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Turning the Camera on Collection Agencies

A recent ABC World News program on debt collection robocalls added fuel to an already intense firestorm involving collection tactics, complaints, lawsuits, and purported mobile phone abuses.

While the program focused on the victims of auto-dial errors and abuse, it was noteworthy for another reason. Included were interview snippets with Diversified Consultants, Inc. (DCI) COO Gordon Beck (whose organization made some of the erroneous calls), which provided many viewers with their first look inside a collection agency. So while the tone of the episode was meant to call out the debt collection techniques that were helping generate a slew of TCPA lawsuits, the few seconds of live agency action were probably revelatory to many consumers.

While one can envision DCI “putting its best face on” for the camera, the reality is that the office itself looks a lot, well, like a nicely furnished, fully staffed customer service operation. Beck’s statement that “we train every day – to just be nice” may sound outrageous to some (based on DCI’s raison d'être for being in business) but it comes off as straightforward. After all, in a highly litigious collections environment, the heavy-handed tactics of the past must ultimately be replaced by more effective, consumer-driven collection methods, as noted in FICO’s latest infographic. Of course, there will always be debt collection “bad guys,” but the ability for call recipients to record these calls will help ensure that such abuses continue to diminish in numbers over time.

Pressure on agencies like DCI will continue to intensify as regulatory reform debates and lawsuits rage on. Banks, healthcare providers, and other organizations that outplace debt can benefit from data about agency performance that just wasn’t available years ago, and the availability of information such as complaint databases (that can identify which agencies are receiving the most complaints) can help reduce outplacement risk. Still, regulatory guidance, such as OCC Bulletin 2013-29, calls for more aggressive, transparent third-party risk management and oversight. This means that while performance is still a driving factor in placement strategies, first parties need the ability to track agencies on a daily basis, using innovative technologies that help automate the process – and that doesn’t include installing a camera to monitor them on a 7x24 basis!

Interested in learning more about placement strategies? Check out our new white paper, Rethinking Debt Placement: Four Principles to Drive Compliance and Performance.

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