What you'll learn: The Regulation F implementation deadline has passed and guess what? It's time for collection agencies to turn their focus back to their digital collections strategy. Read on for a quick guide to digital debt collections strategy key trends, best practices for a successful post-Reg F digital approach, and what collection agencies should be thinking about in early 2022.
Implementing Regulation F was a huge project for collections agencies and it compelled many of them to put digital collections strategic plans on hold. Many (most?) in the collections world instead took a triaged approach to Reg F implementations, prioritizing compliance with the Model Validation Notice and 7x7x7. If agencies were not already focused on digital collections, the end of 2021 was not the time to start.
But now that we have a little bit of space from the effective date, where should agencies be focused?
Preferred Communication Channels
Remember, consent says can. Preference says should.
Now that we’ve all (hopefully) implemented a solution to deal with tracking consent, it’s time to tackle the finer details of preference, so you can build an effective digital strategy.
The CFPB put the consumer in charge. Like it or not, agencies will have to adapt to customer-centric collections practices. This means providing more communication channels at more convenient times, frictionless online solutions (like a really good customer, not just payment, portal), and the ability to communicate with the consumer in the way they prefer. This doesn’t just include the ability to send out mass SMS and email campaigns, though that is an effective way of reaching consumers. It also means offering two-way communication via those methods.
Preferred Communication Times
Restricting the number of outbound calls on an account isn't new, and neither was preferred time and place of contact. It existed in the FDCPA, but Regulation F gave it new life.
This new focus on time and place preference was a challenge for many agencies, which may have led to the decision to mark any accounts with preference for time or place as do not call or cease and desist. We’ve talked about how that’s not really a long term solution to this problem.
It’s time to really focus on time preference and what it means to your strategy. Giving up on consumers because their time preference is too complicated is simply not a valid option.
Regulation F provides guidance for how third party debt collectors could use multiple channels to reach consumers, which led to agencies working to integrate SMS, email, and other digital collections communication channels into their strategy. But are those channels truly optimized for a holistic approach to collections? Really focusing on channel optimization requires a vision for how your communication methods should work together to bring an account to a resolution.
Here's a good checklist:
- Evaluate your core system to determine what you would need to do in order to effectively track, manage, and strategize using the data points required for preferred time and communication method. Remember: a
- Explore vendors that offer outbound SMS and email (if you aren’t doing this already), then explore vendors who offer
- Think about how your
. Stop treating consumers like an anonymous account in a portfolio, and start focusing on what consumers want. Meeting them where they want to be met is the ultimate strategy. Keep this tenet in mind every step of the way.
Erin Kerr is the Director of Content for iA Strategy & Tech - a digital resource for collections strategy executives - and the Executive Director of the iA Innovation Council. She is a seasoned receivables management professional, with recent experience in digital strategy and a passion for crafting digital solutions for a better customer experience.