Earlier this week insideARM CEO and publisher Stephanie Eidelman moderated a panel discussion at SourceMedia’s National Collections & Operational Risk conference in Miami.
The panel, entitled “Collaborative Resolution to Long Standing Collection Challenges” was a discussion among the many stakeholders in the collection process, and included:
Will Lund, Superintendent, Maine Bureau of Consumer Credit Protection (regulator perspective)
Patricia Hasson, President, Clarifi (consumer perspective)
Tim Bauer, CEO, Integrity Solution Services (collector perspective)
Craig Patterson, VP BPO Management, GM Financial (creditor perspective)
Paula-Rose Stark, Senior Principal, Promontory Financial Group (consultant – representing both creditor and regulator perspective)
The group covered three topics at the center of today’s regulatory dialogue: voicemail messages, the cost of compliance in general, and the intertwined issues of data availability and dispute handling.
Stephanie Eidelman began the discussion around voicemail messages by offering the following pre-Foti style message proposed by the Consumer Relations Consortium in its ANPR response, and asked panelists to comment on its merits:
“Hello, this is Jane Smith calling to speak with John Doe. This concerns an important personal matter. Please call back at 800-555-1212 and reference account number 12345. Thank you.”
Patricia Hasson noted that she could live with this if there could also be some assurance that it would limit/stop additional calls. She raised the point that a limit such as the 3 calls per week (and one voicemail) proposed by the National Consumer Law Center (NCLC) in its ANPR response might seem reasonable (or even low to some) but we need to remember that consumers who are being contacted by one agency may often be in collections with multiple agencies at once, collecting on various debts.
Will Lund commented that the proposed message doesn’t appear deceptive, doesn’t contain intentional disclosure, and would be preferable to a hang up.
Craig Patterson added that it’s up to the creditor to have creative alternatives to offer consumers when they are able to make contact by phone, in order to help resolve accounts and reduce the number of necessary communications.
The cost of compliance discussion raised the issue of the importance of balancing the clear benefits of compliance to all stakeholders with the practicality of managing numerous simultaneous audit requests.
Tim Bauer commented that his firm is so focused on responding to individual, and non-standard, requests for policies and procedures from clients and regulators that they are challenged to test their compliance since they have yet to experience steady-state operations.
Will Lund noted that private civil actions over technicalities are as frustrating to his office as they are to the industry. With their limited resources, they’d much rather focus on weeding out truly bad actors. Active in the leadership of NACARA (North American Collection Agency Regulatory Association), he also noted that Maine generally follows Federal guidelines and encourages his colleagues in other states to do the same, rather than develop custom/additional rules.
P-R Stark added that this shared burden across the collection ecosystem represents a critical collaborative opportunity. All panelists – as well as members of the audience – agreed that industry-wide standards for data security and other core policies would help immensely to decrease complexity, reduce errors, and increase efficiency across all levels of the compliance chain.
With respect to data availability, panelists raised the issue of complexity associated with so much human intervention in the process of accurately recording and processing data, in both the 3rd party collector and creditor domains.
There are many details relating to every single consumer interaction that must be recorded without error by thousands of collectors, while on the phone, often in a pressured situation. Absolute consistency – even with the best of intentions – is a practical challenge. Notwithstanding this challenge, there was agreement that information such as the fact that a consumer has disputed the debt or exercised her right to cease communications should be shared from creditor to collector, and on to each company that handles or owns the account.