Shielding Collectors From TCPA and FDCPA Violations
- Written by Joshua Fluegel
- Parent Category: Software Spotlight
- Category: Collection Software Roundtables
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
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.
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.
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.
“Many software vendors have feature/ module ‘add-ons,’” said Rick Bonitzer, president of Credit Collection Partners. “Make sure you review your itemized invoice/statement every month to ensure you’re not paying for ‘addons’ you no longer use.”
“Having control on retrieving realtime performance data is critical in meeting both our needs and our clients’ needs,” said Shanahan. “FICO has a multitude of real-time performance reports that are essential to any agency’s growth. Two very important areas of data that Eastern Revenue focuses on are liquidating and unit yields. Not knowing specific client performance numbers will hinder the growth and profitability of any agency.”
Collection agents are very innovative and will often test the constraints of any collection software! The software should be configured to preclude agents in one office location from viewing or accessing accounts in another location. Floor managers and team leaders clearly do not want a collector accessing or cherry picking another office location’s accounts and working them.
The most common pitfall is to rely too much on influential “old school” personnel during a software renewal project. These personnel are valuable for their strong business expertise but they are invariably supporting and promoting the “this is the way we’ve always done things here, can’t be done differently” approach. Change is usually scary, but necessary. A software renewal project requires a strong forward-thinking business sponsor.
Having multiple offices and/or databases can lead to oversteps in one office onto another office leading to confusion and mishandling of accounts. The key to avoiding this pitfall is to have a clearly defined business plan and approach for each office. Regardless of how the business is structured, as long as each office understands the plan and follows procedures in place an agency can successfully operate with multiple offices.
Taking extra steps to maintain data hygiene will avoid the need for laborious corrections. In particular, we advise the use of a system wide unique identifier for each record.
One pitfall to avoid is thinking that your IT team can build out a better “homemade” cloud-based deployment than a dedicated cloud vendor. That may have been possible five years ago, however, today you must take full advantage of collection vendors that partner with cloud titans such as Microsoft Azure or AWS for greatest efficiencies, economies of scale, unparalleled security and protection.
A common pitfall in configuring a software solution across multiple offices is to overlook the opportunity to customize each office as its own independent environment in the ecosystem with its own customized settings, permissions and workflows in order to maximize the productivity potential of the personnel at each location. Although this may require an investment of time at inception, the uplift is significant on the long run. Customizing each site around its very specific needs is more often than not neglected in favor of using a single-template solution approach that applies to all locations missing out on the opportunity to enhance efficiencies with the more tailored approach.
Secure, responsive access from any location is important to easily manage connection and roles for security and reliability. A cloud-based model works great, but on-premise solutions should have the capability as well. Data segmentation allows you flexibility in managing trust accounts and collector workloads. Having automated tools to process accounts and report on activity from each location is vital. The ability to quickly adjust user count to accommodate operational changes prevents hold ups in your business organization’s timeline.
Utilizing technology that wasn’t designed for cloud deployments. It is possible to deploy older technology to the cloud and make it accessible from multiple offices; however, this presents challenges in security, efficiency, and flexibility. It’s true that redeploying legacy technology to the cloud can be tempting but in the long run it is far better to invest in the right tool for the job.
Agencies that work across the country need to be aware of how to handle time zones effectively. Making sure phone calls and other activities are timed appropriately to the consumer’s location is imperative given the compliance implications that this could create if handled improperly.
The largest consideration by far is to make sure that you choose a collections platform that can flexibly support all of your requirements.
Again, the question varies based on your collection software solution. For a web-based software solution, avoid the security trap. Make sure you know how your data is being stored, is it encrypted as it is sent to your software provider’s server, and is it encrypted “at rest” while it sits in your provider’s database? Make sure that multiple locations can be secured and isolated easily if needs to be and that user access can be restricted not only to features and functionality but also to allowable timeframes and working hours. Finally, make sure your software provider has adequate network, Intrusion Detection Systems (IDS) and firewall monitoring in place to ensure your data is secure. For traditional software solutions, it comes down to security as well. Make sure you have a skilled and experienced IT staff to properly configure firewalls and infrastructure hardware in order to ensure that data is being transmitted securely. Additionally, network monitoring, IDS and firewalls should be put in place and frequently monitored in order to verify that networks are secure and not compromised. An untrained IT staff is sure to miss critical security components leaving your environment compromised and costing you additional dollars in the end.
“Collection call speech analytics measures several key metrics directly relating to compliance,” said John Ripa, president and COO of Castel Communications. “They can be customized to align with specific needs of individual collection cell centers, including borrower verification, call disclosures, and payment request, among others. Tracking and acting on these metrics positively impacts the volume of debt collected.”