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New Year's resolutions for debt collectors

Dec 28, 2012 Philip Burgess

New Year's resolutions for debt collectors

At the end of the last financial quarter of 2012, debt collectors around the United States are making lists and checking them twice when it comes to financial planning and compliance. The new year will bring new oversight by federal agents regarding collection and loan practices, aimed at ensuring consumer privacy and fair collections, so new policies have to be established as to data handling and legal responsibilities. Further resolutions might include the adoption of new technology such as cloud computing, mobile payments and collection software. There may be big changes on the horizon for debt collection agencies in 2013, but the right preparation can make the transition seamless.

Oversight


The United States Consumer Financial Protection Bureau (CFPB) will begin oversight of the collection industry on January 2, 2013, and these enforcements will focus on fairness of disclosure, data accuracy, dispute resolution and professional conduct. Growing debt from student loans and credit cards have become major sources of revenue for collectors, and these regulations may extend to these areas more fully in the coming year as part of government efforts to resolve the fiscal cliff.

Firms might want to seek out legal counsel to ensure protection, while implementing a plan for conduct, disclosure, accuracy and security. A leadership team should focus on interactions with federal agents and ensure that every measure is properly addressed. Expanded federal involvement might be a warning sign to some, but better oversight could serve to improve the public image of the industry and ensure that consumers feel that they are partners, not targets.

Technology
New advances in technology can help collectors better track down individuals, receive transactions and mobilize agents. New software with improved skip tracing capabilities is on the market and expanded databases have access to more cell phone numbers than ever before. Accuracy of information is dependent upon this data and as such, it may be a worthy investment.

Mobile and electronic payments serve customers by allowing them to finalize transactions from any location. Offering recurring bill pay plans may be a good way to help individuals get back on track with delinquent accounts. Bringing consumers' needs to the forefront will help reflect an environment of professionalism and might lead to more successful collections. Payments can be simplified with cloud computing, which allows full integration of multiple platforms such as laptops and smartphones, so payments can be accepted from a variety of devices. This allows access to cloud documents and databases, which is indispensable for field agents attempting to make collections or attending legal proceedings. Preparation and budgeting will give collectors the tools and protection necessary to increase recovery in the new year.