An Industry Transformed

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.” 

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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.

Playing Defense

Cybersecurity, breaches, and bad actors

In the past 10 years, giants like Yahoo, Alibaba, LinkedIn, Facebook, Marriott, and Adobe (just to name a few) have all experienced large scale data breaches. Living in the digital age offers convenience and ease at every turn, a double edged sword when bad actors exploit insecure networks susceptible to attack. 

Consumers have grown wary, watching information and data being mined, hacked, and stolen across multiple platforms. Industries that deal in sensitive information like accounts receivable need to protect confidential data and build trust with the customer. 

Chief Risk and Innovation Officer Michael Meyer works to ensure the safety of the sensitive data housed at MRS. By thinking like an attacker, Meyer is able to implement the kind of safeguards to block their success. Staying one step ahead of “the enemy,” so to speak, is integral to cybersecurity.

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Meyer talked about why data breaches are on the rise, “Companies are moving to the cloud, collating all their data into one or two very large databases. Putting all a company’s information into one data warehouse actually increases exposure and vulnerability. One single breach has a huge impact. It’s like putting all your eggs in one basket.” 

Playing defense against an unknown offense is difficult, but MRS prioritizes security and risk. “At MRS, we don’t put all our data in one place. We also use defense in depth which includes layering security tools around all our data. Part of the challenge is that as a company, we always have to be right, and an attacker only has to be right once. We have to guard everything all the time.”

Cybersecurity is a layered and evolving system; what we did yesterday is not what we’ll do tomorrow. Because technology is rapidly changing, security measures must keep up. Meyer and the entire security and IT team innovate on a regular basis to meet the moving target that is cybersecurity. Meyer emphasized awareness as a facet of security. “You can learn a lot from other breaches,” Meyer said. “It’s important to be vigilant and remediate vulnerabilities and act quickly. Good security is learning and educating.” 

In the past year, data breaches have shifted, resembling digital muggings in which bad actors extort companies and customers. Work from home security parameters further complicate the issue. Prevalent but preventable hacks, like the Colonial Pipeline ransomware attack, demonstrate how imperative cybersecurity and risk management are to a business. “I think companies are putting more of a priority on security. It’s being added into a lot of business structures,” Meyer said.

A single breach is fatal for many companies. Preemptive defense is MRS’s backing philosophy. Bad actors with penchants to breach are out there, but the MRS team stays one step ahead to ensure the safety and security of sensitive data.

MRS at insideARM Strategy & Tech 2021

Conference in review

From July 13th through the 15th, insideARM held their annual Strategy & Technology conference. As a sponsor and attendee of the event, MRS’s presence couldn’t be missed. Chief Customer Officer, Chris Repholz was also featured on a panel about self service called “The Increasingly Independent Customer,” and Chief Operating Office, Jim Beck spoke on the panel titled “Meeting the CFPB 7×7 with Intelligent Contact Data.”

Repholz’s panel delved into the shift from traditional collection approaches to meeting the customer where they want to be met. Instead of calls, MRS utilizes multiple digital channels to reach a customer, including text, email, chat, interactive voice agents, and a self-service portal. “We believe that customers will gravitate to service providers who give them communication options and those providers will get top of the mind and top of the wallet status,” said Repholz.

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With the new CFPB rules implementation date fast approaching, Beck’s panel focused on how to stay efficient and compliant. MRS uses analytics to ensure each contact attempt is at the best time of day and through the best channel for the customer. Beck highlighted that the new rules do not change the way MRS operates, but provide some much needed clarity in policy regarding technological advancements. 

The iA Institute is an exceptional thought leader, hosting events like Strategy & Tech that enable industry members to connect and innovate. At MRS, we love participating in these events and sharing our unique approach to collections with the industry. Repholz said, “While we are a 30 year old collection agency with deep roots in the industry, we are very focused on progressive technology that creates automation, better customer experience, and more efficient ways for customer contact.” 

MRS thoroughly enjoyed its time at iA’s Strategy & Tech and we’re excited to see what iAST2022 will bring!

Arm in Arm

Women leaders in the ARM Industry

In years past, women were largely outnumbered in the financial sector, especially in leadership roles. However a shift has been occurring. While women face barriers due to inequality, statistics show that in the United States in 2019, the financial services industry was 54.3% female. Despite this gain, women still face a pay, promotion, senior/executive leadership, and mentorship gap. 

The accounts receivable management, or ARM, industry however, is a bit of an outlier. There is no shortage of exceptional women, steering thought leadership, catalyzing change, and paving the way for the next generation. No journey is uniform, but all these women share perseverance and grit in the face of adversity. 

Though Joann Needleman is a familiar face and a fountain of knowledge in the industry, she faced many challenges when first practicing law. The Member at Clark Hill and Leader of the Consumer Financial Services Regulatory and Compliance Group said, “When I was a baby lawyer, judges would refer to me as ‘young lady’ which is so condescending. When I started to actively litigate, male opposing counsel would behave so badly when you disagreed on a point. (I later learned that the louder they yelled, the more my argument was correct). It wasn’t until about 10 years into practicing law that I was treated as a lawyer and not as a woman.”

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Needleman recounted in the past, when the ARM industry was dominated by men, conferences were daunting if you didn’t play golf. Getting involved, especially on the leadership level, helped, she said. “I was very involved at NCBA. I quickly joined committees, got elected to the Board of Directors and eventually became the first woman president.”

Needleman’s determination and hardwork have not gone unnoticed; she is an incredibly visible and accomplished member of the ARM industry. And she is not alone; there are so many other women who stand alongside her. One of those women is Stephanie Eidelman.

Stephanie Eidelman, President and CEO of The insideARM Institute, is always ready to spark change. As leader of insideARM, one of the leading news sources and advocacy groups in the sector, Eidelman has helmed key projects that have advanced the industry. But getting to where she is today took work. 

In the past, the financial services industry was dominated by men. Eidelman remarked that she was used to being the only woman in the room. Regardless, she placed her focus on growing herself and her business and pushing past her comfort zone. “I was always very comfortable in operations roles, behind the scenes, and with projects that could be clearly defined and accomplished. But to be a CEO I needed to get comfortable with unstructured outreach, starting something from nothing, managing through ambiguity, developing external relationships, engaging in marketing, and asking for the sale. These were huge new skills that took years to develop. I wish I had the benefit of a mentor (or mentors) through the process.”

Eidelman’s experience highlights the mentorship gap that has been identified in the industry, but her company’s work pioneering the Women in Consumer Finance Conference offers a fantastic networking platform to mend the gap.

Many of the impactful women in the ARM industry are part of the MRS family and work everyday to create an impact. Guiding their teams, leading by example, mentoring new talent, fostering growth, and championing charitable endeavors, these women work to leave the industry better than they found it. 

Throughout the country, women accounted for 26% of all Senior Vice President roles in 2019. MRS ranks above the national average, with an executive team made up of 40% women. Though many women started their careers at other companies, they consistently remarked on the welcoming environment here at MRS. Regina Weir, Chief Personnel Officer said, “The culture has always been like a family.” 

Executive Vice President of Sales and Marketing, Misty Carson added, “I am very fortunate to have the leadership support and encouragement at MRS of our Co-CEOs and Executive Team members.” 

MRS prides itself on a family culture. As such, a welcoming community of people have always worked together to ensure the company’s environment remains open, friendly, and as always, equal.

Though MRS has a warm culture, not every company does and that can be difficult to navigate. Weir offered advice to women looking to enter the sector, “Be confident and professionally assertive in your area of expertise when you have the opportunity to present your ideas.” 

Kelly Feoli, Executive Vice President of Operations, continued, “My advice to all women is to stay true to who you are. Do not change your beliefs based on those around you. To all the young ladies out there, you are so smart and powerful and can do anything you want as long as you work hard to make things happen. Never settle for less because you deserve more!”

Women in the workforce have witnessed and experienced plenty of inequality, but MRS’s commitment to equality for all is unwavering. The ARM industry has transformed over the past few decades and the impact so many women have had on its growth cannot be underestimated. 

Sources:

https://www.catalyst.org/research/women-in-financial-services/

https://www.catalyst.org/research/women-in-management/