Since the Consumer Financial Protection Bureau was formed in 2011, there has been a near continuous discussion as to their potential impact on the accounts receivable management industry. Over the past several months the CFPB’s presence has been steadily increasing through onsite audits and multiple publications for the general public(prohibited debt collection practices and setting strict guidelines on how debt collectors may reference a consumer’s credit report). Focusing on the largest organizations within the industry first, one could say while the CFPB is the acting sheriff, they’ve indirectly made the creditors their deputies.

All firms under the supervision of CFPB have been speculating and scrambling to prepare themselves for their eventual audit. Creditors have been especially keen to partnering with only firms and agencies who they feel can meet the CFPB standards. While speculating as to the exact application of the CFPB Examination Guide, the “deputies” have continued to raise the “compliance bar”, asking for more and more controls of their partners. This while increasing their audit cycles to multiple times per year.

The collection industry has indeed changed, and some firms will find it hard, if not impossible, to survive. Indeed, smaller companies may simply lack the capital necessary to meet the required compliance standards. The investments required for the necessary Information security controls is just the start. Long term, each firm has to invest exponentially more in the creation and management of their own policies, standards, and operating procedures. Then they get to invest in building out a full time audit and compliance department to watch over those systems. Some firms will simply be unable to keep up. The surviving organizations will be those that are able to adapt to the new requirements the “deputies’ demand.

One area of particular focus will be systems and processes in place to properly gather, report, monitor, and resolve debtor complaints. The cost of implementing a system to track and respond to these complaints will affect the bottom line of collection agencies and law firms practicing in debt collection.

Though some in the industry may see these audits as just a new hindrance to doing business, the importance of the new requirements cannot be overstated. The old way of focusing solely on FDCPA complaints will simply no longer suffice. While collectors will still want to avoid FDCPA complaints, the cost of losing a primary collections client due to an inability to pass ongoing compliance audits will have a far greater impact. Because of this, collectors must adapt to working with the new auditing partnership of the CFPB and their creditor clients.

In order to run an effective compliance management system, companies need quick access to data. Executives MUST be able to quickly spot trends in the type, location, and/or process causing complaints. By properly monitoring and tracking complaints, your company can better analyze and resolve issues and alert your clients proactively. Check out the Surefire Business Intelligence Portal to learn how our clients are accessing the data seemingly needed during compliance audits.

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