When a company called TrueAccord came onto the scene a few years ago promising all (or mostly) digital collections powered by artificial intelligence, many were skeptical. At the time, the founder announced that it was a service for creditors to use, and therefore was not subject to the Fair Debt Collection Practices Act (FDCPA).

Things have changed. The company has since been building its San Francisco-based team, and now primarily offers services as a third party debt collector.

Earlier this fall they hired Tim Collins, a well-known Chief Compliance Officer from the traditional collection industry. And a few months ago, Ohad Samet, TrueAccord’s CEO, was added to the Consumer Advisory Board (CAB) of the Consumer Financial Protection Bureau (CFPB). He made a presentation last week at his first CAB meeting, which we also write about today.

In August, insideARM wrote about another new player. Collectly -- a collection service for healthcare providers and medical billing companies -- uses aggregated machine intelligence to forecast behavior and adjust each patient’s collections journey to encourage the best outcome. 

Today, a new start-up in Australia called Credit Clear announced that it had stolen a new CEO from its competitor, and is planning to raise $10 million to fund expansion into new markets, including the United States. The announcement states that the company “automates the debt collection process and facilitates customer communication over Facebook Messenger, SMS, or email.”

According to the firm’s website,

“Credit Clear provides a global solution, facilitating payments in any currency whilst automatically translating messages into your customers mobile phones default language.

Our machine learning engine, decides when to send, what to say and on which communication platform (SMS, email and Instant messenger) - sending tailored communication depending on your customers, age, gender and location.”

insideARM Perspective

Many creditors and debt collectors are likely looking at these firms saying something like, “this is fine for some new economy accounts, but most traditional creditors won’t tolerate it.”

Questions remain: Can you send required notices digitally while adhering to the FDCPA and maintaining privacy? What is required to prove consent to communicate through digital channels? These and others are likely to be addressed one way or the other in the coming months and years, because progress and momentum are demanding it.

Collection agencies that operate on older infrastructure, and/or on a people-heavy, call center-based model, will likely have plenty of work for the near future. Many creditors are likely too conservative, or too unprepared to provide the type of electronic data required to scale this type of solution. Indeed, there is also a population of consumers -- especially older ones -- who are not tech savvy enough to interact digitally regarding a debt.

But I suspect that over time, this will all change.


Editor's note: An earlier version of this story referred to TrueAccord as an Israeli startup. The company is based in San Francisco. They do not have an Israeli office, however, the founders are Israeli.  

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