How debt collection became one of the most consumer focused sectors
It’s no surprise that many people still have a negative image of the debt collection industry. In the past, the reigning philosophy was to collect by any means necessary. The industry has changed dramatically through consolidation and regulation and become extremely focused on compliance, business ethics, and customer experience. The fact is, debt collection has morphed into one of the most consumer focused industries in the US — people just don’t realize it.
Debt collection is heavily regulated. Bad actors are increasingly unsuccessful and have been “weeded out” by the Consumer Financial Protection Bureau. The CFPB, founded in 2011, champions consumer rights and is responsible for enacting legislation that governs the debt collection sphere. Regulation F, a new CFPB rule, will be implemented November 2021. In a huge step for the collection industry, Reg F tackles technological innovation and its place in accounts receivable management. With rules surrounding texting and emailing, limitations on phone calls and new approaches to credit bureau reporting and time barred debt, the consumer has never been more of a priority.
“The vast majority of consumers in the US do not want unsolicited phone calls and respond far more favorably to texts and emails, which allow customers to respond when it is more convenient for them and is much less intrusive,” said Saul Freedman, Co-CEO. “Until Reg F, rules around the use of electronic communications were ambiguous and left to a variety of interpretations. Now it’s been codified, and that is good for everyone: creditors, their customers, and debt collectors.”
More than just a legal shift, the collection industry’s culture has transformed as well. MRS highlights empathy in training and customer experience is one of the cornerstones of our business. The caring family culture present at MRS carries through our phone calls, emails, and texts. Our agents are supportive and helpful throughout conversations, always looking for the best solution for the customer and the client.
“MRS has long believed that you catch more flies with honey than vinegar. For the last decade, we’ve placed significant importance on customer experience and focused our training and call quality programs on rapport building, empathy, and doing what is right for the customer,” said Co-CEO, Jeff Freedman .
Debt collection companies also have compliance teams to ensure that laws are being followed and customers are being treated with the utmost respect. With a whole department dedicated to upholding the highest standard of operation, collection companies are connecting with consumers in meaningful ways.
Chief Risk and Innovation Officer Michael Meyer attested to the integral nature of compliance in the modern collections industry. “Compliance is critical and nowadays completely interwoven with all facets of a company to ensure the customer, their data, and their privacy is protected.”
For the debt collection industry the times have changed, but public opinion hasn’t quite caught on yet. People interacting with collections companies are often surprised at the treatment—in a good way! MRS has always prioritized customer experience and worked to quash peoples’ misconceptions about the industry. We believe if we keep doing what we do best—help customers resolve debt through supportive conversations—public opinion will catch up.