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Shielding Collectors From TCPA and FDCPA Violations

  • Written by Joshua Fluegel

The demands of regulators lead collection professionals to collect debt with the credo of “as little contact with the consumer as possible.” Every eliminated encounter with a consumer while the payment is still being collected is one less chance for a TCPA or FDCPA violation. For this reason many accounts receivable departments are turning to virtual collection portals. Receivables Advisor asked collection software experts in what way virtual collection technology can help professionals avoid TCPA disputes and FDCPA violations.

The Threat of TCPA Disputes

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Matthew Hill President and CEO of The InterProse Corporation

Consumers facing virtual agent collection web portals can have a tremendous impact on an agency’s collection action resistance to TCPA and FDCPA violations. 1) Because the consumer is voluntarily logging into the virtual agent, there is little room for the consumer to have issues with the contact as long as the vehicle (letter, email, text, or voicemail drop) has been vetted for compliance. 2) With strict rules regarding the available hours initiating contact with the consumer, a virtual agent renders a TCPA/FDCPA constraint moot because of the consumer initiated action.

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Ranjan Dharmaraja CEO of Quantrax Corporation

A “threat” can be described as “...hostile action on someone in retribution for something done or not done.” In addition to sometimes being punished for things we do not perceive as being “wrong,” both TCPA disputes and FDCPA violations are moving targets. To address the challenge of a moving target, we must be able to defi ne the existing problems and anticipate what could happen tomorrow. That is no easy task. The existing challenges with TCPA disputes have been known for many years, and include calling cell phones and managing our contact strategy in a manner that does not confuse or bully the consumer. To strive for a perfect solution, we must seamlessly integrate collection technology with our collection efforts. Some would even argue that we must allow machines to take over traditional human roles, because if programmed correctly, a machine will never make a mistake. You cannot stop an agent from saying the wrong thing, but you can stop your company calling a cell phone in a predictive campaign, or calling a consumer at an “inconvenient time.” More challenging problems like counting and limiting the number of calls to a consumer or type of phone number (e.g. home, cell) for a day or a period, can only be effectively addressed with pure technology solutions. With older systems, major redesign is called for. With compliance, it may be argued that “prevention is the best cure.” We will not fi nd all of the answers in one place. We have to be proactive, practical and logical in our approach to addressing these challenges.

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Michelle Jeffers VP of Business Development of Applied Innovation

To prevent violations of both the TCPA and FDCPA, understanding of the laws is critical. Once an organization is aware of the potential risks of disputes and violations and creates policies and procedures to mitigate potential issues, they are well on their way to mitigating risk. Well-documented policies and procedures including remediation plans can make a marked difference with regulators, as well as reducing time and stress for the affected organization. Organizations can reduce TCPA risk with virtual collectors as these consumers voluntarily create accounts and set up repayment plans, thus reducing the concerns with telephone communication.

Possible FDCPA violations.

Matthew Hill President & CEO of The InterProse Corporation

1) Most virtual agent sites are sufficiently configurable to insure that they can meet the required FDCPA compliance standards.

2) Some of the more sophisticated portals have scripting tools that enable the calculation of payments, settlements or payment plan offers in real-time that eliminates arithmetic or other errors that can occur when an agent is working directly with the consumer.

3) With the use of an encrypted web portal, no live agents have to interact with a consumer's payment information and that information can remain obfuscated from the system of record and/or tokenized for secured payment plans through a payment processing integration.

Ranjan Dharmaraja CEO of Quantrax Corporation

FDCPA violations are far more complex to understand and prevent. There are many different areas to be considered. Traditionally, we have relied on agents to make sure that our companies did not break the rules. That became impossible several years ago. Think about it – we have to deal with our own standards, client requirements, as well as state and city-level rules for attempts, contacts, messages, letters, credit reporting, statute of limitations and many other areas. Once again, systemic solutions offer us the only way to address this complex problem. Many of these problems did not exist 10 years ago. Unfortunately, addressing these problems with technology does not only involve programming changes. The solutions call for some significant changes in design, which is difficult and expensive. With the computing power available to us today, practical solutions are well within our reach. Most of the popular collection systems have been around for a very long time. Their flexibility and power come from millions of line of code, built over many years of development. Major changes are a challenge, but must be undertaken. The alternative is massive spending on custom code or internal IT departments.

Michelle Jeffers VP of Business Development of Applied Innovation

The use of virtual collectors can help to reduce possible FDCPA violations in a number of ways. An example is that all the compliance can be built into the website, thus reducing the risk of collector missteps. Recurring payment notifications can be automated, restrictions on funding by client or type of debt, restrictions on accounts in bankruptcy or legal status, to name a few.