If you own a collection agency, you know the regulations are no laughing matter. The Consumer Financial Protection Bureau (CFPB) oversees the handling of all collection-related businesses, specifically for collections under the Fair Debt Collection Practices Act (FDCPA). According to a Kaulkin Ginsberg report in 2020, debt collection firms recovered $102.6 billion in debt, with a recovery rate of 11.1 percent of value. Some aspects of your business can be done a little more ad-hoc, but when it comes to compliance-related areas, that is not an option. You must have documented practices and procedures that cover you and the company in case of legal action.
When was the last time you audited your compliance management solution?
What is Compliance Management Solutions?
A compliance management solution encompasses compliance management software, as required by the CFPB, which follows industry standards and internal policies but is constantly growing and changing to meet current needs. Unfortunately, some believe that if you use compliance management software (CMS), that’s all you need to do to stay compliant, but that is not the case. A CMS is a tool and is only a tool unless surrounded by practices and policies to make that tool effective.
Critical Components of Compliance Management
You can think of compliance management as a living organism; it needs to be tended to, learned about, strategized on how to protect itself, and grown to be the most resilient it can be. Some critical components of a compliance management solution should take precedence when developing or honing your compliance organism.
Establish Compliance Responsibilities
Every position in your organization is responsible for various aspects of the overall compliance of the business. You are correct if that sounds vague and borderline unhelpful, but we are just establishing a baseline. Compliance does not draw a line in the sand and say, “If you don’t speak with the customer, you are free from the compliance concerns associated with collection agencies.”
The company is responsible for all members to adhere to the rules and regulations around compliance. You have options:
- Is compliance a separate department?
- Is every manager the first line of defense?
- Do frontline employees need to report compliance concerns?
- Does quality assurance play a role in compliance?
That’s a trick question, all the above.
Communicate Responsibilities to Employees
You must create transparent reporting layers to avoid confusion about what someone needs to do and when. This is not a “choose your own adventure book” from your childhood. By creating a detailed “if this, then that” scenario system, you can give your employees easy-to-follow guidelines on their responsibilities.
Policy and Procedures Legal Requirement
If policy changes are made, signable acknowledgments, which would be handled within the CMS, must be done as quickly as possible. Since you are dealing with sensitive financial matters, documenting information that is shared and accessible after the fact will be vital. Don’t leave your employees in the dark about policies; bake it into ongoing training and shared lessons.
Operational Reviews and Corrective Actions
In recent years, the widely accepted abilities of speech analytics software have increased the ability to review and adjust employees when possible issues arise. Vaspian has pioneered advancements in the speech analytics space directly related to collection agencies. Now, you can tag any alarming words, phrases, tone, etc., to ensure your agents are always at the top of their game.
Be Prepared with Detailed Compliance Management Solutions
In your debt collection business, assuming anything related to compliance would be wholly unwise. Build a compliance management solution that not only protects you but ensures customer protection as well.
Vaspian has created a juggernaut for collection agencies with speech analytics software. Couple our solution with your compliance framework to create an unstoppable data powerhouse. Contact us today for more information on creating a solution that fits your needs.