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Collection Software Helps Small Offices Remain Compliant

  • Written by Joshua Fluegel

The compliance demands of regulators continue to grow in today’s collection environment. Unfortunately the number of accounts and average amount of each is not increasing at an equal rate. This disproportion creates a great deal of strain on small collection offices. The leveraging of collection software can help reduce staff size, improve organization and keep collection efforts safe from violation.

The alphabet soup of compliance creates quite a list of requirements for collection software. Fortunately, today’s software solutions can be altered accordingly. According to CDS Software, today’s software can alert collectors that it is too early, or too late, in the day to contact a consumer to perform collection activity and automatically generate a validation notice within five days of verbal contact.

briganti carlAs valuable as the human element is to collections, the propensity for error must be limited by an agency’s software solution. “With high demand for strict compliance in today’s regulatory environment, software companies must strive to create an ARM and collections platform that engenders virtually 100% compliance by leveraging technology that limits the human factor of compliance failure,” said Carl Briganti, CEO of Collection Solution Software. “By implementing point-in-time compliance workflow technology can mitigate a breach in compliance by evaluating current account conditions at point of interaction, i.e. attorney on file, existing bankruptcy, statute of limitations or state compliance contacts being met.”

shulzeSoftware not only helps reduce error it can also act as extra helping hands to assure work flows smoothly through the day. “Collection agencies can use the new technologies to assist their compliance efforts because the software can be set so that state-of-theart processes are automated and become part of the agency’s regular workflow,” said Fritz Schulze, founder and owner of Comtech Systems. “Taking the time to create effective contact plans and other automations allows operators to work confidently, with the knowledge that the software system is safeguarding their company’s compliance.”

houstonA symbiotic relationship must be developed between an agency and the software vendor as the two are legally bound to one another in the eyes of regulators. “Software providers who are continually reviewing new regulatory requirements, performing self-audits, and implementing changes to their solutions will help keep the small office agencies in a competitive position,” said R. Fred Houston, president and CEO of Columbia Ultimate. “These smaller offices typically don’t have a lot of resources, so it is critical that their chosen software platform follow best practices and support them in staying current.”

patterson lexUnfortunately compliance cannot be achieved with the mere flick of a switch. Every aspect of the collection process must be inspected by both the collection professional and the vendor for outlying details. “The current regulatory environment is a strong force in our industry,” said Lex Patterson, president of DAKCS. “The question becomes ‘How do businesses with limited budgets and resources minimize the risk of non-compliance?’ For us, the devil is in the details. To that end, we believe in building partnerships with various compliance solutions, and creating open integration paths.”

lamagnaThe tracking of complaints, another important aspect of compliance, can also be made more manageable by collection software. “Features such as complaint management and tracking allow small offices to track, analyze and resolve concerns without additional products or interfaces,” said Tony LaMagna, partner at Debt$Net Collection Software. “Software can import description of the type of complaint from the CFPB website and identify if the customer has filed a complaint.”

hubbard margaretThe battle for compliance never seems to end as some collection professionals option to add on to or customize their software to meet changing needs. “Collection software takes on both proactive and responsive measures to meet the laws and regulations,” said Margaret Hubbard, president of Hubbard Systems. “Companies are client-driven, in order to compete in this evolving environment focused on compliance with all of the consumer financial protection laws. There are six of these laws related to debt collections, and each has in some way impacted the functionality of collections software. There are always add-ons available, such as repositories for call monitoring and complaints.”

hill matthewAs compliance is something that must be practiced and trained, software has adapted as well and helps collection professionals in this endeavor. “Compliance is a real day-today concern,” said Matthew Hill, president and CEO of The InterProse Corporation. “Developers can be instrumental in creating a working environment for their collection team that keeps them safe. Our customers typically invest thousands of dollars in training their collection team members about compliance and best practices. It would only be logical for the software, that is at core of their enterprise, to support that training and help keep the collection team members from stepping on a compliance ‘landmine’ by making sure compliance rules are an integral part of the application.”

The compliance demands of regulators have come a long way and, accordingly, so has collection software. It is part of a never-ending cycle of adjustment to which collection professionals must adhere to with the help of technology. “Remember the days when we sent the first notice on a post card,” asked Dan Hornung, president of ROYDAN? “Even though regulations are intended to improve and protect the consumer’s position, in the collection business we all know the letter of the law often has unintended consequences. The challenge for software providers is to find creative strategies that solve these regulatory challenges in a cost effective manner, one that allows the customer to compete effectively in an ever-changing business environment.”