Creditors and Collectors Should be Talking Now, Before the CFPB Starts to Dictate the Conversation

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Stephanie Eidelman

Stephanie Eidelman

As we all are aware, the CFPB is in the process of considering establishing new rules that will govern debt collectors. The Bureau has signaled that its intention is to hold both first- and third-parties accountable for processes such as the transfer of account data, dispute handling, and vendor oversight.

Based on what I hear, proposed new rules are expected in the coming 5-12 months. Wouldn’t it make sense for the groups to be talking to each other to better understand the challenges each group faces, and to begin figuring out – together — how to improve the process for everyone, including the consumer?

I have heard of several instances where creditors take the position that they’re the ones in the driver’s seat when it comes to their services providers. There is no need to talk. The vendors will simply have to follow the rules they set. Respond to the audit questionnaires they develop. Figure it out. “I don’t care that you have other clients, who are all requesting the same… but different… things. Oh, and about those fees, they need to be lower. Times are tough.”

I have heard collectors say they simply can’t come up for air. Also, why would I get together in a room with my competitors and my clients, or their clients? That may leave me vulnerable.

I am seeing an unprecedented focus on compliance by many, which is great news; however I am also seeing the wheel being reinvented time and again.

Collections is an intensely private industry, with cards held close to the vest. I get it. Competition is fierce. But this fragmentation also leads to lost opportunity for efficiency and baseline standards. And creditors should be just as interested in this as collectors.

Some creditors say there is no reason to talk until the CFPB comes out with a Notice of Proposed Rulemaking… or even the final rules themselves. I think that’s a mistake. It takes time to develop practices. It takes time to implement new processes. It takes time to build trust, and that’s what’s needed for all parties to truly benefit from conversation and shared standards. Wouldn’t it serve everyone’s interests to already be at the table and talking so that both groups are prepared to respond efficiently and effectively as the process unfolds?

If this idea resonates with you, you may want to join a June 25th webinar (free) on this topic, hosted by insideARM.com and Interactive Intelligence. It’s called “Hitting the Crossroads: How Creditors and Agencies Will Never Be the Same.”

Also, in November, the iA Institute, parent of insideARM.com, is hosting a Summit to bring a select group of creditors and collectors to the table. This is a 1:1 event (ratio of one creditor to one collector) and is focused on discussion; not speeches, and not sales. This Summit will be the beginning of an ongoing dialogue between a group of forward-thinking creditors and collectors in a forum that facilitates action, as well as information. Click here to learn more about this event.

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Posted in CFPB, Collection Laws & Regulations, Collection Laws and Regulations, Credit Grantors, Debt Collection, Opinion .

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  • avatar Raymond says:

    I could not agree more with Stephanie. Part of the lack of communication is lack of collection experience on the creditor side but waiting for the storm to come and when the liability/consequences belong to both the creditor and collection agency or collection law firm both will be speaking to a judge and/or jury. Seems to me that most can ask questions, but fail to question answers.

  • avatar Marlene Moorman says:

    I agree with Stephanie. This makes sense without regulation dictating the way we conduct business. Just because you have a customer in collections doesn’t mean they will always be in the financial situation they are in today. Ultimately the tone of the conversation and the guidelines in place to collect the account will determine the take away of the borrowers view of your company. The agency is and always has been an extension of your company and therefore your company’s reputation. Customer service doesn’t have to end when the customer is past due. As a matter a fact, this is the most vital time for those skills to be utilized. An agreement with your agency on policy will produce improved communications for everyone.

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