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Communication is complicated, these days. Between tweeting, texting, Zoom calls, and social media chatter, we have more options than ever for communicating with friends, businesses, and our financial institutions.
With so many new platforms available, collections communication is no longer as straightforward as sending a letter or making a phone call—and the new methods of getting in touch with your past-due borrowers all come with their own rules and regulations. When you outsource your collections efforts, ensuring that your partners represent your financial institution well and communicate with your borrowers compliantly is a top priority.
To find out more about what questions you should ask before outsourcing your collections communication, I spoke with Jeffrey Julig, Chief Information Security Officer at SWBC. In this blog post, Jeffrey gives us tips for vetting your collections partner’s communication strategy.
What’s the first thing financial institutions need to consider when implementing a collections communication strategy?
First, you’ll need to identify the purpose of your initial communication, and consider what following through to the natural end of that communication looks like.
A pay prompt, for example, would simply remind an account holder that they need to make a payment. There’s no call to action other than making a payment. By contrast, some communications may require the account holder to follow a hyperlink, and that could be potentially more suspicious to the account holder, and they may be less likely to act.
So, what is the purpose and content of your communication, and what communication strategy and platform best supports your overall goal in sending it? Depending on the content of your communication, the message may invite additional scrutiny.
With so many different ways to communicate with account holders available, what do financial institutions need to consider when their collections partners reach out on different channels?
When you decide to reach out to a past-due borrower, what communication platform are you going to use to reach that person? You’ll need to consider what rules apply to that particular channel, and how the third party will assure compliance with those regulations.
For example, if you want to communicate with account holders via email, how are you going to distribute that email? Will you send it out under your brand name, or will you use your third party’s branding? If so, how are you going to inform your account holders that they should trust that communication?
For SMS, you need to get consent to send text messages. How are you going to manage opt-ins and opt-outs? If someone is sending this communication on your behalf, how are they going to manage the opt-ins and opt-outs for SMS communications?
Related Reading: Top 5 Reasons to Include Texting in Your Collections Efforts
If you’re going to use a phone call, what is the content of that phone call? What are the rules regarding the content of your message? Also, when, where, and how are you allowed to communicate with that particular account holder?
What questions should you ask to properly vet your collections partner’s communication strategy?
You absolutely need to know you can trust your third party to communicate on your behalf. Important considerations include:
How is your third party going to demonstrate transparency to you? For example, do they have a client portal which allows you to monitor all activities taken on your behalf?
Does your third party have a documented compliance history? For example, can they demonstrate that they adhere to Fair Debt Collections Practices Act (FDCPA) compliance policies and best practices?
If they are reaching out to your members via call center agents, how have those agents been trained? Does their training include sensitivity training so that they are empathetic to your account holders?
What standards does your third party adhere to for sending email, text and interactive voice recognition (IVR) communications?
What is the third party’s incident response plan?
Are they prepared to manage a security-related incident?
Have they successfully handled incidents in the past?
Related Reading: 6 Questions You Should Ask an Outsourced Collections Partner
A good collections partner should have a compliance program and an information security program in place that demonstrates their thorough knowledge of the business. This means they understand and can mitigate the risks that come with collections communication. They should also have transparent communication with you as the financial institution, so that you are aware of what and how they’re doing.
When vetting your third party collections partner, do your due diligence. Make sure that the use case you’ve decided to engage that third party to perform on your behalf meets your expectations, because, at the end of the day, they’re representing your institution to your consumers.
How important is it to have a full picture of exactly who is communicating with your borrowers?
A lot of times, financial institutions will work with a third party and assume that’s where the line of communication begins and ends. It’s important to know if your third party uses a third party. If you outsource to a third party, and they outsource to someone else, now you have a fourth party in the loop. Does the third party you’re working with enforce your same expectations and standards on their subcontractors?
Any closing thoughts?
Just because you can communicate doesn’t mean you should. You should verify that you can trust any third party you work with to communicate on your behalf.
Vetting vendors is certainly not a quick or easy process. It requires thorough due diligence, but in the end, when you take the time to find the right outsourced collections provider for your institution, it will be well worth the time and effort.
At SWBC, we care about your compliance and security. We’re here to support your financial institution, because we’ve invested the time and resources to make sure that all of our services have a continuity of compliance, information security, and privacy framework that would meet our partners’ standards and live up to expectations of trust.
As SVP of Marketing for the Financial Institution Group, Tony Streeter is responsible for product marketing across all lines of business (predominantly auto and mortgage risk management) geared toward the financial institution market. Over his 30+ year career, Tony has led new product development, Ecommerce platforms, digital marketing, patented various business processes, and has had 20+ articles published across IT, Marketing, Manufacturing, Financial and other topics within industry publications.