On July 6, Colorado Gov. Jared Polis signed into law Senate Bill 21-190, the Colorado Privacy Act.  This makes Colorado the third state, behind California and Virginia, to enact comprehensive consumer data privacy legislation.  The act becomes effective July 1, 2023.

Applicability

The Colorado Privacy Act applies to a controller that “conducts business in Colorado or produces or delivers commercial products or services that are intentionally targeted to residents of Colorado,” and:

1. Controls or processes the personal data of 100,000 or more consumers per calendar year; and/or
2. Derives revenue or receives a discount on the price of goods or services from the sale of personal data and processes or controls the personal data of 25,000 or more consumers.

Exemptions

Among other things, the act does not apply to information that is processed in compliance with the Health Insurance Portability and Accountability Act of 1996 Privacy Rule, the Fair Credit Reporting Act, or the Gramm-Leach-Bliley Act.  In fact, financial institutions and affiliates that are subject to the GLBA are themselves exempt. Data maintained for “employment records purposes” is also exempt.

Consumer Rights

The act provides consumers the right to:

1. Opt-out of the processing of their personal data if related to targeted advertising, sale of personal data or certain profiling activities;
2. Access their personal data;
3. Correct inaccurate personal data;
4. Delete personal data, in certain circumstances;
5. Obtain a copy of their personal data in a readily usable format;
6. Appeal a controller’s refusal to act on a request to exercise a right;
7. Contact the attorney general with concerns about an appeal.

Sensitive data, which includes genetic or biometric data, personal data from a child and data that reveals certain personal characteristics, cannot be processed without first obtaining consent.

Security Standards/Risk Assessment

If the processing presents a “heightened risk of harm to a consumer,” a controller must conduct and document data processing assessments that “weigh the benefits that may flow, directly and indirectly, from the processing to the controller, the consumer, other stakeholders and the public against the potential risks to the rights of the consumer associated with the processing, as mitigated by safeguards that the controller can employ to reduce the risks.”

Processing presents a “heightened risk of harm” if it is related to: 1) targeted advertising or profiling in certain circumstances; 2) selling personal data; or 3) processing sensitive data.

Preemption

The act preempts local laws that would seek to regulate the processing of personal data.

Enforcement

The act does not provide a private right of action.  If an alleged violation is not cured within 60 days of notice, the attorney general may bring an action under the Colorado Deceptive Trade Practices Act which allows for injunctive relief and civil penalties “of not more than twenty thousand dollars for each violation.”  Colo. Rev. Stat. § 6-1-112(1)(a).

Rulemaking

The state attorney general is tasked with promulgating rules related to a “universal opt-out mechanism” and may also adopt rules governing the issuance of opinion letters and interpretative guidance.

Impression

The Colorado Privacy Act is similar in many ways to the Virginia Consumer Data Protection Act by staying the course in terms of basic consumer data privacy principles while maintaining a generally industry friendly stance. For more information about state data privacy law and compliance click here.

We’ve been comprehensively covering the seesaw application of Facebook at the district court level, so I can confidently state that this is the worst post-Facebook ATDS ruling yet.

On July 8, 2021, a court in California held that Facebook is essentially irrelevant at the pleadings stage. Here’s the language:

The newly clarified definition of an ATDS is more relevant to a summary judgment motion than at the pleading stage.

You have got to be kidding me.

And the best part is that the Plaintiff didn’t even have a lawyer.

In Gross v. Gg Homes, Case No. 3:21-cv-00271-DMS-BGS, 2021 U.S. Dist. LEXIS 127596 (S.D. Cal.  July 8, 2021) the Defendant allegedly used an ATDS to send cold texts and calls to a real estate agent soliciting information about pocket listings. Defendant moved to dismiss the case arguing: i) the TCPA does not apply to business calls *eye roll*; ii) Plaintiff lacks Article III standing; iii) the ATDS allegations were insufficient after Facebook; and iv) the messages were not solicitations and so no 227(c) claim is available.

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I won’t waste time with arguments i) and ii)–the TCPA does apply to business to business calls (except under 227(c)) and Article III standing is easy to show in the Ninth Circuit (unfortunately) so both of those arguments were destined to fail, and they did.

The fourth argument–that offers to purchase services offered by a called party are not solicitations–is a better argument and the case law is split on this point. The Court went in favor of the Defendant on the 227(c) claim and dismissed it. And that’s a great win!

Unfortunately, that win is overshadowed by the monumental loss on the ATDS issue.

Backing up, everyone should know by now that Facebook requires a system to have the capacity to use a random or sequential number generator do so…. something. Obviously, if your system is randomly generating phone numbers and dialing them, you’re in trouble. But under FN7 if your system is using a random or sequential process to determine dialing sequence you may also be in trouble. Then again, at least one court has held that FN7 only applies to random lists of numbers. So that issue is in flux.

Bottom line, however, every court has acknowledged that a random and sequential number generator is a necessary component of ATDS allegations post-Facebook.

Until now.

The Gross court dispensed with a pleading requirement related to the use of a random and sequential number generator altogether. As noted above, the Court deemed Facebook to be irrelevant at the pleadings stage. In its view meager allegations related to volume and templatization of text messages suffices:

She further alleges that the ATDS Defendant used “has the capability to insert a new name for each person [to whom] it sends spam text messages” and “the capacity to store numbers and dial them automatically.”

Automatic dialing from a list triggers the TCPA? It’s Marks all over again folks.

This is why I put blast text platforms into the “yellow” category after Facebook. There is still some risk that a court is going to do something weird with respect to these systems. And now one has.

Obviously, everyone needs to keep an eye on this one. If other Courts adopt the Gross approach Facebook essentially never happened for purposes of the pleadings stage. That means 10x the cost and expense in a TCPA class action, and that’s just awful.

TAMPA, Fla. — ProVest, an industry leader in serving legal process, announced that it is now fully integrated with Vertican’s Q-LawE platform. Vertican’s software offers many benefits, namely time savings and human data entry error elimination.

“While we pride ourselves on building strong relationships, we know our clients want to save time and money, making the entire process – from service to filing – more efficient and economical,” said ProVest CEO James Ward. “Vertican Technologies has a deep understanding of the credit collections industry. This integrated software solution will help our current and future clients boost file throughput and help ensure accuracy.”

According to Vertican’s Kurt Sund, product owner and creator of Q-Law and Q-LawE, integration is an essential element to client success. “We built an extensive integration into Q-LawE with ProVest to support the entire cycle. Our goal is to automate nearly every part of the legal service process, so ProVest’s clients realize significant savings and efficiencies.” Sund said, “We estimate clients will save 45-60 minutes per lawsuit. Imagine if a firm files 2,000 suits each month, this is no less than 1,500-man-hours, easily eight or more full-time employees!”

There are numerous benefits to automation for ProVest’s clients: status requests, stop service, send billing, invoice validation, credit card reconciliation, and automated document exchange. Additionally, from an accounting perspective, the ProVest integration includes the transfer of suit and process service invoices, which flow into the case’s cost accounting ledger.

Ward said, “As we celebrate ProVest’s 30^th anniversary, we’re pleased to team with Vertican to offer our clients this automated and integrated solution. The benefits are numerous and will help our clients save time and money on every case. Technology adoption is greatly enhancing our industry’s future.”

About ProVest LLC

Founded in 1991, in Tampa, Florida, ProVest plays a critical role by ensuring that defendants in a legal action have been properly served process, thus helping to protect their constitutional rights. ProVest specializes in managing the service of process related to creditors’ rights and mortgage defaults. ProVest annually serves millions of documents for the U.S.’s most notable law firms, financial institutions, and insurance companies. Learn more at provest.com.

About Vertican Technologies

Vertican Technologies provides the collection industry with best-in-class technology, making operations more efficient, compliant, and profitable. Solutions include Q-LawE, vExchange®, Collection-Master, and vMedia. With over 40 years of experience, Vertican’s knowledgeable staff and comprehensive software packages automate and streamline collections. Visit www.vertican.com to learn more.

For more information, please contact Joel Rosenthal at Joel.Rosenthal@ProVest.us.

ST. PAUL, Minn. — IC System is pleased to announce that Jessica Amundsen has joined the company as Vice President of Business Development – Healthcare. Jessica will grow IC System’s nationwide presence in the healthcare industry, focusing on the southwest region from her home in Texas. 

Jessica comes to the role with over 15 years of experience in the healthcare industry and expertise in revenue cycle management. Her career started in 2006 with HealthTexas Provider Network, where she excelled in coding and billing before becoming a Revenue Cycle Trainer and Manager of Practice Operations. 

Jessica’s most recent role focused on accounts receivable, revenue cycle, and contact center solutions at a Texas company. Serving as Revenue Cycle Director and then Director of Business Development – Healthcare, Jessica was responsible for developing the healthcare business, finding solutions for the self-pay healthcare team, and sharing her industry knowledge as a subject matter expert.

As a thought leader, Jessica’s education and experience place her at the forefront of healthcare revenue cycle solutions. She holds a master’s degree in Business Administration & Healthcare Management. She has also given educational revenue cycle webinars, authored blogs, and attended conferences to ensure she has the best solution for the healthcare industry’s needs. 

Karen Jonas, IC System’s Senior Vice President of Business Development, welcomed Jessica to the team: “IC System couldn’t be luckier than to have someone of Jessica’s knowledge and background helping to expand our presence in and around Texas. We’re looking forward to seeing what Jessica brings to the table, and given her experience, the results are bound to impress.” 

About IC System

IC System is one of the largest receivables management companies in the United States. Founded in 1938, IC System is a privately held accounts receivable management firm in its third generation of family ownership. IC System provides customized, tailor-made debt recovery solutions for the healthcare, dental, small business, government, utility, retail, financial services, and telecommunications industries nationwide. Follow IC System on Twitter at @icsystem or on LinkedIn.

LOCKPORT, N.Y. — Spire Recovery Solutions, a professional accounts receivable collection agency, made a recent donation to FeedMore WNY, a charitable nonprofit organization dedicated to ending hunger in the Western New York area. The organization is the primary nonprofit food provider in the region and includes both Meals on Wheels and Food Pantry services. 

“FeedMore WNY is an awesome organization. They’re efficient in what they do and the impact is expansive. They have a 4-star rating from Charity Navigator and a great reputation here in our area, so it’s nice knowing that the donation will go to excellent use. The main warehouse is in Buffalo but the services extend here in Niagara County and throughout the Western New York region. Both the Meals on Wheels and the Food Pantry aspects of the organization fill a huge need in the aging community in particular, which of course includes veterans. We always try to make sure we’re considering veterans and our local community at large, so we’re happy to be able to support this worthy organization,” shared Joseph Torriere, President of Spire Recovery Solutions. 

FeedMore WNY was created in 2019 when Meals on Wheels for Western New York and the Food Bank of Western New York combined to create a greater impact. The individual organizations had already been feeding their community for a combined total of over 90 years. The Meals on Wheels program delivers meals to homebound seniors. Volunteers take turns delivering meals Monday through Friday to individual homes as well as congregate dining centers. This provides a point of needed social contact for meal recipients as well. FeedMore WNY took this a step further to also include delivery of pet food for companion pets when possible. During the pandemic, in particular, many isolated homebound seniors have relied on their pets as their only source of companionship. 

The Food Pantry portion of FeedMore WNY serves a wide swath of community members in need by growing food, collecting food donations, purchasing food with monetary donations, and storing food inventory in dedicated temperature-controlled warehouses. Inventory can be purchased in bulk at highly reduced rates and delivered to organizations such as children and adult daycare centers, hospitals, schools, nursing homes, retirement centers, and more. The Food Pantry is wide-reaching and works to fill food and nutrition gaps for all ages to help end hunger in the community. 

For more information about FeedMore WNY, please visit FeedMoreWNY.org. For more information about Meals on Wheels or food pantries in your area, please visit MealsOnWheelsAmerica.org or FeedingAmerica.org.

About FeedMore WNY

FeedMore WNY is an independent, nonprofit 501(c)(3) organization dedicated to offering dignity, hope, and a brighter future by providing nutritious food, friendship, and skills training to its Western New York neighbors in need. The organization was formed as a merger of the Food Bank of WNY and Meals on Wheels for Western New York. By coming together, the community reach, resources, and impact were increased to feed more community members of all ages throughout Cattaraugus, Chautauqua, Erie, and Niagara counties. 

About Spire Recovery Solutions

Spire Recovery Solutions, LLC was founded by U.S. Veterans Joseph Torriere and Jacob Torriere. Spire is located in Lockport, NY, is a professional, nationally licensed full-service debt collection agency that assists creditors in the recovery of outstanding balances while providing consumers with exceptional customer service. Their company’s customized processes and state-of-the-art technology provide transparency and compliance that clients and consumers trust and rely on while working together toward account resolution.

ROCKVILLE, Md. — Women in Consumer Finance and The iA Institute are proud to announce the 2021 Women in Consumer Finance Mentorship Program. The program will help women in financial services start new mentoring relationships this year. 

Applications for mentors and mentees are due by September 15th. Any woman in financial services is eligible. There is no cost to participate and attendance at the conference is not required, but it is encouraged. (Find out more about Women in Consumer Finance 2021.) 

“As I think back on my career, I realize that nobody ever really took me under their wing,” said iA CEO and Women in Consumer Finance Chair Stephanie Eidelman. “Although I’ve achieved success, I can’t help but wonder how it might have been different if I had a stronger hand guiding me along the way. That’s why I am thrilled to announce the WCF Mentorship Program. It will help female professionals in consumer finance find a guide, a real champion, someone who can help them focus on specific goals or outcomes that lead to professional growth. And we want to give professionals who have established careers the chance to be that guide and champion.”

The program will match mentor and mentee applicants based on need, interest, and compatibility. Once matches have been set, the program will introduce the mentorship pairs and provide agendas and materials participants can use to kick-start a new mentoring relationship. Women in Consumer Finance will also recognize the program and its participants at the event (December 6-8 in Scottsdale and December 13-15 online). 

The Women in Consumer Finance Mentorship Program is generously supported by RedKnot Third-Party Risk Solutions. 

Carol Pittman, CEO of RedKnot, added: “The Mentor and Mentee relationship brings the perfect balance of personal discovery through guided interactions with one’s experienced mentor, and accountability for action towards growth. It’s a unique opportunity to learn about yourself in a nurturing and confidential environment. I am grateful to have both perspectives and continue to derive value from what I learned in a variety of settings.”

Learn more about the program, sign up for updates, and apply to be a mentor or a mentee here. 

On June 2, 2021, Nevada enacted a new law regarding medical collections (SB 248), which went into effect July 1, 2021, and, to put it nicely, left much to be desired in terms of clarity. In an effort to better understand the enigma that is SB 248, the Consumer Relations Consortium (CRC) sent nine questions to the Nevada Financial Institutions Division (NFID) and received responses on June 25, 2021.

The questions and responses are shown below in their entirety. While useful, it is important to note that these responses are not official interpretations.

Questions and Answers:

CRC Question #1: What does “taking any action to collect a medical debt” mean? It is not defined, yet it appears in multiple places and impacts various concepts in SB 248.  

NFID Response: Any action would include any communication via telephone or mail, not initiated by the medical debtor, reporting to credit reporting agencies any part of the collection process. An agency cannot communicate with a medical debtor orally or in writing until the notification letter required by SB248 is sent. The process would be: you are assigned the debt, you mail out the notice required by SB248, you must wait 60 days, and then you can proceed to attempt to collect the debt as you normally would and in compliance with all other provisions in SB248, NRS and NAC 649, and FDCPA.

CRC Question #2: Consumers often have questions about medical bills and will likely call the collection agency to get answers. Is responding to a medical debtor’s non-payment-related inquires, such as billing, service, or insurance questions, during the 60-day notice period “taking an action to collect a medical debt”? How should an agency respond if asked about what happens after the 60-day period? If an agency intends to begin collections and/or credit reporting after the 60-day notice period, is it permitted for the agency to explain that to the consumer? Must they instead refuse to discuss what happens after as that may be interpreted as “action to collect?”

NFID Response: A debtor may initiate the contact for validation and/or to make voluntary payment or to ask questions. All provisions of SB248 applies including any disclosures required.

CRC Question #3: The mini-Miranda is a required disclosure under the Fair Debt Collection Practices Act (FDCPA) and provides debtors with important information. Is providing the mini-Miranda in the 60-day notice letter “taking an action to collect a medical debt”? Are collection agencies permitted to include the mini-Miranda in the 60-day notice? Can they recite it on telephone calls during the 60-day window (as required by the FDCPA)?

NFID Response: The FDCPA language and SB248 language may be combined in the 60-day notification letter. Suggested language for the letter, in addition to the requirements in SB248 and FDCPA:

“This is a notification that ABC Collection Company will not take any actions to collect this debt within 60 days from the date of this letter. Any payments made toward the debt during this timeframe are considered voluntary and will not void the 60-day notification period described above.

We will take no other action to collect this debt until 60 days from the date of this letter”

All notifications to Nevada consumers need approval from NFID.

CRC Question #4: Can the 60-day notice include the validation notice required by 15 USCA §1692g of the FDCPA, which requires disclosures to be sent within the initial communication about a debt, or within five days of the initial communication? If not, is the 60-day notice not considered an action to collect a debt?  How can a debt collection agency reconcile federal requirements with the requirements of SB 248

NFID Response: SB248 does not replace FDCPA. SB248 is in addition to FDCPA.  The FDCPA language and SB248 language may be combined in the 60-day notification letter.

CRC Question #5: Can the 60-day notice be included in the new Model Notice published by the CFPB in Regulation F, which goes into effect on November 30, 2021?

NFID Response: yes

CRC Question #6: What should a collection agency do if a voluntary payment is mailed during the 60-day notice period? Must the disclosures of Section 7.5 be provided via letter? Can the agency call the debtor to provide those disclosures? If so, how long must a collection agency wait before depositing a payment? 

NFID Response: A medical debtor may make a voluntary payment.  SB248 must be complied with regarding the disclosures. Suggestion to add SB248 voluntary payment verbiage on the agency’s website and to mail a letter confirming receipt of a voluntary payment with the required language and the required disclosures.

CRC Question #7: May a debt collection agency that will not report the medical debt to a credit bureau comply with Section 7.5 by stating that the debt will not be reported or omitting that disclosure instead of saying the debt “will not be reported to any credit reporting agency during the 60-day notification period”? 

NFID Response: Pursuant to Section 8.5, the protections set forth in sections 7, 7.5 and 8 of SB248 are for the benefit of medical debtors and cannot be waived. The disclosure must be made to the debtor.   Suggested language:

“Pursuant to NRS 649, medical debt cannot be reported until 60 days from the date of the letter. However, ABC Collection agency does not report to credit reporting agencies.”

CRC Question #8: Does this Law apply only to accounts placed after July 1, 2021, with letters sent on or after the effective date? Is an agency required to send a 60-day notice for accounts that were placed and worked prior to the effective date?

NFID Response: SB248 becomes effective July 1, 2021. NFID cannot provide legal advice, however, NFID will not enforce SB248 on accounts that existed prior to the effective date.

CRC Question #9: If a debtor disputes the debt or requests validation within the first thirty days, the FDCPA requires an agency to provide validation before resuming collections. Can the agency provide the validation within the first sixty days, or should they wait until after the notice period has expired before validating? 

NFID Response: SB248 does not replace FDCPA. SB248 is in addition to FDCPA.  If the medical debtor initiated the communication, the validation can be mailed

insideARM Perspective:

Although multiple parties filed a lawsuit to stop the law from going into effect, the court won’t weigh in on the suit until late July. Therefore, as it stands right now, collection agencies have the unpleasant task of figuring out just how to comply with SB 248’s nebulous requirements. While the responses from NFID may be helpful, it is essential to note that these responses are not official interpretations and should not be considered part of the law. Any collection agency or other accounts receivable industry collecting Nevada medical debt should pay serious attention to their compliance efforts in Nevada. SB 248 will require updates to numerous policies, procedures, and training. Since SB 248 is ambiguous and conflicts with other laws, entities subject to SB 248 should ensure that any updates to internal protocols are captured in a policy and procedure. We will keep you up to date on the progress of the pending lawsuit.

About the Consumer Relations Consortium

The Consumer Relations Consortium (CRC) is a membership group for forward-thinking organizations that wish to influence the direction of collections compliance, legal strategy, and regulatory policy. The CRC is comprised of more than 60 national companies representing the diverse ecosystem of debt collection including creditors, data/technology providers, and compliance-oriented debt collectors that are larger market participants. Established in 2013, CRC is evolving the debt collection paradigm by engaging stakeholders—including consumer advocates, Federal and State regulators, academic and industry thought leaders, creditors, and debt collectors—and challenging them to move beyond talking points and focus on fashioning real-world solutions that actually improve the consumer experience. CRC is managed by The iA Institute. 

Learn more at www.crconsortium.org.

About the iA institute

The iA Institute is a media company that provides news, education, events and connection for professionals in consumer finance. The iA team believes the value of your time and investment in our content should be undeniable, so we thoughtfully design everything we do with a focus on the details that make a difference. Our initiatives include the flagship website and newsletter insideARM; the Consumer Relations Consortium (CRC) and iA Innovation Council membership groups; the iA Research Assistant and Case Law Tracker premium subscriptions; the iA Strategy & Tech digital conference; and the uniquely engaging annual Women in Consumer Finance event. iA is a certified Woman-Owned business.

Learn more at www.theiainstitute.com. 

They say every cloud has a silver lining, and it appears the chaos caused by the Covid-19 pandemic is no exception. While March and April of 2020 were difficult for accounts receivable entities as they figured out how to deploy employees remotely while maintaining compliance with security and operational standards, it appears these efforts and how collection entities conducted themselves during the pandemic were not in vain.

Judging by recent regulations and orders, it seems at least some states recognized that allowing collection agents of properly licensed agencies to work from home did not result in any doomsday predictions coming to fruition. In January, Maryland issued guidance that will ultimately allow collectors to work from home post-pandemic, and in recent weeks Connecticut and Minnesota have followed suit.

Connecticut:

On July 1, 2021, Connecticut Banking Commissioner Jorge L Perez (Commissioner) signed an Order allowing employees of certain licensed entities, including consumer collection agencies, to work remotely (i.e., from home) so long as security standards and other requirements are in place. Interestingly, the Order began by noting that Connecticut has allowed certain employees of licensees to work from home since March 2020 to mitigate the spread of Covid-19 and expressly states that the Commissioner wishes to extend the ability to work from home. The order went into effect immediately on July 1, 2021, and will remain in effect until modified, superseded, or vacated. 

Minnesota:

On June 26, 2021, Minnesota Governor Tim Walz signed the Commerce and Energy Omnibus Bill (Bill), which included various topics. Relative to the accounts receivable industry, Article 7, Section 4 of the Bill, allows an employee of a licensed collection agency to work from a location other than the licensee’s business location (i.e., from home) if both the licensee and the employee comply with other applicable laws. The provision expires on May 31, 2022, and will need to be enacted again to remain effective.

Additionally, relative to debt buying, Article 5, Section 7 imposes a licensing requirement on debt buyers. Debt buyers will need to submit a license application by January 1, 2022. A debt buyer who has filed an application with the appropriate commissioner before January 1, 2022, may continue to operate without a license until the commissioner approves or denies the application.

insideARM Perspective:

Allowing collection agencies to work from home is good for the industry, the workforce in general, and consumers. Agencies can hire from a larger pool of people, which will enable them to bring on board those best suited to compliant collections, instead of only those within a specific geographic area. From a workforce perspective, allowing employees to work from home increases employment opportunities for those unable to travel from their home due to physical limitations, childcare, elder care, or other circumstances. Allowing employees to work from home is good for consumers because it reduces turnover, which results in consumers communicating with better seasoned and better-trained collectors.

All of that said, it’s important to note that new regulations, even when they are regulations that are good for the industry and consumers alike, require planning, processes, training, and implementation. Not all states will allow collection agents to work from home, and so far, this seems like the exception, not the rule.  Therefore, if multi-state accounts receivable entities plan on allowing collection agents to work from home, significant compliance hurdles will need to be overcome.  Agencies will need to develop processes that segment out accounts that may be worked remotely, establish protocols to ensure no other accounts go to remote agents, develop auditing procedures, and implement robust training programs for remote collectors. Receiving allowances like this from state regulators is terrific, but like everything else, accounts receivable entities should take the time to do it right; one or two bad scenarios could cause this freedom to evaporate very quickly.

The Consumer Financial Protection Bureau’s new Regulation F is set to transform traditional collections practices. While the regulation may not go into effect until January 2022, its intent and impact is already clear.

Regulation F is being put in place to prevent the cumulative amount of outbound contact via phone calls, SMS, and email from reaching harassing, oppressive or abusive levels. From the Bureau’s perspective, the total volume of contact attempts matters. Collectors can still send SMS and email messages with consent, but may not place more than seven calls to a consumer within seven consecutive days or call a consumer seven days after speaking with them. This so-called “seven-in-seven rule” is driving many companies to enhance their digital communication strategies.

The Switch to Digital

Strategic communication via digital channels enables more efficient interactions in many situations and can also increase the effectiveness of phone communications. For example, sending a text or an email alerting an individual that you will be calling at a certain time makes it more likely that the person will trust the communication and respond.

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Consumer demographics also support collectors’ growing emphasis on digital communications, as the generations that are most likely to have debt and miss payments are the younger generations who prefer digital outreach.

Between 2016 and 2019, baby boomers and members of the silent generation, who generally prefer phone calls, have decreased their debt, while members of Generation X, who tend to prefer email, took on nearly $12,000 more debt over the same time period, a 10% increase. Millennials, who usually prefer texting for preliminary matters, took on more than $16,000 more debt, a 29% increase. Since 2003, more millennials have transitioned into serious delinquency (90-plus days past due) than any other generation.

Of course, digital communication still involves challenges. Regulation F requires companies engaging in digital outreach to offer a reasonable and simple way for consumers to opt out, increasing the likelihood that they will do so. Mobile carriers are also raising barriers: one major carrier has banned collections text messages from its network, and another has installed software on its smartphones that targets debt collection messages. In addition, collectors who contact the incorrect person (due to inaccurate contact information in the company’s database, for example) or contact an individual via their work email without their consent risk compliance violations, third-party disclosure and lawsuits.  

But despite these challenges, text and email, when used strategically, are well positioned to become increasingly valuable means of reaching out to consumers, especially considering the impact of Regulation F on the voice channel.

An opportunity to increase effectiveness

Today, Regulation F looms in front of collectors as a hurdle. But perhaps it can instead be regarded as a stepping-stone toward greater operational efficiency for the industry and greater effectiveness in helping consumers move past economic hardship.

Regulation F’s call limits increase the value of every contact attempt and encourage collectors to prioritize the accuracy of their information. This emphasis on precision is leading forward-thinking collectors to embrace data-driven omnichannel contact strategies. Operationalizing digital channels to complement the phone channel enables collectors to not only reduce compliance-related risk but increase the efficiency and effectiveness of their outbound communications.

With more data and better decisioning tools, collectors are now able to consider the best outreach strategy not only for each generation but for each individual. In addition to directly soliciting consumer communication preferences as part of the consent process, companies are using phone behavior intelligence and other contact intelligence technologies to identify the best day of the week and time of day to call, to confirm which of an individual’s phone numbers is used most (high-usage phones have right-party contact rates that are 15 times higher than low-usage phones), and to ensure that the email address on file is one the person is actually using.

How to thrive in a Reg F environment

To be successful in the new regulatory environment, many collectors will need to adapt their outbound communications strategies. Here are three key measures to focus on:

1. Keeping consumer information up to date

Consumer data changes constantly, and people experiencing economic hardship may be even more likely to move or change phone plans. Regularly integrating changes to consumer information is critical to avoid wasting tightly rationed calls on incorrect or unused phone number

2. Correcting mistaken call blocking and spam-mislabeling

Blocked calls count toward the seven-call limit per week, so collectors must make sure that their outbound numbers are included in an authoritative list of registered business numbers and that their systems are able to quickly identify if calls are being blocked or mislabeled so the issue can be mitigated.

3.  Knowing the best channel to use and when to use it

Contact precision may still involve making multiple contact attempts in a single day, but these attempts should be made through the individual’s preferred channels and at times when they are most likely to respond. This intelligence exponentially increases right-party contact rates and decreases operational costs.

Investing in an intelligent omnichannel approach

As Regulation F shifts collectors’ emphasis from quantity to quality of outreach, an intelligent omnichannel approach that responds to consumers’ preferences can support compliance while increasing right-party contact rates, reducing operational costs and increasing efficiency. Companies that invest in making every call, text and email count will find themselves set up for success in the long run.

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iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2021 members include:

FOLSOM, Calif. — AgreeYa Solutions, a leader in software, solutions, and services, today announced the launch of CogentCollect – a web-based solution that enables firms and agencies to leverage remote working. Engineered as an anytime-anywhere collection management and automation solution, CogentCollect enables firms to gain big savings on infrastructure and manpower costs, while improving collections, optimizing operations, and ensuring compliance.

Unlike its predecessor, Cogent, which was designed as an on-premise solution for large firms to manage every aspect of their accounts receivable collections under one roof, CogentCollect was specifically created to focus on managing collections and associated business fully online from anywhere. It also decouples functionalities and features that relate to the legal aspects of collections and account receivables — such as litigation, judgment, bankruptcy, and more.

“Some of the key challenges collections agencies face amid the pandemic include higher operational costs due to challenges with IT infrastructure management; difficulty integrating and scaling tech solutions; and ensuring efficient enablement and management of remote workforces – all while still maintaining complete security and compliance,” said Ajay Kaul, managing partner of AgreeYa Solutions. “CogentCollect integrates seamlessly with third-party vendors and clients to allow for easy data flow and system integration. Additionally, its workflow design supports the ability to scale by swiftly addressing evolving business needs without the need to write a single line of code – ultimately enabling financial savings and concurrently lowering operational costs.”

CogentCollect’s key benefits and features include the following:

• Infra Independence – As a web-based online solution, CogentCollect eliminates the headaches, costs, and limitations of on-premise deployments. It enables firms and agencies to leverage remote working and save on infrastructure and manpower costs.

• Collection Automation – CogentCollect automates the most time-consuming daily collections tasks and activities, empowering employees to remain focused on strategy and customer interactions.

• Future Proof Design – Modular and workflow design enables firms to enrich and scale the product to meet changing business needs, use cases, and requirements without coding.

• Solid Compliance – A built-in rules engine guarantees adherence with evolving federal and state compliance requirements, eliminating compliance costs and penalties.

• Easy Integration – Built on a scalable and open architecture, CogentCollect integrates with popular third-party vendors, like dialers, call recording software, accounting, payment solutions, and more, to increase efficiency.

• Modern and Intuitive – Manage accounts and collections from one screen. CogentCollect features a single-window interface for consumer information management, account status management, and payment scheduling.

To learn more about CogentCollect, visit: https://cogentcollections.com/cogentcollect/

About AgreeYa Solutions:

AgreeYa Solutions is a global systems integrator delivering technology-enabled business solutions to small, medium, and global Fortune 1,000 organizations. It leverages leading-edge technology, consulting, and outsourcing services to boost customer efficiency, productivity and deliver a competitive advantage. Through its consultative approach and utilization of a global delivery model, AgreeYa provides software, services, and solutions that are cost-effective, achieve results, and transform businesses. Founded in 1999 and headquartered in Folsom, Calif., with a global footprint, AgreeYa is an SEI CMMI- and ISO 9001:2015-certified Microsoft Gold Partner, with multiple certifications, and operations with a team of over 1,800 employees across the world. Its extensive software portfolio includes AgreeYa Chatbot, BeatBlip, QuickApps, Site Administrator, Recovery Manager and Cogent. AgreeYa is a staffing industry leader, providing full-service staffing solutions to meet client workforce needs while driving business value. It also recently introduced a new intelligent automation and digital transformation suite to its existing technology stack to help organizations combat future crises and venture into the digital-first world with confidence. For more information, visit www.agreeya.com and follow AgreeYa on social media @agreeyasolutions.