Welcome to the Research Assistant Weekly Newsletter - a subscriber-only resource for insight into emerging compliance challenges, details on peer calls, and links to new Research Assistant reports, documents, tools, and more.
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In the recent CFPB enforcement action against Commonwealth Financial Systems, Inc., the CFPB faulted the debt collector for failing “to establish and implement any written policies and procedures requiring it to review records reflecting historic dispute trends, which would have been critical to its ability to identify, for instance, recurring disputes with the same root cause or clients with particularly high dispute rates.” Research Assistant members discussed the information they track related to complaints and how the resulting trends are used.
Some members compared the disputes rates of clients against similar clients, for example, clients from the same industry vertical, or clients of similar size or volume of placements. An outlier might indicate a problem with the accounts placed, or with client-provided information, or something even more significant. Comparisons of client’s data by consumer demographic information can also lend insight into the underlying disputes, for example, breaking disputes out by state of residence of consumers can give insight into out of statute debt performance that may make an agency consider alternative approaches to working accounts in demographic categories.
Members use a variety of software to track data, from Excel to PowerBI and Tableau to help automate the data comparison process. These require some amount of programming, including creating dropdowns or other conventions to keep data entry consistent and easy. Regardless of the methodology used, including particular data points can make the tracking worthwhile, especially when communicating to clients who seem to think sending validation to their debt collectors is not worth the time spent. Tracking the debt balances and reporting to clients the dollar value of their accounts that are collecting dust because of the regulatory requirements to validate or cease collections motivate many clients to take requests for validation much more seriously.
A key take away from the discussion emphasizes that data analysis is only one part of the puzzle. Using the data to make decisions about segmenting a client’s accounts for credit reporting or not, depending on the availability of validation, demonstrates an understanding of regulatory requirements to the CFPB and supports client relations by providing data-driven reasons that will keep both of you out of trouble.
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