Jun 10, 2013 Philip Burgess
The debt collection industry has become increasingly active in recent years, as consumers and businesses hold a higher volume of outstanding loans than ever before. What's more, the economic recovery, though gradual, has provided an exceptional opportunity for lenders to seek out and acquire outstanding debts from borrowers.
While many news stories have often ostracized the debt collection industry, many individuals do not understand that the majority of agencies within the industry go above and beyond the call of duty when it comes to legal compliance and customer satisfaction. Debt collectors should always adhere to the law, such as statutes under the Fair Debt Collection Practices Act, and work to build a strong brand image among clients and debtors.
Data integrity has also become a more common discussion among professionals in the industry, as well as federal officials. Debt collectors can gain a variety of advantages from the proper use of data management and analytics solutions.
Regulators move on debt data
InsideARM recently reported that the Federal Trade Commission and Consumer Financial Protection Bureau will hold a roundtable on data management this June. The event, titled "Life of a Debt: Data Integrity in Debt Collection," will be meant to enlighten participants on the best practices of information management throughout the lifecycle of accounts.
According to the news provider, the event will take place on June 6 in Washington, D.C., and will include discussions among credit issuers, regulators, academics and consumer advocates, as well as professionals from the collection industry. This is a public event that is free for all interested parties, though the FTC and CFPB require registration and RSVP to manage the number of attendees in the limited space.
The source noted that documentation volumes, verification information and the costs and benefits of consumer disclosures will be among the several topics discussed at the roundtable meeting. Debt collection professionals and executives should consider signing up for this event to learn more about what they can do to make the most of data accrued in the process of contacting debtors.
Data analytics can also unlock a variety of new strategies for collectors, especially when it comes to the tactics that have the highest returns. Though a novel practice, many in the industry have taken on data analysis strategies to reduce waste from the collection process, improve transparency among consumers and regulators, have higher success rates and much more.
Data management is not only important for strategy, but crucial to ensure that all consumer information is protected from the hands of hackers and other identity thieves. Any firm that manages financial or personal information needs to focus on creating a stringent and effective line of policies to protect privacy and maintain the integrity of stored data.
Debt collection agencies should ensure that practices are aligned with the industry-recognized safeguards and procedures related to data security and management. By creating a comprehensive information governance policy, debt collectors can capitalize on the power of data analysis while simultaneously mitigating the risks.