Nov 03, 2013 Philip Burgess
Recent reports have indicated that many debt collection agencies are failing to properly manage information governance and other record-keeping processes, leading to decreased efficiency and, sometimes, financial losses. Collectors need to be able to verify debts and provide debtors with a variety of other information to ensure compliance with the Fair Debt Collection Practices Act (FDCPA).
Without thorough record management policies and enforcement practices in place, agencies might be at risk of losing debts they purchased, as well as having to contend with investigations from a variety of legislative and law enforcement entities such as the Federal Trade Commission and Consumer Financial Protection Bureau. On the other hand, tight record management protocols will yield stronger efficiency and greater resilience to complaints.
Debt collection records management
From the point of a debt's purchase to its eventual reconciliation, agencies need to keep a close eye on the ebb and flow of information. When developing a records management strategy, consider some of these best practices:
- Initial acquisition: Agencies should be most focused on the original purchase of the debt and the paperwork that went into the deal. All applicable information related to the debt's origination with the primary creditor should be acquired, stored and maintained properly to ensure nothing is lost. This is especially helpful when a debtor cannot completely repay the lien for longer periods of time.
- Storage and backup: When disaster strikes and affects the primary information storage environment, critical data can be lost. Agencies should consider backing up all debtor-related information regularly to increase resilience to long term outages and data loss. Cloud computing can be helpful in this arena.
- Measurement system: The true test of a strong records management strategy is how it fares months and years down the road. Leaders will need to incorporate metrics systems to evaluate the effectiveness and efficiency of records management activity over time. These structures will also make it easier to check for vulnerabilities and patch holes in the information governance process.
- Training: Once the policies have been written and the solutions necessary to enforce them are implemented, agencies should consider training all staff members in internal and industry-recognized best practices. When employees have a strong understanding of the record management strategy, they will be better positioned to execute consistently.
Agency leaders should also remember that certain requirements of the FDCPA will need to be covered in the records management strategies.