So, my last blog had a Wizard of Oz theme and today what made me smile was a vision of the CFPB, playing the part of the ‘Lions and Tigers and Bears’. Recently the CFPB announced a plan to gather opinion about the Collections industry by issuing an Advance Notice of Proposed Rulemaking (ANPR). Oh My! I am at my core a debt collector – you can call it Receivables Management (I even had a stint with the words Risk Management in my title), but when you boil it all down, I am a debt collector. And now the CPFB is looking at consumer protection in my world, the Collections World.
I have always understood the collections space to be very highly regulated, and yet, it’s still becoming more regulated today. The use of technology is constantly under fire with regulations determining how and where we can use power dialers to speak to our customers; the language we use is scrutinized, both in live conversations and in messages we leave, balancing privacy with disclosure about who we are. It is a veritable minefield already. So now the CFPB is seeking opinion on how we can better protect our customers in this space?
Without further ado, I am getting out my crystal ball and making some predictions about where the hammer will metaphorically fall once the CFPB releases its findings.
I think there are several obvious targets: The effective and efficient management of complaints, a robust documentation trail, all the way back to the initial application, and increased liability for third parties and their actions. I am also wondering if anything will be done with the confusing and still much-debated TCPA regulations that are crippling our ability to make contact with the customer by the most efficient channel, the cell phone. But that’s a whole story in itself!
So, I welcome legislation that has best practice at its heart. We should all have solid documentation before we initiate serious procedures such as litigation and foreclosure. We should be able to manage a complaint in a straightforward and efficient manner, and we should be responsible for the actions of the people we contract with to act on our behalf. These are not unreasonable standards, however there unfortunately have been too many cases where credit providers have failed to provide a base level of service and the customer has been adversely affected. All too often this failure is not due to lack of knowledge of correct procedures or lack of desire to help the customer; it can usually be blamed on legacy, inflexible, disjoined systems which cannot hold all the data required, cannot guide the collector through a complex, compliant process and just lax control and transparency.
Again, I am a debt collector. I expect people to pay their bills and meet their responsibilities; however, as lending institutions, we also have a responsibility to help our customers when they need assistance and to meet professional standards in the way we go about managing our collections cases. Our systems must help our collectors reach out appropriately, deliver the right message for each customer and efficiently manage their cases to drive resolution. Antiquated old systems are about to come under fire, they may not be up to the job that will be dictated once the CFPB findings are out. Lions and Tigers and Bears...they are coming for you!