Collection agencies are transitioning to a digital-first mindset that meets the growing needs of both consumers and creditors. They are adopting technology to reach consumers where they are most likely to respond, make payments, manage their loans, and communicate with collectors.
With this rapid adoption of technology, the ability to remain compliant with Regulation F and other rules has become increasingly difficult, putting many organizations at risk of compliance-related fines and penalties. To protect themselves, collectors have sought new solutions to improve their digital communication methods in this ever-developing industry.
One half of this digital-first shift is focused on the needs and wants of the consumer. When they’re able to use texting, email, and messaging and chat interfaces in addition to traditional phone-based communication, consumers are more likely to engage positively with collectors and make payments sooner. But if your agencies are siloing these communication paths, you risk delays in recovery and additional consumer complaints.
Multichannel vs. Omnichannel
Both multichannel and omnichannel communications are based on the same principle – consumers can communicate with you through multiple channels. Consumers are often more accessible through channels other than a phone call, and younger consumers today tend to avoid calls entirely. The difference, however, comes in how the different channels work together.
In multichannel communications, each channel is siloed, with little to no integration between them. For example, let’s say an agency is able to reach a consumer via email and they are disputing the debt. At that point, all collection activity must stop until the proof is provided to the consumer. In a multichannel process, that information isn’t transferred to any other channels. Just a few hours later, that same consumer could receive an automated call or text, putting you in violation of FDCPA regulations.
By contrast, omnichannel communications function in a more cohesive way. Each means of communication is integrated with the others and with the host system, letting the consumer pick their preferred channel(s) without continued notifications elsewhere. This helps ensure compliance and is less likely to trigger a consumer complaint.
Digital Communication Limitations
Whether by email, text, website chat, or some other channel, there are several regulations to consider before you move to a digital-first approach. Depending on the channel, these rules can require creditors and their agencies to:
- Get a consumer’s express consent to be contacted via a specific method
- Allow a consumer to revoke their express consent by whichever means they choose (phone, email, text, in person, letter, etc.)
- Confirm the phone number is still valid for the intended recipient
- Explicitly state the purpose of their communication and inform the consumer of their rights
The Telephone Consumer Protection Act (TCPA) governs communications to a consumer’s telephone, and has additional protections relating to the consumer’s cell phone. The FCC has clarified that a text message to a cell phone is considered a ‘call’ for the purposes of the TCPA; therefore, all texts must have the same consumer consent as a call to a cell phone.
For specific requirements by channel, you can review more about the CFPB and TCPA regulations online.
Digital-First Data Management
On the other side of the digital shift, there are the needs and requirements for creditors and third-party agencies. An omnichannel communications approach has shown to reduce charge-offs and increase annual revenue, but the benefits of a digital transformation go even further.
- Automation: By migrating manual processes to digital workflows, creditors and agencies can save valuable time and resources while controlling risk.
- Artificial Intelligence: AI can take the guesswork out of your contact strategy – from more effective account assignment and dissemination to identification of accounts at risk of potential default – allowing you to both optimize your efforts and simultaneously focus on the accounts that need the most hands-on approach.
- Analytics: Creditors can get more from their third-party agency relationships with unified data across their entire portfolio, using systems that can proactively monitor all accounts and automatically detect potentially risky practices.
New technologies have drastically improved communications between creditors, third-party agencies, and consumers – and when implemented correctly, they can support and optimize your compliance processes. Before you move to a digital-first approach, you should ensure any new tools or changes are actually making your collection processes more efficient, not adding further unnecessary risk. Partnering with NeuAnalytics, a platform that touts a best-in-class Compliance Management System, can provide access to industry-leading solutions to help monitor for new regulations, minimize disruptions, and reduce risk across your entire data portfolio.
NeuAnalytics—Your Partner for Maintaining Compliance in the Digital Landscape
NeuAnalytics’ unique platform is the original, most comprehensive system for compliance and risk management, with transparent, real-time ROI. Our platform has the capability to assess how your third-party vendors are functioning and then dynamically distribute accounts for increased yield and faster resolutions. With more than 15 years of experience crafting efficiencies in performance and compliance for our customers, our best-in-class system ensures that regulations across federal, state, and local levels are being complied with across your internal organization and your third-party vendors.
The digital landscape is constantly evolving to meet the growing needs of the industry and consumers alike, which is why we offer scalable solutions and services that can be customized to your organization’s operational and risk-monitoring needs. At NeuAnalytics, we combine industry-leading technology solutions with a team of seasoned experts to attack the toughest challenges creditors face today. We understand that modern challenges need modern solutions.
Take a look at our free download “Modern Compliance Challenges Require Advanced Solutions” today, and talk with one of our industry experts to see how partnering with NeuAnalytics can help significantly reduce and ultimately resolve the challenges your organization faces.