In LexisNexis® Risk Solutions’ “Ask the Business Experts” series, Linda Straub Jones, Director of Collections Compliance at LexisNexis Risk Solutions, the data and analytics provider, sat down with Rozanne Andersen, Vice President and Chief Compliance Officer at Ontario Systems, to discuss how the collections industry has evolved to tackle new compliance regulations, as well as the trends debt collection agencies will have to face in future.
Linda Straub Jones: Thank you so much for joining us today, Rozanne. What would you say has been the biggest compliance challenge for the accounts receivables management industry in the past decade, with regards to debt collection agencies’ bottom lines?
Rozanne Andersen: Without a doubt, it has been the Consumer Financial Protection Bureau’s (CFPB) requirement for agencies of all sizes to implement a compliance management system.
Compliance management is a discipline within an agency that cannot be taken lightly. It is not achieved by assigning a long-term employee with a new title or telling them to wear a second or third hat. It can only be achieved with planning, training and in some environments, hiring. But with that comes increasing costs to the basic infrastructure of an organization. If you look back 10 years, most debt collection agencies did not have compliance as a line item in their budget. It has only been since the advent of the CFPB that we’ve started to see agencies budget for the expense of driving a compliance management system within their organization.
In many ways, compliance has become a differentiator for collection agencies. Companies that have invested heavily and meaningfully in a compliance management system are using that to win RFPs and stand out among the pack. However, I think this is also the main reason why we have seen carnage among the small to mid-size debt collection agencies, which cannot afford to compete with the additional cost of compliance.