, and they operate from a single shared database and interface. Every part of the ecosystem responds to any change or event, no matter where in the system it occurs. A built-in software development toolkit allows businesses to add fields, workflows, and other customizations as needed without disrupting or disabling the ecosystem environment.

As accounts are automatically guided through the collection process, the ecosystem accounts for and helps enforce business and compliance rules governing both consumer communications and account records. Without the data and functionality gaps inherent in the classic bolt-on integration model, there’s less room for human error. Collection teams have the real-time visibility they need to manage and prioritize accounts with ease.

 

Think of an ARM ecosystem as a brand new car, straight from the manufacturer. All system components are designed to operate in sync. When a hands-free call comes in, the radio volume drops and the climate control system automatically adjusts itself. This allows the driver to do his or her job with less effort, greater control, and enhanced safety. When maintenance and upgrades are needed, the dealer can easily complete those tasks to ensure peak operating efficiency and performance.

 

 

5 Ways the ARM Ecosystem Can Help You Compete to Win

Introducing an ARM ecosystem will change the way you operate. It could just as easily change the trajectory of your business. Here are five major advantages you stand to gain.

 

Simplicity

A unified, single-vendor, easily maintained ARM ecosystem will free your IT personnel to devote more of their time to high-value initiatives. It will also mean less effort for your collectors, who would otherwise need to switch between platforms and reconcile data sets. In addition, your team will be able to access and leverage data and analytics with incredible ease and speed.

Control
Real-time insight and oversight will allow you to identify and redirect focus to more profitable accounts and make informed business decisions. With a better handle on your operation, you’ll be well positioned to maximize efficiency and boost your agents’ productivity and collection results.

 

Freedom
The ecosystem’s embedded compliance module will act as a protective shield for your business, making it tough for agents to communicate in noncompliant ways. As your compliance fears fade, you’ll be free to continue innovating, expanding options for consumers, and making the debt recovery process even more profitable.

 

Power
Business rules respond in real time to account activity across the ecosystem. As your business becomes leaner, nimbler, more flexible, and more effective, you can act quickly in pursuit of your business objectives and adapt easily as market conditions change.

 

Dominance
An ARM ecosystem drives major changes: improved recovery rates, lower operating costs, and easier, more effective compliance management. Better business results will strengthen your top and bottom line, make you more valuable to your clients, and position you to compete at a higher level.

 

With a Simpler Tech Model, You’ll Have What It Takes to Win

For decades, we’ve partnered with ARM businesses to help them overcome barriers to their success. We’ve seen how the classic ARM integration model can work against long-term business goals. We designed the ARM ecosystem to be a simpler, more powerful approach to innovation and an industry-leading solution that can supercharge the collection cycle.

 

If you’d like to learn more about the ARM ecosystem—how it transforms collections and the value it can unlock for your agency—you can find it all in our complimentary eBook “The ARM Ecosystem: Advancing Beyond Integration.” Download your free copy today.

 

Don’t miss the other posts in our ARM Ecosystem series:

 

For more insights and tips you can use to accelerate your success in the ARM market, subscribe to the OS blog. We’ll deliver high-value content straight to your inbox.

 

Boost collections. Lower costs. Close compliance gaps.

Your approach to innovation may be hindering your success. Download “The ARM Ecosystem: Advancing Beyond Integration” and learn what a holistic, seamless collections operation can do for you.

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2020 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

Data Privacy and Security: What’s Next for Debt Collectors?

Data Privacy and Security: What’s Next for Debt Collectors?

Data privacy and data security are two very hot topics in the ARM industry today. The California Consumer Privacy Act (CCPA) is set to take effect in January 2020, with additional privacy bills now pending in at least 25 states. Meanwhile, cyber crimes involving...

Collection Policies and Procedures: 4 Tips for Managing Risk on the Front Line

Collection Policies and Procedures: 4 Tips for Managing Risk on the Front Line

In the accounts receivable management (ARM) industry, policies and procedures aren’t just helpful to have. They’re critical protection for collection agencies, whose compliance risks are myriad and ever changing. Policies and procedures are of little use, however, if they’re inadequate, outdated, or not consistently followed.
 
When policies and procedures aren’t serving their purpose, ARM companies face all sorts of potential blowback. In addition to loss of business, worst-case scenarios can include regulatory fines, CFPB audits, civil investigation demands, and litigation.
 
As an ARM business leader, how can you ensure your policies and procedures are effective and your collectors are following them to the letter?
 
In a recent group discussion hosted by Mike Gibb at AccountsRecovery.net, I joined two of my industry peers—Alicia McKeighan, Chief Compliance Officer at Afni; and Paige Tortorich, Internal Audit Manager at ERC—to tackle this question in some detail (you can access the webinar here). Below, I’ve highlighted four major areas we believe collection agencies should focus on in their efforts to manage compliance risk day to day.
 
 
 

1. Prioritize Monitoring, Reviews, and Updates

A culture of compliance, where all stakeholders are on board and on the same page, is essential for mitigating compliance risk. Senior leadership, compliance officers, operations leaders, and collection agents all bear responsibility for developing, fine-tuning, and executing policies and procedures consistently and effectively.
 
To build a culture of compliance, you must establish processes and schedules for measuring and improving your policies and procedures—both their effectiveness (how well they’re working on the front line) and their relevance (whether they align with current laws and regulations). For smaller agencies with limited resources, it may be worth bringing in a third party to help with monitoring and auditing rules.
 
Policies, which should clearly outline what’s acceptable and what isn’t, should be reviewed annually. Changes should happen only as a result of changes in the law or newly identified litigation risks, and then only after a thoughtful review and risk analysis.
 
Procedures, or the steps employees must take to comply with existing policies, are more fluid. They can be changed as needed to improve their effectiveness or when new technologies or other initiatives alter workflows. Agents should be encouraged to weigh in with suggestions, so they stay engaged and understand the important role they play in managing compliance. When feedback can’t be acted on (as agents don’t always have the full context for a given procedure), agents should always understand the reason(s) why.
 
Ground Level: Compliance Gap Assessments
Compliance gap assessments are designed to ensure compliance with policies and procedures on the front line and throughout the organization. Payment processing, reporting structure, organization, compliance management, and other aspects of your operation should be audited regularly—by someone not in operations, per the CFPB—with the frequency of audits determined by the degree of risk posed by noncompliance.
 
From 30,000 Feet: Annual Risk Assessments
Annual risk assessments should include a detailed review of existing policies and procedures to determine whether any need updating to better fit the current legal landscape. An annual risk assessment might also point to the need for training updates, additional controls, or additional auditing and/or monitoring.
 
Who should be responsible for writing/revising policies and procedures?
Stakeholders across the organization, including but not limited to the chief compliance officer, should be involved in the process of writing and revising policies and procedures.
 
If your operations managers are too busy to update policies and procedures, you could:
 
  • Enlist a dedicated document specialist.
  • Have a mediation auditor meet with managers to write procedural changes and get approvals on the spot.
  • Use fill-in-the-blank templates.
Any of these approaches would streamline the process and allow managers to focus more on managing agents’ performance.
 
What if you’ve let assessments slide, or you’ve never had a formal program in place?
If you’re not conducting compliance gap assessments on a regular basis, now is the time to get back on track. Create a schedule and hold yourself accountable. Start by auditing your top three highest-risk items, fine-tune that process, add additional audits and monitoring controls every 6-12 months, and continue building out the program from there.
 
You’ll also want to review your procedures for accuracy. Make sure everyone can easily access them—ideally, in electronic form (see tip #2). Conduct refresher training with your agents and/or members of other departments, and ask questions to test their knowledge.
 
Exception reporting is critical to managing compliance. You need to be sure your controls are in place and working properly. An exception report might be triggered when:
 
  • An agent took a call, but no notes are listed.
  • An agent took a payment but didn’t get a correct address.
  • An agent added a credit card or Social Security number to the notes.
When a procedural violation occurs and correction is needed, operations should be notified right away (automatic notifications are preferable; see tip #4). It’s important to determine whether any trending issues relate to flawed procedures or the need for refresher or updated training.
 
 
 

2. Make Policies and Procedures Easily Accessible

For many people, the words “policy” and “procedure” bring to mind dusty manuals sitting on a shelf. But reliance on paper isn’t just old-fashioned; it leaves businesses vulnerable. Outdated and/or multiple document versions floating around the office, coupled with inadequate oversight and control, sows confusion and heightens risk.
 
More and more ARM businesses are moving toward centralized cloud storage platforms such as SharePoint to ensure internal documents are valid, secure, and easy to use, all of which are key to making sure policies and procedures are appropriate and effective. SharePoint offers version controls, prevents unauthorized changes, and allows employees instant access.
 
Once policies and procedures are reviewed and approved by compliance, they can be uploaded to SharePoint for all employees to view and search by keyword. Changes can be made from across the organization, and compliance is notified in real time so they can review the changes right away. All changes are documented for easy reference.
 
To train your team on SharePoint, check out LinkedIn Learning (formerly Lynda.com), which offers outstanding SharePoint tutorials.
 
 
 

3. Have a Formal System in Place for Reporting and Addressing Issues

In an ideal collections environment, nonconformities can be reported through multiple channels—directly to management, directly to compliance, or even through an anonymous voice portal. If you give employees multiple options, you’ll have more opportunities to research and respond to problems as they occur and to better protect your business.
 
If the issue being reported is a one-off occurrence requiring individual remediation, coaching and training should be specific and timely. It’s important to document your response; if the same individual makes the same error repeatedly, termination may be in order.
 
If the nonconformity is more widespread, you should make remediation via formal group training your top priority. Otherwise, you could see an avalanche of new infractions.
 
Remediation of compliance risk should be a closed-loop process that’s thoroughly documented and reported to your agency’s highest governing body. You can track all remediations by client and save audits and client Master Service Agreements (MSA) through SharePoint’s vendor management program.
 
Finally, you’ll need to evaluate corrective action on a regular basis. If an action isn’t getting results, make any necessary adjustments in accordance with current employment law.
 
 
 

4. Equip Your Team to Manage Compliance Effectively

Managing risk on the front line is easiest and most effective when it’s enabled by a robust, fully integrated compliance management system (CMS) with automated auditing and monitoring controls.
 
If you’re a smaller agency without a CMS in place, the CFPB website outlines everything the bureau might look for in your organization and what your CMS must include.
 
Here’s how tech-empowered ARM agencies manage risk with ease:
 
  • The board and director provide continual oversight, review assessment and risk review findings, and revisit policies and procedures on a regular basis.
  • Collectors receive timely feedback on their calls.
  • Operations leaders are instantly notified of exceptions related to call frequency limitations, allowable call times, calls made to cell phones without express consent, etc., with speech analytics helping to identify other types of nonconformities.
  • Complaint management and dispute tracking occur automatically.
  • IT teams are notified of systemic nonconformities and readily respond with any necessary changes.
When all these parts work together as a whole on a daily basis, fewer infractions go unnoticed. Potential problems are more easily prevented. A culture of compliance takes root, and a more compliant, efficient, profitable collections operation naturally results.

 

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2019 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

How Do Consumers View the CFPB's Proposed Rules?

Consumer advocates and the credit and collection industry are at opposing ends of the spectrum when assessing the CFPB’s proposed debt collection rule. But now, the industry can hear one of the leading consumer advocates share her perspectives.

In a recent webinar, hosted by AccountsRecovery.net, Margot Saunders, senior counsel at the National Consumer Law Center, and Rozanne Andersen, VP and chief compliance officer at Ontario Systems, discuss the CFPB’s proposed debt collection rule from opposite sides of the issue.

Beyond Integration: How to Compete to Win in the ARM Market

Beyond Integration: How to Compete to Win in the ARM Market

This is the final post in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.   With its dense maze of business, legal, and market challenges, the ARM industry is a tough one...

How to Maximize Your Account Reps’ Collection Efforts

How to Maximize Your Account Reps’ Collection Efforts

This is the third of four posts in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.   In the collections business, as in all industries, time is money. Time well spent is...

How to Maximize Your Account Reps’ Collection Efforts

How to Maximize Your Account Reps’ Collection Efforts

This is the third of four posts in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.

 

In the collections business, as in all industries, time is money. Time well spent is profitable; wasted time is a revenue drain. Inside many ARM companies, a great deal of time is inadvertently and needlessly wasted on the front line.

Many account reps simply aren’t equipped to work as efficiently and productively as they could. They can’t make informed decisions. They chase low-value accounts, spend too much time on a single account, or use the wrong channels. Team leaders can’t properly evaluate workflow processes or manage agents’ performance effectively, as the bulk of the data they have resides with various point solution vendors and isn’t tied to other solutions or the primary workflow.

In other words, it’s an activity-rich, data-poor operation—and a drag on the top and bottom line.

This scenario continues to play out in even the most high-tech environments. Best-of-breed point solutions, which are designed to make account reps more effective and more valuable in their roles, can’t compensate for the visibility gaps that keep collection teams in the dark and limit their performance.

In our previous post in the ARM ecosystem series, we explored three ways integration is failing ARM businesses. Today, we’re going to zero in on how the typical ARM tech stack fails the front line—and how you can empower your agents to recover more revenue.

 

Give Your Team What They Need Most: Insight and Control

If you’ve invested heavily in point solutions to streamline collections but you’re not seeing a big uptick in results, your problem isn’t necessarily functionality. It’s a lack of insight and oversight. Your team is forced to make do without the very things they need to perform at a high level—i.e., shared real-time data and a greater degree of control as accounts make their way through the collections cycle.

Now, imagine moving beyond integration to an ARM ecosystem—a holistic tech environment in which all tools are designed to fit and work together—and eliminating the visibility gaps that are hampering your agents and your organization.

With accurate, timely data and pre-defined workflows, your agents don’t have to guess where to focus their efforts. Ecosystem data helps team leaders identify high-priority accounts and determine who should be contacted, how, and when. Armed with this information, agents can maximize their time throughout the day.

Agents also enjoy the benefit of accessing account histories from a single application with one login, one window, and no need to jump between tabs, making collection efforts easier and more efficient.

Team leaders have visibility into account activity and rep performance, allowing them to manage the team in ways that drive meaningful, measurable improvements. Meanwhile, you can evaluate and manage workflow processes on an ongoing basis and fine-tune operations with minimal disruption.

 

TAME THE COMPLIANCE BEASTWITH EASE

 

With greater insight and control and the built-in safeguards an ARM ecosystem affords, your agents can communicate in consumer-friendly ways without triggering the usual compliance risks and worries.

 

 

An ARM Ecosystem Can Unleash Your Agents . . . and Your Ability to Compete

Operating from a shared database and interface, all ARM ecosystem collection tools work in symbiotic fashion like various parts of a living organism. Accounts are easy to track and manage as they progress through the system. Unlike the classic integration model, an ARM ecosystem gives account reps the information and tools they need to maximize their time, thus helping advance larger business goals.

You can read more about how the ARM ecosystem works and how it transforms collections in our complimentary eBook, “The ARM Ecosystem: Advancing Beyond Integration.” Download your free copy today.

 

Don’t miss the other posts in our ARM ecosystem series:

 

For more insights and tips you can use to accelerate your success in the ARM market, subscribe to the OS blog. We’ll deliver high-value content straight to your inbox.

 

Boost collections. Lower costs. Close compliance gaps.

Your approach to innovation may be hindering your success. Download “The ARM Ecosystem: Advancing Beyond Integration” and learn what a holistic, seamless collections operation can do for you.

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2020 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

What the CFPB Rules Mean to You: An Expert Panel Weighs In – Part 2

What the CFPB Rules Mean to You: An Expert Panel Weighs In – Part 2

If you missed Part 1 of “What the CFPB Rules Mean to You,” and you’re concerned about how the proposed rules might affect your operations, I recommend giving it a read. Based on a panel discussion I recently participated in (you can access the webinar here), Part 1 offers a detailed summary of the CFPB’s proposals as well as areas of concern related to call caps, electronic communications, and limited content messages.

This post covers the remainder of our discussion. Following a brief summary of validation notices/required disclosures, I’ll explain the changes and strategies you should consider pursuing long term and what you should be focused on right now.

 

Validation Notices/Required Disclosures

The CFPB’s proposed rules for validation notices and disclosures put some new twists on a number of well-established ARM industry standard operating procedures—and in some cases, with big implications for collection agencies and consumers.

 

Proposed Requirements

For validation notices, collectors will be required to specify the date the debt collector will consider the end date of the validation period. The proposed rule makes clear the validation period begins on the date the debt collector provides the validation information and ends 30 days after the consumer receives, or is assumed to receive, the validation information.

For purposes of determining the end of the validation period, the debt collector may assume that a consumer receives the validation information on any date that is at least five days (excluding legal public holidays, Saturdays, and Sundays) after the debt collector provides it.

Debt itemization must include the Itemization Date. The Itemization Date may be one of four dates for which a debt collector can ascertain the amount of the debt: the last statement date, the charge off date, the last payment date, or the transaction date.

The debt itemization must also include specific information amount the debt including but not limited to the collector’s name and mailing address; the consumer’s name and mailing address; the merchant brand, if the debt is a credit card debt; or if it is a consumer financial product or service debt, the name of the creditor to whom the debt was owed on the itemization date; the account number; name of the current creditor; and an itemization of the current amount of the debt in a tabular format reflecting interest, fees, payments, and credits.

Tear-offs at the bottom of validation notices should allow consumers to respond in a variety of ways such as disputing account ownership, requesting validation of the debt or the name of the original creditor, and submitting payments.

 

Lingering Concerns

With some validation notices sent electronically and others mailed to locations with less frequent mail delivery, counting 35 days past the date that notices are sent could lead agencies to inadvertently reach out to consumers before the validation period has ended and deny them a full 30 days to respond.

Debt itemization, particularly the inclusion of exact dates, could pose problems for medical debt collectors due to the insurance payer billing process that precedes provider collections. Inclusion of interests, fees, and costs creates additional difficulties for collectors as well; they would prefer not to mention these additional charges if they don’t apply—or, in a disclaimer, explicitly state that they don’t apply—and be granted safe harbor from frivolous lawsuits.

The CFPB’s proposed tear-off has both consumer groups and collection agencies particularly concerned.

  • Both camps agree that checking a box at the bottom of the form is inadequate, and consumer groups fear tear-offs could confuse consumers who might misunderstand their rights or the time they have to dispute a debt (or worse, get reported to a credit reporting agency before they even realize a debt is in arrears).
  • Designing a compliant tear-off form could be a struggle. With all the consumer response options the CFPB proposes including, there’s little room on the page for required state law disclosures. In some states, agencies are prohibited from placing these disclosures on the reverse side of the form.
  • Most agencies fear their document readers will miss statements handwritten by the consumer and potentially miss important instructions provided by the consumer.

 

“One thing I find interesting about [the CFPB’s] request for validation is they’ve tried to take some liberties with rewriting the validation notice and the mini-Miranda and as I read the FDCPA, there is no required language or specific words that must be used; rather, they are concepts which must be conveyed. [ . . . ] 

I think there are different ways of expressing the same thought that don’t sound like you’re being handcuffed and thrown into a squad car and brought down to the station.”

Michael Kraft, General Counsel, CCS Companies

 

 

Agency Imperatives That Could Complicate Operations

The proposed CFPB rules could have a tremendous impact on ARM businesses, regardless of how they communicate with consumers. Fundamental change may be needed, at least in some respects, to manage compliance day to day.

 

Record retention in the digital era

Under the CFPB’s proposed rules, ARM agencies will need to retain evidence of compliance with the new rules starting on the date the collector begins collection activity on a debt until: 1) three years after the date of the collector’s last communication or attempted communication; or 2) three years after the date the debt is settled, discharged or transferred to the debt owner or to another debt collector.

Retaining three years’ worth of call recordings, letters, text messages, chats, and social media communications—often stored by date and time—could impose a significant burden.

 

Creditor/agency data sharing

Data standards are going to become increasingly important going forward. To be able to effectively manage communication preferences and consents, validation requirements, and consumer and account data, agencies will need to align more closely with creditors than they have in the past. 

 

 

Big Takeaway for ARM Agencies: For Now, ‘Consent Is King’

The CFPB has attempted to interpret compliance with the FDCPA in ways that protect the most vulnerable consumers without unduly burdening or impeding collection agencies. While there are opportunities for greater clarity and refinement within the proposed rules, the experts on the panel are generally pleased with the CFPB’s efforts to balance stakeholder concerns.

The CFPB is also open to safe harbors in certain areas to protect agencies from consumers’ unfair legal claims. The CFPB has reinstated commission letters, for example, thus giving collection agencies the ability to seek the CFPB’s interpretation of FDCPA regulations (which has the force and effect of law unless a court overturns it).

With this new roadmap from the CFPB, agencies may be more open to communicating in ways they’ve avoided in the past. And that’s a good thing for both businesses and consumers.

As we await (and help shape) the final CFPB rules, agencies must look to the letter of the FDCPA, E-Sign, and TCPA. They must prioritize consent and revocation management above all, and make their voices heard before the CFPB and Congress. No need to wait for final rules before adopting electronic communications; with the right systems and tools in place, you can boldly take your business in new directions.

 

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2019 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

An All-In-One Solution

What does it take to communicate with consumers on their terms, comply with changing rules, and keep operating costs low? Cloud-based contact management, fully integrated and automated, holds the key. Learn more about the all-in-one platform that can transform daily operations, customer service, and collection results.

Beyond Integration: How to Compete to Win in the ARM Market

Beyond Integration: How to Compete to Win in the ARM Market

This is the final post in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.   With its dense maze of business, legal, and market challenges, the ARM industry is a tough one...

How to Maximize Your Account Reps’ Collection Efforts

How to Maximize Your Account Reps’ Collection Efforts

This is the third of four posts in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.   In the collections business, as in all industries, time is money. Time well spent is...

What the CFPB Rules Mean to You: An Expert Panel Weighs In – Part 1

What the CFPB Rules Mean to You: An Expert Panel Weighs In – Part 1

The recently proposed CFPB rules for debt collection have left many in the ARM market scrambling, or at least feeling anxious and uncertain about the future. But take heart: the CFPB recognizes your challenges and concerns. Overall, they’ve done a commendable job outlining limits and safeguards agencies must adopt to comply with the Fair Debt Collection Practices Act (FDCPA) in the digital era.

Even so, those 538 pages raise a fair number of questions. Many ARM leaders, legal experts, industry organizations, and business owners continue to weigh in on collection agencies’ behalf as we near the close of the comment period (September 18, 2019) for the Notice of Proposed Rulemaking (NPRM).

Recently, I sat down with two ARM industry leaders to discuss the NPRM for the CFPB’s proposed rules.

Joining me for the webinar were:

 

Moderating the panel was Mike Bevel, Director of Education for the Compliance Professionals Forum and an editor at insideARM.

Our discussion centered on four major areas addressed by the proposed CFPB rules: call caps, electronic communications, limited content messages, and validation notices/required disclosures. Here’s a brief recap of our discussion (you can access the free webinar recording here).

 

Call Caps

The prospect of call caps, as addressed in the CFPB’s proposed rules, is worrisome for many consumer advocates and ARM agencies. Both camps have expressed confusion and unease about how limits will be defined and applied going forward.

 

Proposed Requirements

Agencies can make up to seven calls per debt before reaching a consumer, including leaving voicemail messages. Once contact is made, only one call can be made per week (with some exceptions, including a consumer’s callback request or a consumer initiating a call). This rule would not supersede state law rules.

While attempting to connect with a consumer using any of the phone numbers on file, the debt collector may take advantage of the seven calls per week restriction on a per-debt basis only if the collector can prove the attempted contact was with respect to a particular debt rather than all the active accounts in its inventory.

 

Lingering Concerns

Agencies with more than one phone number for a consumer might struggle to reach him/her in a timely manner, fearing that dialing within the limits but on multiple accounts could still constitute harassment. In addition, the proposed rules don’t define a “connected call,” leaving debt collectors with more uncertainty.   

Consumers are concerned about the per-debt standard (versus per consumer); an individual with multiple accounts could receive dozens of calls per week. Even so, it’s reasonable to assume agencies would take more care in trying to reach these consumers, and consumers could simply reach out to agencies to put a stop to excessive calls.

Many agencies keep an individual consumer’s accounts completely separate from each other, as required by clients in the financial and healthcare arenas (e.g., credit card accounts, ambulance bill/hospital bill/medical specialist bill). When no one has an overall view of a consumer’s account statuses, building internal controls to ensure compliance and achieve the ideal call frequency could be a Herculean task.

 

Electronic Communications

Since the FDCPA was signed into law in 1977, new communication technologies have introduced new complications for third-party agencies looking to move beyond phone calls and printed letters. For the most part, the proposed CFPB rules regarding email and text messaging offer clear directives regarding consumer consent and consumer privacy.

 

Proposed Requirements

Many agencies shy from email and texting due in part to the risk of unintentionally disclosing consumer debts to third parties. This is a major concern for consumers as well. The CFPB addresses various scenarios related to selecting an email address or mobile number to use for consumer communications.

The proposed rules will provide debt collectors with protection from the unauthorized disclosure of a debt to a third party when engaging in email or text communications so long as specific procedures are maintained regarding the selection and use of a mobile number or email address. The protections afforded debt collectors when communicating with consumers using mobile numbers and email addresses vary depending upon whether the collector uses a number or address the consumer used to initiate communication with the collector; provides the consumer with 30 days’ notice of its intent to use a particular non-work mobile number or non-work email address to communicate with the consumer; or uses a non-work mobile number or non-work email address the consumer recently used to communicate with the creditor or a prior debt collector about the particular debt.

 

Lingering Concerns

When agencies use electronic communications, their responsibility doesn’t end when they hit “send.” They will need to monitor delivery of email and text messages carefully by way of notifications from communication providers. If emails bounce or links aren’t opened, legally required disclosures must be resent through a different channel.

The proposed CFPB rules would allow debt collectors to use digital delivery options for required notices such as the validation notice, verification information, or the name of the original creditor. Specifically, the required disclosures may be included in the body of an email or accessed via e a hyperlink that directs consumers to a secure website. Recognizing the risks associated with hyperlink usage and the reluctance on the part of consumers to click on hyperlinks, the proposed rules include conditions that must be met before using a hyperlink to provide a required disclosure.

Consumers fear the prospect of being flooded with emails and texts. They also fear that collection agencies will make it difficult for them to opt out. But these fears may be overblown. Aside from existing laws against harassment and abuse (and the fact that electronic communications are not cost free), agencies will be inclined to limit email use to avoid being shut down by their ISPs due to spam behavior.

 

“We take the position with most things that are consumer oriented, especially when it comes to electronic and alternative communication, that they have expressed a preference at some point that they be communicated with through some means, and to ignore the fact that they have . . . does a disservice to that consumer.”

Michael Kraft, General Counsel, CCS Companies

 

Limited Content Messages

For many years, collectors have been skittish about leaving messages for consumers who can’t be immediately reached. The CFPB has addressed this issue specifically, first by defining limited content messages as attempts to communicate for purposes of the frequency of calls requirements, while at the same time declaring a limited content message to not be a communication in connection with the collection of a debt as that term is defined in the FDCPA.

 

Proposed Requirements

Limited content messages can be relayed via voicemail, text, or live communication with a third party as long as the message contains the following:

  • The consumer’s name;
  • A request that the consumer respond to the message;
  • The name or names of one or more natural persons the consumer can contact;
  • A callback number; and
  • If the message is delivered electronically, a disclosure explaining how the consumer can stop receiving messages through that medium.

 

Limited content messages may not be delivered via email, as an email address would reveal the sender—thus rendering the email an actual communication per the FDCPA.

For prerecorded voicemail messages, agencies should review TCPA regulations and verify appropriate consent (as would be required for auto dialing cell phones).

 

Lingering Concerns

While collection agencies are bound to protect consumer privacy (and consumer groups see limited content messages as obvious debt collection attempts), consumers are increasingly demanding transparency from businesses upfront. They want to know who’s trying to reach them and why. These two imperatives are somewhat in conflict, and the CFPB has yet to find a way to ease the tension.

The CFPB’s proposed natural person requirement might pose problems for larger agencies whose call centers lack the ability to transfer calls to specific agents. One simple fix, if the CFPB sees fit to institute it, would be to require agencies to request that consumers call a particular department and speak to any available agent.

 

“Personally, I don’t find the message as proposed to be super useful to the consumer. I think it sounds shady. I’m not sure who would respond to it—just saying ‘Please call me; this is about an account.’ I think if collectors would simply say, ‘This is about a [specific company] account, at least the consumer . . . could make a more educated decision about whether or how to respond.”

Stephanie Eidelman, CEO, insideARM/iA Institute

 

Don’t Miss Part 2 of the Panel Discussion

In my follow-up post, I’ll cover the most important aspects of the CFPB’s proposed rules regarding validation notices/required disclosures. I’ll also share new business imperatives that could require fundamental change, along with the most important takeaway for ARM agencies.

Here on the OS blog, our goal is to provide important, timely insights and actionable tips you can use to minimize risk and improve business outcomes. If you haven’t already, be sure to register for the blog to receive valuable new content right in your inbox. As always, we’ll do our best to keep you informed and up to date.

 

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2019 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

Ready to Text?

For a comprehensive guide to text messaging, check out our “Ready to Text?” eBook. In it, you’ll learn all the nuances, pitfalls, and timely developments you need to understand so you can connect with consumers on their terms. Download your free copy today.

Beyond Integration: How to Compete to Win in the ARM Market

Beyond Integration: How to Compete to Win in the ARM Market

This is the final post in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.   With its dense maze of business, legal, and market challenges, the ARM industry is a tough one...

How to Maximize Your Account Reps’ Collection Efforts

How to Maximize Your Account Reps’ Collection Efforts

This is the third of four posts in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.   In the collections business, as in all industries, time is money. Time well spent is...

Compliant, Consumer-Friendly Communications: What ARM Agencies Need to Succeed

Compliant, Consumer-Friendly Communications: What ARM Agencies Need to Succeed

This is the second of four posts in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.

 

In recent years, improving the customer experience has become a top priority for customer-facing businesses. Consumers want and expect service that caters to them, and businesses are competing—in some cases, succeeding or failing—based on how well they deliver.

The ARM industry is not immune to this trend. Although consumers don’t choose to engage collection agencies, they (like the companies that enlist these agencies) expect a positive, hassle-free experience, especially when it comes to communications and payment options.

In today’s digital world, offering a variety of convenient channels (text, voice, and consumer portals) is a must for any growth-minded business.

Just imagine the possibilities for your business if you were to make this leap. It would set you apart as a service leader in the eyes of clients and consumers alike. It would also bring more accounts to a successful conclusion. The easier you make it for consumers to pay, the higher your profits will soar.

Are you ready to move beyond traditional communication channels?

Or are compliance fears holding you back?

 

Conquer the Compliance Challenge, and the Sky’s the Limit

Many in the ARM industry recognize digital communications trigger new compliance challenges. Many more have conquered them. Compliance with digital communication requirements need not keep you from meeting the needs of your clients or the preferences of consumer.

The CFPB’s proposed new rules, which include conversation history requirements and E-Sign consent for text and email, conjure nightmare scenarios among ARM business owners. To remain compliant, agencies would need to track consumer consents, preferences, and prior communications in real time and make them visible to everyone in the organization.

Since many agencies aren’t equipped to do that, they remain stuck in the past, unable to seize opportunities that could propel them forward.

The good news is, you don’t have to choose between embracing new communication tools and minimizing compliance risks. With an alternate tech approach that simplifies compliance management, you can have the best of both worlds.

 

An ARM Ecosystem Makes Real-Time Compliance Management Easier

There’s no shortage of best-of-breed tech solutions offering advanced communication tools. But as we explained in an earlier post, bolting those solutions onto the tech stack in piecemeal fashion per the classic ARM integration model leaves collection agencies legally vulnerable.

  • The absence of a shared database creates visibility gaps between and among point solutions.
  • As accounts move through the collections cycle, they can’t be tracked in real time across various channels and platforms.
  • Without a central “brain” guiding all functions and tools, changes and updates made in one platform don’t trigger a response or action in others.
  • Nor can consent and revocation of consent be meaningfully applied to your digital communication strategy.

An ARM ecosystem helps you mitigate these problems—and the guesswork that normally occurs on the front line—by virtue of its holistic design. It also provides safeguards that help minimize human error. In this environment, compliance management is no longer a managerial burden; it’s deeply ingrained in the collections cycle.

 

— Imagine what you could accomplish if your collectors knew when, whether, and how to contact consumers. —

 

Ontario Omni®, our full suite of cloud-based omnichannel communication tools designed to work seamlessly together and with other elements of the ARM ecosystem, allows agencies to offer consumers the convenience of voice, text, and consumer portals while significantly reducing compliance risk. Its built-in mechanisms help to guide the proper frequency, nature, and timing of contacts in accordance with changing state, federal, and company regulations.

Attempts to communicate in a noncompliant way trigger alerts. The moment a consumer preference, consent, or account status changes, the entire ecosystem reacts. Our developers are also working to incorporate upcoming CFPB rule changes ahead of time, so agencies can continue operating within the new regulatory framework.

 

The ARM Ecosystem in Action: Snapshot of an Inbound Call

 

In an ARM ecosystem, the entire system responds to every inbound call. It identifies and verifies the caller before routing the call to the most appropriate collector based on the caller’s location.

The collector is presented with essential account details, applicable laws and requirements, and next steps.

Call scripts, call recording (with agency-controlled masking), call ID scrubs, reassigned number scrubs, and scoring results are activated right away.

Ready to Improve Your Long-Term Prospects?

By moving beyond classic bolt-on ARM integration and adopting a more holistic tech solution, you’ll start operating in a whole new way. Not only will your collectors work more efficiently, but they’ll be armed with knowledge and tools that can help them stay compliant.

Instead of worrying about your collectors’ potential for liability, you’ll be focused on their potential for generating revenue—and what that could mean for your company’s future.

Get started on the path to greater profits with our complimentary eBook “The ARM Ecosystem: Advancing Beyond Integration.” This brief guide explains how the ARM Ecosystem works and how it can help you operate and compete more effectively. Download your free copy today.

 

Don’t miss the other posts in the ARM Ecosystem series:

 

For more insights and tips you can use to accelerate your success in the ARM market, subscribe to the OS blog. We’ll deliver high-value content straight to your inbox.

 

Boost collections. Lower costs. Close compliance gaps.

Your approach to innovation may be hindering your success. Download “The ARM Ecosystem: Advancing Beyond Integration” and learn what a holistic, seamless collections operation can do for you.

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2020 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

Data Privacy and Security: What’s Next for Debt Collectors?

Data Privacy and Security: What’s Next for Debt Collectors?

Data privacy and data security are two very hot topics in the ARM industry today. The California Consumer Privacy Act (CCPA) is set to take effect in January 2020, with additional privacy bills now pending in at least 25 states. Meanwhile, cyber crimes involving...

Data Privacy Laws: Is Your Business Ready for What’s Coming?

Data Privacy Laws: Is Your Business Ready for What’s Coming?

On July 11 in Washington, D.C., the U.S. Chamber of Commerce hosted #DataDoneRight, a one-day summit highlighting the policy issues surrounding businesses’ use of consumer data. It was an engaging, eye-opening event that drew together a variety of stakeholders and speakers.

The day’s presentations offered many important takeaways, but the bottom line was clear. If your business or customers rely on consumer data to provide good service, make strategic decisions, and ultimately make a profit, you should be focused on preparing for data privacy legislation that’s heading your way.

As a member of the Chamber’s Technology Engagement Center (C_TEC) and on behalf of Ontario Systems, I’ve had the distinct privilege of helping develop the Chamber’s proposed federal legislation addressing the need for a national data privacy framework. We at Ontario Systems understand that the businesses in the industries we serve are passionate about protecting consumer data, while at the same time are dedicated to providing data-driven innovation. Working toward establishing appropriate rules, as well as sufficient time to implement those rules is of utmost importance, thus we jumped at the chance to represent our industries to ensure their voice is heard in the hopes of preventing a far more painful scenario: a tsunami of conflicting state laws that could overwhelm businesses and upend our digital economy.

 

Why Is a National Regulatory Framework in Businesses’ Best Interest?

In 2018, California was the first state to pass sweeping data privacy laws (the California Consumer Privacy Act, or CCPA). As of February 2019, 11 more states had introduced their own data privacy legislation. In the absence of comprehensive federal law (and with no promising signs that Congress will act soon), more and more state legislatures will be forced to address this issue.

A patchwork of 50 state laws will not only create mass confusion among consumers and businesses, but also hit small and midsize businesses particularly hard. Staying compliant and fighting red tape across state lines will be complex, costly endeavors requiring significant resources. This new legal minefield could simultaneously create a chilling effect and open the door to countless lawsuits, thus hampering or endangering small to medium-sized enterprises’ (SME) ability to conduct business.

The CCPA and the EU’s General Data Protection Regulation (GDPR) are contrasting studies in data privacy legislation. In terms of how they were developed and how they’re impacting businesses, both of these models offer lessons we hope lawmakers will take to heart.

 

The California Consumer Privacy Act (CCPA): A Blueprint for State Action?

The California Consumer Privacy Act (CCPA), which will go into effect next year, was conceived as a David vs. Goliath effort to protect consumers from Big Tech data abuses. The CCPA was developed over a short period of time and without enough business input. According to #DataDoneRight presenter and Californians for Consumer Privacy Board Chair Alastair Mactaggart, the law is largely a rebuke of two leading tech giants—whose combined 2018 revenues of $192 billion were earned, he says, “on the backs of others’ data and information.”

But most businesses are not tech giants, and many use customer data in helpful, important ways.

For example, #DataDoneRight attendees learned that Thompson Reuters, through responsible data sharing, has helped solve crimes such as shootings, sex trafficking, and Medicare Fraud. There are many more businesses, both B2C and B2B, who use customer data every day to make the customer experience more personalized, convenient, and valuable.

By introducing private rights of action, the CCPA has made it possible for consumers with privacy claims to sue any of these companies at will. Individual lawsuits favor lawyers over consumers, as they tie up businesses without effecting meaningful change.

Developed without input from California’s diverse business community, the CCPA may have severe unintended consequences for SMEs. In addition, companies will have less than six months to update their compliance programs for the new sweeping comprehensive privacy regime. Whether forthcoming amendments will help achieve the right balance between consumer and business interests remains to be seen.

 

EU’s General Data Protection Regulation (GDPR): A Blueprint for Federal Action?

The EU’s GDPR, adopted in April 2016, reflects the distinct philosophies and needs of European businesses and consumers. It was developed over a longer period of time based on in-depth research and wide-ranging input. The GDPR addresses both data privacy and data security, requiring customer consent regarding use of data and security measures that protect data. Unlike the CCPA, the GDPR granted businesses a period of two years to prepare compliance.

The GDPR is a comprehensive legislative framework, albeit substantially different from what U.S. legislators might come up with to drive innovation and economic growth here at home. The process that led to the GDPR was methodical, inclusive, and patient, and our legislators would do well to emulate it.

Yet even without the added complexity of patchwork laws, smaller companies with business interests in the EU bear an inordinate burden.

Larger U.S.-based firms have spent nearly $150 billion to ensure compliance with the GDPR, and Microsoft alone has assigned 1,600 engineers to the task. Unable or unwilling to bear the costs of ensuring compliance, many businesses have simply pulled out of the European market.

 

State and Federal Lawmakers Should Proceed with Caution

States’ rush to enact data privacy legislation is driven in part by a common perception among consumers that data privacy and data security are largely the same. But privacy (preventing unauthorized or undisclosed data sharing by a business) and security (preventing data theft by outsiders) are largely separate issues.

According to a recently released data privacy report from the C_TEC group, despite a dramatic increase in data breach incidents and volumes since 2005, fraud losses have dropped from $35 billion to under $15 billion during the same period. This suggests consumers are far more affected by cybersecurity and fraud prevention measures than they are by having their data exposed.

Don’t get me wrong: consumers have every reason and every right to be concerned about data privacy. But too hasty or heavy-handed an approach on the part of legislators in an attempt to ease constituents’ concerns may bring significant harm to businesses, consumers, and the economy.

If Congress is to act on this issue, any legislative proposals must reflect a thorough understanding and careful consideration of all stakeholders’ interests.

 

A Call to Action for Business Leaders: Get Ready, Get Involved

Data privacy legislation is inevitable. It’s also a mission-critical issue for businesses of all sizes. Small and midsize businesses in particular have a lot of decisions to make and work to do to ensure compliance using the resources they have (or with investments they’ll need to make).

I encourage you to educate yourself on the issues involved in the data privacy debate. Follow legislative developments. Go a step further, and become an influencer. Let your congressional representatives know where you stand. Remind them the General Accounting Office endorses a national data privacy law; even the FTC commissioner has publicly expressed support. This is a bipartisan issue, and federal legislation is a solution both parties can get behind.

We joined to U.S. Chamber to advocate for our clients, vendor partners, and similar businesses whose concerns need to be heard on Capitol Hill. By speaking out on behalf of a national data privacy law that benefits and protects both businesses and consumers, you can make a lasting impact. To learn more about what C_TEC is doing on data privacy and technology issues, visit www.americaninnovators.com.

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2019 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

3 Ways Tech Integration Is Failing ARM Businesses

3 Ways Tech Integration Is Failing ARM Businesses

This is the first of four posts in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.

 

In their quest for market dominance, more and more collection agencies are vying to become the earliest of early adopters. They stay on top of the latest advances in ARM technology and move quickly to avoid being left behind.

Maybe you can relate. As tech innovators, researchers, and developers, we certainly can.

The allure of point solutions offering predictive analytics, AI-powered bots, personalized consumer engagement, etc., is strong. Like Tantalus’s mythical fruit, they dangle in front of business owners and IT teams, begging to be integrated into core collection platforms—a seemingly simple path to a much more streamlined, successful operation.

But the reality is a bit more complicated.

Best-of-breed solutions should, in theory, excel at their respective functions while working together in harmony to simplify collections. But inherent flaws in the classic ARM bolt-on integration model can have the opposite effect, thus working against business goals and interests.

Here are three big problems that tend to accompany the typical ARM tech stack.

 

Problem #1: Outsized Technical Burdens and TCO

Bolting ancillary solutions onto an existing tech stack creates the need for custom integrations and multisource business logic to ensure the level of interoperability collection agencies need today. A unified, seamless tech environment is crucial for streamlining account management, helping adhere to day-to-day compliance demands (in step with ever changing rules), and achieving optimal revenue recovery.

By virtue of its disparate multivendor design and architecture, the classic ARM bolt-on integration model shifts the burden to collection agencies to play the role of IT provider. System maintenance is a never-ending cycle that eats valuable time and resources.

When an otherwise routine update or technical fix is performed, it reverberates throughout the system. Disparate but interdependent parts, like links in a chain, then require their own reconfiguring so they remain compatible and fully functional.

For businesses, this unwieldy setup translates to a higher total cost of ownership (TCO) and increasing IT investments over time. It also means less time spent on developing high-value IT initiatives and strategies that drive revenue (e.g., onboarding new clients faster).

 

Problem #2: Ongoing Compliance Risks

According to BillingTree’s 2018 ARM Operations and Technology survey, compliance is the industry’s foremost operational concern. That concern may also be the industry’s greatest obstacle to progress.

While most ARM businesses aim to provide a better experience for consumers—thus becoming a “sticky” provider to clients and increasing recovery rates—many feel trapped in a complex web of federal, state, and municipal laws governing contacts and payment methods. Paralyzed by fear of risk, these businesses are reluctant to move in new directions.

Consider, for example, the CFPB’s proposed new rules. Agencies must abide by call caps, meet conversation history requirements, and get E-Sign consent for use of text and email messages in legally required notices. But visibility gaps between and among point solutions in an integrated tech stack pose major risks.

There’s no system-wide awareness of consumer preferences, consents, and prior communications. There’s no way to track customer data and communications through the entire operational cycle, without adding that data flow burden to the agency, adding again to the TCO. Therefore, there are no built-in protections against initiating too many or the wrong types of contacts.

For ARM leaders who are looking to improve their long-term prospects but concerned with maintaining compliance, the opportunity costs and potential liabilities they face make the classic ARM bolt-on integration model a lose-lose proposition.

 

Problem #3: Lingering Inefficiencies

Classic ARM bolt-on integration not only consumes resources on the IT side, but also limits gains in operational efficiency. The same lack of visibility that increases compliance risks also denies collection agencies the insights they need to take control of and streamline the collections cycle.

Even with best-of-breed solutions powering collection functions across the board, there’s no central brain governing and tracking account activity. As a result, agents continue chasing low-value accounts, or chasing high value ones at the wrong time, or with the wrong channel, or for too long. Productivity suffers, as does revenue recovery. Business leaders can’t make informed decisions, and agencies risk falling behind in a fast-moving industry.

In this environment, a central brain is the key missing ingredient. In fact, it’s the very thing ARM businesses need to thrive. It can help ensure every account is worked properly, minimize operational and cost burdens, make compliance the default, and empower IT personnel and agents to bring more value to the business.

 

What’s the Alternative to Classic ARM Bolt-on Integration?

An ARM ecosystem differs from an integrated tech stack in ways that free and enable businesses to accelerate their success. All tools in the ecosystem are designed from their inception to fit and work together seamlessly in a single unified system. All account data is shared, and accounts are easy to track and manage. System management and customization are simple, and built-in safeguards greatly reduce compliance risks.

You can read more about how the ARM ecosystem works and how it transforms collections in our complimentary eBook “The ARM Ecosystem: Advancing Beyond Integration.” Download your free copy today.

 

Don’t miss these other posts in the ARM Ecosystem series:

 

For more insights and tips you can use to accelerate your success in the ARM market, subscribe to the OS blog. We’ll deliver high-value content straight to your inbox.

 

Boost collections. Lower costs. Close compliance gaps.

Your approach to innovation may be hindering your success. Download “The ARM Ecosystem: Advancing Beyond Integration” and learn what a holistic, seamless collections operation can do for you.

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2020 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

Why Isn’t Technology Delivering Better Results for Collection Agencies?

Why Isn’t Technology Delivering Better Results for Collection Agencies?

This is an introduction to our first OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.

 

As an ARM business leader, you have a lot to contend with. You’ve watched operating costs continue to rise. You’ve struggled to get a handle on compliance (a constantly moving target). You strive for better and better results.

Like many others in your industry, you’ve invested in tech innovation to manage these demands and risks with the hope of accelerating and sustaining growth.

How well has your investment paid off? Did you expect better returns?

Having served the ARM market for 30+ years, we know this with 100% certainty: how you innovate can mean the difference between a tech-powered environment (relying on disparate tools for daily operations) and a tech-empowered environment (removing burdens and constraints to unleash productivity and ROI).

The difference between these two operating models can be vast. Based on our experience, we believe every ARM company should strive for the latter.

 

Long-Term Success Depends on Keeping Innovation Simple

When it comes to innovation, technology can, and often does, become its own issue. Managing the tech stack can gobble up time and resources, and inherent weaknesses can leave ARM businesses on shaky legal ground.

Any tech solution you implement should be steady, reliable, cost-effective, and unobtrusive. It should empower collectors to do more and management to worry less. In fact, day-to-day compliance should be as easy and natural as breathing air. If this isn’t happening in your organization, you might want to consider an alternative to your current tech stack. We call it the ARM ecosystem.

 

Exploring the ARM Ecosystem: Other Topics in the Series

In the following posts, we explain how the ARM ecosystem works and dive into several major issues it addresses. You won’t want to miss these.

Rethinking the Typical ARM Tech Stack
Classic ARM integration, which involves bolting point solutions from multiple vendors onto a core collections platform, leaves big gaps that can increase operating costs and exacerbate compliance risks. We’ll explain why and discuss how an ARM ecosystem eliminates these problems by design.   >> Read “Why Isn’t Technology Delivering Better Results for Collection Agencies?”

Supercharging Collectors’ Performance
In a typical tech-powered environment, collectors aren’t equipped to make informed decisions or prioritize accounts. An ARM ecosystem provides real-time insights collectors can use to recover more revenue. We’ll show you how an ARM ecosystem empowers collection teams to optimize their performance and results.   >> Read “How to Maximize Your Account Reps’ Collection Efforts”

Reconciling Compliance Management and Consumer Demands
Many collection agencies avoid adopting text, email, and other forms of electronic communication because they’re concerned about compliance risks. But they know these new channels offer more effective options for consumers to pay. We’ll explain how an ARM ecosystem allows agencies to communicate in consumer-friendly ways that support compliance with federal and state regulatory requirements.   >> Read “Compliant, Consumer-Friendly Communications: What ARM Agencies Need to Succeed”

Competing to Win
We’ll show you an ARM ecosystem in detail and in action. We’ll also outline the five big benefits that give ARM agencies a leg up in the marketplace.   >> Read “How to Compete to Win in the ARM Market”

 

Follow Our Blog for Breaking News, Industry Insights, and More

Be among the first to learn about what’s new in the ARM industry, what’s around the corner, and the solutions we’re working on to address the problems that are limiting your company’s potential. Plus, get expert analysis, insights, and tips you need to succeed in a complex, fast-changing marketplace. We’ll deliver it all, straight to your inbox.

Subscribe to the OS blog

Boost collections. Lower costs. Close compliance gaps.

Your approach to innovation may be hindering your success. Download “The ARM Ecosystem: Advancing Beyond Integration” and learn what a holistic, seamless collections operation can do for you.

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2020 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

ACA International Members Clamor for Text and Email

ACA International Members Clamor for Text and Email

Members of the trade group ACA International, the Association of Credit and Collection Professionals, have always placed compliance, training, and innovation as guide posts for their collection operations. This year is no exception.

During ACA’s recent convention and expo in San Diego, California, I joined David Kaminski, senior partner at the law firm Carlson & Messer LLP, to lead a standing-room-only session in which we detailed the “how to’s” of text messaging, email communications, chat, and E-Sign. Our goal was to translate complex compliance requirements into everyday, scalable contact management solutions.

During our session, we tried to help attendees understand not only how to build a robust digital communication program under current law, but also how the Consumer Financial Protection Bureau’s (CFPB) new proposed rules for debt collection will impact text and email communications.

As I mentioned during the session, one of the most significant road blocks debt collectors must overcome before implementing a digital communications program is compliance with the Electronic Signatures in Global Commerce Act (E-Sign).

Text Messaging Session: Key Takeaways

  • The Telephone Consumer Protection Act (TCPA) controls when and how a text message may be sent to a consumer’s mobile phone if sent using an automated platform.
  • The Fair Debt Collection Practices Act (FDCPA) and state law requirements impact text message programs offered by third-party debt collectors.
  • The Cellular Telephone and Internet Association (CTIA) controls the format and content of short-code text communications.
  • Text messages are deemed as calls, so days of week, times of day, and other calling restrictions DO apply to text communications.
    Texts require consumer consent.
  • Texts are communications under federal and state law.
  • Texts are not writings.
  • Disclosures and verbiage otherwise required in written communications need not be included in text message communications.
  • Character restrictions are challenging but not insurmountable.
  • Terms and conditions must be presented to and agreed upon by the consumer before engaging in a short code/key word text message self-service program.
  • Senders of text messages must track delivery rates, bounce backs, deactivated or ported numbers, and open rates for URLs.
  • The CFPB’s proposed rules for debt collection impose requirements for the format of the text, the inclusion of the creditor’s name, the identification of the account(s), and the information that may or may not be included in the body of the text.

Email Communication Session: Key Takeaways

  • The FDCPA and state law requirements impact email communications between third-party debt collectors and consumers.
  • Emails are writings.
  • Emails require consumer consent.
  • Emails are communications under federal and state law.
  • Emails are not calls, so days of week, times of day, and other calling restrictions DO NOT apply to email communications.
  • Disclosures and verbiage otherwise not required in text communications need not be included in email communications.
  • Information may be included within the body of an email without worry of character restrictions.
  • Senders of emails must track delivery rates, bounce backs, and open rates for URLs when communicating with consumers using email.
  • The CFPB’s proposed rules for debt collection impose requirements for the format of the email; rules for the to, from, and subject line of the email; the inclusion of the creditor’s name; the identification of the account(s); and the information that may or may not be included in the body of the email.

Chat Communication Session: Key Takeaways

  • Chat sessions are controlled by the TCPA, the FDCPA, and in some respects the CTIA depending upon the business model of the sender (creditor, EBO, or first- or third-party debt collector).
  • Chat sessions are a form of text messaging and are more akin to a writing than a call.
  • Chat sessions are initiated by the consumer.
  • Chat sessions are considered a customer service offering.
  • Chat sessions are communications under federal and state law.
  • Chat sessions create a transcript which a consumer may keep and access later.
  • Chat sessions should be introduced with the FDCPA Miranda warning if it is the first communication with the consumer (third-party debt collectors only) along with a statement explaining it is a single conversation with the consumer (as opposed to multiple texts to the consumer).
  • Chat sessions should be concluded with an explanation to the consumer that the company’s agent is leaving the chat session.
  • Like texts and emails, chat sessions can be scripted.

Electronic Signatures in Global and National Commerce Act (E-Sign) Disclosure: Key Takeaways

  • E-Sign is the law which allows digital records, authorizations, and disclosures otherwise required by law to be provided to the consumer in writing and delivered to the consumer electronically.
  • E-Sign is the law which allows digital signatures (sounds and symbols) to be applied to electronic records electronically.
  • E-Sign requires the business to provide the consumer with a statement of rights as a condition of granting their E-Sign consent to receive required written disclosures electronically.
  • E-Sign is recognized by the CFPB as a required step when delivering required disclosures electronically; specifically, the validation notice, the name of the original creditor, and responses to a consumer’s request for verification of the debt (see new rules section 1006.42).

Start Communicating Electronically with Confidence and Ease

To assist members of the ARM industry, healthcare providers, and federal and state governments with their digital communication programs, Ontario Systems provides on-site and video conference consulting services. Whether you need help with policies and procedures, text message scripts, email templates, training or technology implementation, or even role-based training, our Ontario Systems consulting team is here to help.

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2019 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

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