For any reputable collection agency, compliance shouldn’t be just a requirement, but rather an integral part of the day-to-day operations. Because of the highly litigious, highly regulated industry, failure to build an agency with compliance at the forefront can lead to consequences such as fines and lawsuits with the most serious consequence being damage to a client’s reputation as well as the agency itself. An agency that puts compliance first ensures that their agents treat consumers fairly and continually monitors and rewards agents for adhering to their policies. A compliant agency looks to foster long-term relationships with clients and build mutual trust.
Governing Bodies for the Receivables Industry
Collection agencies are highly regulated and must maintain compliance with all regulatory bodies that ensure fair debt collection practices and protect the consumer. Regulators include:
- Fair Debt Collection Practices Act (FDCPA) – A federal law that restricts how collectors can contact debtors, prohibits harassment, and ensures transparency in communications.
- Fair Credit Reporting Act (FCRA) – Governs how collection agencies report debts to credit bureaus and mandates accuracy in consumer credit reporting.
- Consumer Financial Protection Bureau (CFPB) Rules – The CFPB enforces debt collection regulations, ensuring that agencies comply with fair practices.
- State-Specific Laws – Many states have their own debt collection regulations, sometimes stricter than federal guidelines.
Agencies that abide by and follow these regulations can greatly reduce unnecessary complaints, fines and lawsuits.
Benefits of Working with a Compliance-Minded Agency
I. Consumer Rights will be Protected
A compliant agency strives to be a beneficial asset to the industry’s overall reputation. They care about providing the consumer with a positive experience and know the importance of providing accurate information. Monitoring and coaching agents are an ongoing part of daily operations.
II. Their Clients Reputation is as Important as Their Own.
Non-compliant agencies not only put their well-being ahead of their clients they also open the door to legal and financial risks that put their clients in jeopardy. A compliant agency strives to be an extension of their clients’ receivables process and works hard to avoid unnecessary and avoidable risks.
III. Peace of Mind and Easy Client Access
Compliant-minded agencies have processes in place to ensure smoother and more streamlined operations. This is an advantage to their clients as it reduces disputes and errors, allowing the agency to provide better overall collection results. Compliant agencies readily share information such as recordings and agent notes as requested by clients because they are confident in their processes.
Processes to Ensure Compliance
- Continuous Ongoing Training – Compliant agencies keep their agents informed of any industry changes. Training guidelines are in place and followed.
- Accessible and Clear Policies – Easy for potential and current clients to confirm that regulatory guidelines are adhered to.
- Automation and Compliance Software – Agencies utilizing the latest in compliance technologies reduce risk and help maintain peak performance and compliant processes.
To Summarize
Aligning with a compliance-minded agency in today’s highly regulated, highly litigious environment is a smart move for any creditor. The complaint-minded agency looks to protect their brand, which in return protects yours. Making compliance a priority helps to minimize costly legal pitfalls and ensures the consumer is being treated fairly. A business that values the consumers they do business with should choose an agency that mirrors their own compliance standards.
Troy Funk – Business Development
Midwest Fidelity Services, LLC
