Collection Misconception

How compliance can rewrite the narrative

The collections industry has been understood to be aggressive in the past. Bad actors shape the predominant image of what a collector is and does. However, over the last decade, a shift has occurred—more and more debt collections companies are shedding that misconception due to their renewed focus on compliance and customer experience. 

Chief Risk and Innovation Officer Michael Meyer said, “Being compliant ensures better customer and client experience. It reduces risk in operations. Compliance is the key to making the business run.”

While this approach may be new to some agencies, since day one, MRS has held firm on the concept of “compliance as strategy,” a value which has instilled the utmost attentiveness in agents when interacting with customers. Despite comprehensive training, guidelines, and hardworking employees, misconceptions about the industry still prevail. 

Meyer said, “It’s difficult to change the narrative when it comes to debt collectors. Many consumers don’t know how heavily regulated we are. We have federal, state, client, and internal requirements that we have to follow. It’s critically important to have these levels govern compliance and what agencies can do.”

With the existing rules and the CFPB’s upcoming additions, the collections industry remains a heavily regulated sphere. All these laws are in place to protect the consumer and reduce the amount of bad actors that still operate. Maintaining compliance at all times and making the necessary changes as new rules are announced, MRS prioritizes the consumer’s experience.

car driving down road

In order to succeed in the collections industry, compliance cannot be overlooked. Meyer offered an apt metaphor for compliance’s role in a business: “Compliance provides the guardrails which allows the car, which is operations, to drive down the road smoothly. Compliance functions as the surrounding pieces, the stop signs, the speed limits, the lines, so everything else can operate without difficulty.”

As consumers have more positive interactions with compliance first agencies, they will reevaluate their misconceptions. The change won’t be overnight, but incremental. Little by little, compliance will rewrite the debt collections narrative.

Building Trust with AI

MRS, Adam, and Prioritizing Customer Experience

While AI or Artificial Intelligence has roots dating back to the 1950s, significant advancements took place in the last two decades which propelled the type of capabilities that we see today. Machine learning became heavily funded, and such backing allowed for the great advancements we see today from Watson to Siri to Alexa. 

With applications of AI embedded in everyday devices like phones, people have started to build rapport with machine learning. However, along with your friendly neighborhood AI, comes its more nefarious counterparts like deep fakes and intrusive data gathering technologies. Building AI isn’t enough anymore—people want AI that they can trust. 

As AI grew and became more agile and seamless, MRS knew there was a place in the collections industry for this kind of technology. Innovation has always been integral to the way MRS operates, so we implemented Adam, our own virtual collection agent, in early 2018. 

Collecting debt creates an environment where it is important to foster trust between agent, client, and customer. Because MRS is experienced in building these kinds of relationships, introducing Adam into the collections process posed a challenge, but one that we knew we could handle. 

In order to build the best AI, MRS looked to its agents. Co-CEO Jeff Freedman said, “We began with trying to understand how our human agents build trust with customers. Humans do this through listening carefully, demonstrating empathy, and showing a willingness to work together with a customer. AI obviously cannot do all of those things, so the first thing we had to recognize was that Adam would not work for many customers, no matter how sophisticated he became.  But there are a sizable number of customers who want to work with the AI because they believe it will allow them to do what they want in a quick and efficient manner and avoid the discomfort of having to deal with a live agent. To build trust with these customers, we had to show them that Adam can allow them to accomplish what they want in a quick and secure manner. We also needed to identify what would cause customers to be wary or untrusting of the technology.”

red circuit board

Oftentimes, traditional Interactive Voice Response, or IVR, features a long winded menu option and that customers recognize as laborious and therefore opt for a live agent. Instead of building Adam with the traditional menu option, MRS engineered its AI to be ready to listen to the natural speaking voice of any customer. Freedman said, “With Adam, we wanted customers to realize right away that they could speak naturally and speed up the process and avoid the lengthy procedure of responding to menu prompts that may or may not get them what they want.”

Other factors that account for AI mistrust were considered and implemented in Adam’s design. Any pause before an answer, background noise, and colloquialisms or typical human lingo diminish a customer’s trust, so Adam was taught to handle and learn from these experiences. Freedman also highlighted that knowing Adam’s limitations is important too, and when those circumstances arise, Adam can transfer the customer to a live agent.

Adam offers a range of solutions and payment plans, while prioritizing compliance and the needs of both the customer and client. One of the main concerns with AI stems from the technology’s placement among everyday household items. Conversely, Adam differs from Alexa and Siri, because it exists solely as a virtual collections agent, to help people pay off their debts. AI with a singular purpose like Adam executes a task to completion, and then rests, eliminating many of the fears that arise from the more ubiquitous AI household items. 

Despite all the challenges that building Adam posed and the mistrust that surrounds more common AI, Adam excels. Freedman said, “Customers have shown us through their behaviors that they trust Adam to handle the most sensitive of interactions—the handling of payment processing and taking their payment information. In 2020 alone, Adam took almost 30,000 customer payments totalling over 6.5 million dollars. All of those 30,000 payments were done completely via self-service with no agent interaction and many of these calls took place outside of normal business hours, late in the evening or on weekends.”

AI surrounds us everyday, sometimes helping, sometimes hindering, but MRS wanted to build technology that assists customers on each call. Adam inspires trust through careful communication and placing customer needs at the forefront of every call. AI is the future, and MRS is ensuring that our AI is the kind that you know you can trust.

MRS Turns 30

Three Decades of Excellence in the Industry

Thirty years ago, when Saul and Jeff Freedman started MRS BPO, LLC, they didn’t foresee their company leading the collections industry in technological advancements and strategic innovation. In the beginning, they saw a business opportunity and started there. 

Co-CEO Jeff Freedman said, “Starting MRS was a mix of emotions—exciting for sure but also a bit scary due to the risks involved. We were pretty young when we started and we were unaware at the time of the high failure rate among most start-up businesses. That said, we were confident in our business proposition. When we started, many lenders were not using agencies beyond their primary ones and there was no recall process. Our proposition was to go in after their primary agency and collect on the accounts that the primary agency said were uncollectable. We did this on contingency, of course, so the risk to the creditor was minimal. We were able to prove ourselves this way and often out-collected the agency that had the accounts first!”

After thirty years in business, MRS has served the accounts receivable management needs of companies within the financial services, governmental, student loans, telecommunications, and utility sectors, as well as implementing technology and compliance management processes that benefit both the client and customer. However, back in 1991, MRS’s present seemed like a far reach. 

Jeff walks by old computers in office
Jeff Freedman (right) at previous MRS HQ

Jeff said, “Building from the beginning was mostly about learning through failure. We made our fair share of mistakes but we believed in our overall vision. We wore every ‘hat’ in the beginning since we had no staff. We did sales, collected, opened the mail, posted the payments, answered the phones. It was definitely exhausting. We literally worked every day and sometimes we worked as many 12-15 hours a day. We also worked other jobs at the same time since early on we could not afford to take salaries.”

Both Saul and Jeff emphasized how much the early days of MRS taught them about business and the industry.

Saul Freedman said, “As I look back, building MRS was, and still is an education and learning experience.”

Surely, but steadily, MRS grew and expanded, but always retained the family values at the heart of the Freedmans and their vision for the company. As MRS added secondary locations in Ohio and Alabama, the emphasis on family permeated the company at each site. From philanthropic drives, to spirit week, and everything in between, MRS family values radiated. But Saul and Jeff explain it was never a conscious decision to focus on these values. The company culture evolved simply from the way that the brothers prioritized integrity, treated customers, clients, and co-workers with respect, and led by example.

Saul, Jeff, and Rick smile for the camera
Brothers Saul, Jeff, and Rick Freedman

Jeff said, “We instill these values [empathy, respect, and kindness], and preach them, not because they are ‘family values’ but because we believe they are the right thing to do.  If you treat everyone you interact with, be it a client, a co-worker, an employee, or someone past-due on a debt as a customer and with ‘good service,’ it builds a culture of trust, respect, mutual understanding and cooperation. I believe that is what we have done.”

Jeff explained how the collections industry is often misunderstood, but MRS operates counter to any of these preconceived notions. He said, “At MRS, we have tried to help foster more positive views of our industry by focusing on compliance, quality, and customer experience. We have also tried to do this through various outreach and philanthropic programs to improve the communities we live, work, and serve in. In this vein, we feel good about what we have been able to accomplish over the past 30 years.”

Over the three decades that MRS has been in business, the collections industry has morphed greatly. As legislation evolved, so did MRS, refusing to be stagnant in the ever-changing industry. After the 2008 recession, the CFPB was formed, a watchdog agency with a special interest in collections. 

Saul said, “We knew that compliance was becoming paramount amongst our clients as well as the regulatory bodies including the forming of the CFPB. Instead of fighting this change, MRS embraced it, and invested in compliance. We changed the roles of one of our long time executives to Chief Compliance Officer, and strengthened our business controls, policies, and procedures, etc.”

Technology has greatly improved over MRS’s lifespan, prompting innovation in the digital age. Phone calls are a less popular method of communication, a change which demands collections agencies to be nimble in the services that they offer.

The Freedman family smiles at a restaurant
Freedman Family at Gold Club Dinner

Jeff said, “We are always looking for ways to improve. There is a tendency to think ‘why mess with it if it is not broken.’ We have never operated that way. We have always pushed to try and be even better and our digital transformation is a perfect example. We recognized that customer behaviors were changing and people were seeking more ability to self-serve. To meet this need we knew we had to find a way to adapt. We did our homework and brainstormed ways to be compliant and innovative. It took months of work to complete our research and develop strategies, but in the end, we were able to successfully launch several new digital, self-service tools that have transformed how we interact with customers.”

More than anything, Saul and Jeff are proud of how MRS has shifted and transformed into the company it is now after thirty years in business. 

Saul said, “MRS has now existed for more than half of my life, and as I look back, I never dreamed of being where we are today, with so many friendships, relationships, and families that have been created and impacted because of MRS, it is the most rewarding feeling I could be blessed with, and being able to do all of this with my brother Jeff makes it all the more special.”

It is lost on neither Saul nor Jeff that MRS has impacted so many lives. Through ups and downs, the brothers have worked to build a strong company that cares about its clients, customers, and employees. Thirty years is no small feat—it is a milestone and a testament to the hard work of the Freedmans and everyone who has ever been part of the MRS family. Here’s to the next thirty!

Privacy Law

Consumer Privacy Law has been a hot topic as many states propose new legislation emphasizing data security. As states create more comprehensive plans that grant consumers greater access to information collected about them, it is imperative that the debt collection industry understands and complies with the new regulations.


California has been a trailblazer in consumer privacy law, which should be no surprise because the largest technology firms that deal in big data are located in Silicon Valley. In 2023, the California Privacy Rights Act will go into effect, expanding the previous California Consumer Privacy Act. The legislature will give consumers greater control over how businesses use their personal information. As seen below, many states have followed California’s lead, creating similar legislation.

New York

The proposed bill in New York, titled the Consumer Data Privacy Bill of Rights states that consumers should have “the right to access, control, and erase the data collected from them; the right to nondiscrimination from providers for exercising these rights; and the right to equal access to services.” The verbiage remains similar across states proposing privacy laws.


The House and Senate both passed the Consumer Data Protection Act that gives consumers more control over their personal data. There is also an opt-in clause for sensitive data and the bill would go into effect starting in 2023.


The Washington Privacy Act is also concerning privacy, encouraging greater transparency between businesses and consumers. Originally proposed in 2019, this year lawmakers are looking to get it passed in the state House and Senate.


This year Florida has introduced a consumer privacy protection bill. Once failed, the state will bring House Bill 969 back to the floor in an effort to protect individual data. If enacted, the bill would go into effect in 2022.


Like all the states listed above, Oklahoma filed a bill to increase protection over consumer data. Earning bipartisan support, this bill would require businesses to gain explicit consent before collecting and selling consumer data. 

gavel on a desk

What does this mean?

Consumer privacy is a widespread topic of interest. In the digital age, we are all too familiar with our data being collected from every website we click on, however where that data goes remains a mystery. These laws aim to allow consumers to increase control and security over their personal data. From the perspective of the debt collection industry, there are several implications. 

Third party collection processes involve contacting a customer on behalf of another company. Understandably, consumers are confused when they get a call from a company that they haven’t heard of. Especially today, with the increased awareness of data breaches and personal information being sold, this can raise alarm bells. 

With these confluence of factors, the new legislation may seem daunting to many collectors. The solution lies in consent. Much like texting and emailing, consent will be applied to data. While this complicates the process of collecting, it is just another piece of compliance regulation that MRS knows it can handle. Even as the complexities increase dramatically as each state draws up its own set of laws, MRS has always adopted a compliance first attitude. 

Privacy laws are checks on big data companies to protect consumers. MRS works to find the best solutions to help consumers resolve debt. As a compliant, consumer oriented business, this legislation will not change how we fundamentally operate.

An Uncertain Future for the Credit Market

TransUnion released an annual report on credit insights for 2021, largely highlighting the positive prediction of a lending rebound. Due to the pandemic, the amount of loans approved in the third and fourth quarters in 2020 was much less than originally expected in a pre-COVID forecast. Still though, in the second half of 2020, the Federal Reserve noted that credit card debt declined by 11%. This can be explained by the stimulus package and the decrease in people going out during the pandemic. In the Q3 of 2020, payments on deficient credit card accounts increased, marking the first time in 30 years that those months saw a drop in debt.  

What does this all mean for the debt collection industry? As noted above, many people are putting their money towards debts and banks and credit lenders are beginning to increase the number of loans that they grant. 

Image of hand holding a few credit cards

“What we saw last year, when the stimulus got passed, was that the additional 600 dollars a week put a lot of extra disposable cash in people’s pockets. And paired with the fact that they couldn’t go anywhere and spend it, a number of consumers in the debt cycle took advantage of that and paid down debt. There was a real increase in liquidity over the summer. That started to drop off in July when the checks ended, and the payments did begin to taper off at the end of the year in 2020,” said Chris Repholz, MRS’s Chief Customer Officer. 

Now, with the next stimulus package that was passed by Congress, 2021 is expected to be a strong year for the debt collections industry.

Repholz said, “We anticipate a really similar effect from the 2021 stimulus package. There’s going to be weekly unemployment payments plus an additional 1,400 dollars sent to everybody who qualifies for it. What we believe is going to happen in the remainder of 2021 is that a lot of people are going to use that stimulus money to pay down some debts. So 2021 looks like a really good year from a collection agency standpoint.”

But as payments and lending is favorable for the immediate future, there are undeniable implications in the payoff cycle. There will always be debt to collect, however the volume will decrease dramatically from 2021 to 2022.

“In 2022, many people predict that there will likely be a constriction in inventory that gets placed in the debt market. Usually, debt goes through a normal aging cycle and continues to get placed before it is paid. But because a lot of debt will be paid off this year, in 2022 there will be a definite decrease in the amount of overall placement value in the marketplace. This means there will be less debt for sale and less debt for placement for agencies.”

While it is expected that the debt and payment cycle will return to normal in 2023, the 2022 year will be integral for agencies. In this scenario, with less debt to place, bottom performing agencies are at risk to be cut by their creditors or consolidated. 2022 will be a year that ‘thins the herd,’ so to speak.

But there’s another side to the story. Some creditors predict exactly the opposite: Post charge off placements will be pushed back to later in the year and into 2022. “Banking clients will eventually cease COVID extensions and deferrals on consumer loan payments which will result in a large number of delinquent accounts rolling into charged off debt,” said Misty Carson, Executive Vice President of Sales and Marketing.

This other perspective asserts that due to credit companies’ understanding during tough pandemic times, the postponing of placing debt will actually increase the volume in 2022. Carson said, “Utilities and telecommunications clients are predicting similar trends for later in the year as they have also offered customers extended payment terms and suspensions of disconnects due to the pandemic.”

Each outlook may mean different things for the collections industry, but regardless, MRS is determined to keep expanding and helping customers and clients alike. “Our focus on innovative technology and quality to ensure that we have best in class results will enable us to safely grow our business in 2022 regardless of whether others are struggling or succeeding,” Repholz said.

With the predictions for the upcoming years, it is important to act now. Repholz said, “2021 is the right time to invest in technology and compliance systems that will enable a company to be first-rate for whatever comes in 2022.”

So, whether a bountiful harvest is in store, or the proverbial “winter is coming,” MRS is confident that our 2022 will remain strong, innovative, and successful.

Work From Home One Year Later

Picture a call center: a large open floor, desks in designated clusters, agents interacting with each other and customers alike. Prior to 2020, there would be nothing wrong with this image. But our newly minted pandemic sensibilities might sound alarm bells at the thought of a populated space.

MRS moved swiftly, prioritizing the health and safety of our employees and their families. By March 20th, 2020, MRS was able to integrate a Virtual Desktop Infrastructure to enable a work from home solution. In just two weeks, MRS achieved 100% deployment of eligible agents working productively and safely from their own homes. MRS’s decisive action came before ‘stay-at-home’ orders were issued, highlighting our trusted innovative drive.  

work from home spelled out in scrabble tiles

Using Amazon Web Services to host our VDI, MRS created a secure and seamless transition from three premises based environments to a work from home solution. Additionally, our agents’ ability to adapt and settle into the new normal was laudable.

MRS employees went above and beyond during such unprecedented times. Chief Operating Officer Jim Beck said, “Our outbound calls, contact rate, and performance exceeded expectations and prior months. The flexibility, understanding, and hard work of our team continues to impress me. The hard work of our agents has been an enormous benefit and value for our clients.” 

Though the pandemic has been incredibly traumatic, we have learned many things about work from home solutions. A study shows that employees are 35% to 40% more productive than when they are in the office. A survey reported that 94% of employers agreed that their company’s productivity was the same or higher since they implemented work from home solutions. 

Within MRS, we saw work from home results including reduced breaktime and not ready time, increased right party contacts, and increased gross collections and payments across the board. MRS has also seen an increase in payment count, which indicates that agents are reaching customers effectively and their interactions are resulting in more regular payments. Additionally, as right party contacts have increased, so has talk time, signifying an enhanced quality of negotiation and conversation with customers. Due to the ease and comfort of working from home, absences have decreased by 30% and employee 6 month tenure has increased by 23%. 

2020 has proved that working from home works. The practice will likely become commonplace, as many companies have seen their employees stay productive and diligent out of the office. While work from home is the only solution at the moment, it is not for everyone. We also predict more hybrid offerings, allowing employees to split time in the office and from their homes. Consequently, a number of state regulators—who also happen to be working from home—have become very receptive to allowing this solution to become an allowable option when the pandemic ends. Several states have already incorporated work from home language into their revised collections statutes. 

MRS has seen the resilience of our employees and their dedication never ceases to impress us. While working from home posed some hurdles, MRS easily surmounted them due to management’s rapid action in the face of a global health crisis and the adaptability of our agents.

Alec Tilley joins the MRS Team as Senior VP of Strategy and Operations

CHERRY HILL, NJ, FEBRUARY 18, 2021 — MRS is pleased to welcome Alec Tilley to the company full time as Senior Vice President of Strategy and Operations. Alec has a long history of success in our industry with over 12 years at ARS and Encore Capital prior to starting his consulting company. Previously, Alec was working with MRS as a consultant to assist with onboarding new clients. Alec will be leading a newly formed team that focuses on analytics, contact management, and letter strategies. Alec’s knowledge and skills pair perfectly with MRS values and vision and the company believes that his transition will be a seamless one.

Chief Operating Officer Jim Beck says, “I am excited to have Alec as part of the team at MRS. Alec brings a wealth of knowledge as well as a ton of experience to the team to help us execute our vision of building  a customer experience that integrates MRS’s cutting edge digital tools with traditional collections to greater financial results.”

Headshot of Alec Tilley

Tilley says, “I’m happy to join the growing MRS team that is winning with clients by leveraging industry-leading digital contact center solutions to provide customers options to communicate in their preferred channels.”


Founded in 1991, MRS has served the accounts receivable management needs of companies within the Financial Services, Governmental, Student Loans, Telecommunications, and Utility sectors for 26 years.

MRS BPO, LLC is a full service accounts receivable management firm based in Cherry Hill, New Jersey. The company’s unique combination of experience, technology, and compliance management processes allows them to provide industry-leading debt recovery solutions while enhancing their client’s brand and reputation. For more information on MRS BPO, LLC, visit them online at