Compliance Tips for Outbound Debt Collection Communications
1. Introduction
The largest challenge to successful collection efforts today is outbound communications
compliance. There are many rules to follow, and requirements are continually evolving.
Collection organizations need a solution — for predictive dialing, outbound interactive voice
response (IVR), and text messaging in particular — that enables them to meet these
legal requirements and to dynamically create rules to manage their outbound voice calls
to landline and mobile phones, as well as for sending text messages to customers.
This white paper conveys key lessons in collection compliance for outbound
communications, including:
• an overview of the compliance landscape in the United States, namely the Fair
Debt Collection Practices Act (FDCPA), the Telephone Consumer Protection Act
(TCPA), and the regulatory authority of the Consumer Financial Protection
Bureau (CFPB);
• legal requirements and restrictions for collection outreach; and
• best practices in obtaining consent for debt collection communications.
Compliance Landscape
Collection organizations and agencies are under intense scrutiny concerning the manner
in which they contact consumers, and compliance risks are at an all-time high. There are
many different statutes and regulations enforced at the federal and state levels. Additionally,
collection organizations often have their own internal governance rules.
Compliance efforts can be complex and time-consuming. At the least, collection agencies
should have a communications strategy in place to control the frequency of outbound
communications, manage mobile opt-ins, and ensure proper disclosures.
Non-compliance can result in huge penalties, depending on the statute or regulation that
may have been violated. Litigation is expensive and potential damages are often in millions,
particularly where class actions are concerned. Not only can these cases result in negative
publicity and hamper communications with customers, but they can also negatively impact
long-term customer relationships.
Compliance Tips
for Outbound Debt
Collection Communications
Meeting FDCPA, CFPB and TCPA Requirements
TABLE OF CONTENTS
Introduction...........................................1
Compliance Landscape...................1
Best Practices......................................3
Genesys Solutions............................5
Conclusion.............................................9
For More Information.......................9
Contributor............................................9
BUSINESS WHITE PAPER
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Debt collection is one of the most regulated industries, with a myriad of rules and regulations
governing who, how, and when debtors can be contacted. In the United States, the “Big 3”
compliance rules and regulations impacting outbound debt collection communications are the
FDCPA, TCPA, and rules implemented by the CFPB.
The FDCPA: The FDCPA statute was enacted in 1977 and is enforced by the Federal Trade
Commission (FTC). It governs practically all aspects of third-party debt collection, including how
and when collection agencies and debt buyers can communicate with debtors. The FDCPA
restricts the form, timing and substance of consumer debt collection communications, with
significant focus on prohibiting deceptive, harassing, or abusive conduct. The statutory fine
is $1,000 per action.
The TCPA: The TCPA statute was enacted in 1991 and is enforced by the Federal
Communications Commission (FCC). It regulates and restricts the use of automated technology
to initiate outbound telephone calls. Different rules apply depending on whether the telephone
number called is residential or mobile. For residential, the TCPA regulates calls that are initiated
using an artificial voice or prerecorded voice message. For mobile, the TCPA regulates calls
(including text messages) that are initiated using an artificial voice or prerecorded voice
message or made by an “automatic telephone dialing system” (i.e., autodialer). The TCPA
does not restrict collections calls made to residential phones using an autodialer or calls made
to mobile phones that are manually dialed. There are also Do Not Call provisions and opt-in
requirements for telemarketing and advertising solicitations under the TCPA that are not
applicable to debt collection communications. Over the past several years, there has been a
surge in TCPA class action suits. In California alone, roughly five or more class action lawsuits are
filed per week in federal court. Statutory damages for TCPA violations are $500 to $1,500 per
unlawful phone call or text message, often resulting in lawsuits valued at (and settled in) the
millions of dollars.
Of particular concern for the debt collection industry is obtaining prior express consent to call
debtors on their mobile phones for debt collection purposes. As a best practice and to maintain
the chain of custody, creditors should obtain consent in writing when collecting customer
information and when establishing new accounts. Creditors should specifically request mobile
numbers from customers and provide a disclosure that the consumer will be contacted at that
telephone number in connection with the servicing and billing of the account by the original
creditor, its agents, and assignees.
The CFPB: The CFPB is a powerful new regulatory agency created by the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The CFPB shares
collection oversight with the FTC; however, unlike the FTC, the CFPB has rulemaking authority
under the Dodd-Frank Act. This regulatory authority applies to a host of financial entities in
the marketplace, including both original creditors as well as third-party collectors (unlike the
FDCPA which does not apply to original creditors). It has more than 1,300 employees, more
than half of which are in supervision and enforcement. The CFPB is currently working on the
implementation of new rules that would impact the debt collection industry. This new set of
rules is expected to further restrict how and when debtors may be contacted.
In its short existence, the CFPB opened its complaint database to debt collection complaints
and issued correspondence templates to help consumers respond to debt collectors. It identified
Unfair, Deceptive, and Abusive Acts or Practices (UDAAPs) that debt collectors should avoid.
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It also issued a bulletin providing guidance on how to comply with the FDCPA and the
Dodd-Frank Act, specifically with respect to representations made to consumers regarding
the impact that debt payments will have on credit reports, credit scores, and creditworthiness.
CFPB violations range from $5,000 per day, up to $25,000 per day for a reckless violation,
and up to $1 million per day for any knowing violation.
Best Practices
Maintaining compliance is almost always less costly than fines levied for non-compliance.
Every organization must determine a comfortable balance of risk tolerance, time and effort,
and the costs of compliance.
While no two organizations are the same, there are best practices that virtually every collection
organization should consider. These best practices can help you:
• reduce errors to mitigate compliance risk and costs;
• maintain compliance and enhance the customer experience; and
• improve collection rates and efficiency.
You should obtain proper legal guidance and advice to develop your own compliant contact
strategies. These strategies should not only include steps to comply with all applicable legal
requirements, but should also include the creation of good recordkeeping policies and a
rapid-response complaint system for when problems arise.
In determining what kind of consent is necessary to make automated calls and texts to mobile
phones, you must first understand what “consent” means. The FCC has stated, for purposes of
the TCPA, that providing a cell phone number to a creditor (e.g., as part of a credit application)
reasonably evidences prior express consent by the debtor to be contacted at that number
regarding the debt. In other words, “persons who knowingly release their phone numbers
have in effect given their invitation or permission to be called at the number which they have
given, absent instructions to the contrary.”
Clear disclosures to consumers on the purpose and nature of calls that will be made and by
whom as a result of voluntarily providing their telephone numbers, though not legally required
for debt collection calls, would provide your business with greater protection against complaints
and lawsuits and would help manage consumer expectations. Consumer-friendly disclosures
tend to withstand judicial scrutiny and help businesses defeat lawsuits when they arise,
especially when consumers are required to affirmatively acknowledge and agree to the
disclosures, such as by manually checking a box, initialing a clause, or signing a document.
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It is important to remember that consent once given can be revoked at any time. Judge
Easterbrook of the Seventh Circuit Court of Appeals has stated that “there can’t be any
long-term consent to call a given Cell Number, because no one—not Customer, not Bystander,
not even the phone company—has a property right in a phone number.” Though the law is
not entirely consistent in this area, the recent trend with respect to consent under the TCPA
is that consent can be revoked orally or in writing. In contrast, consent not to be contacted for
debt collection purposes under the FDCPA must be in writing. Verbal revocation is not sufficient
under the FDCPA.
Best practices include:
• Attempt to obtain consent at the outset of the consumer relationship, or during
if necessary, but always before making automated collection calls to mobile devices
• Obtain consent from consumers to make automated telephone calls in writing if possible.
Alternately, agents can ask customers for permission to contact on their mobile device
• Use clear disclosures: name the specific creditor, consider naming third-party debt
collectors or other agents, consider naming assignees/assigns that may collect the debt,
disclose the purpose of the calls, and consider disclosing to consumers that they will
receive calls initiated with an artificial voice or prerecorded voice message and/or
calls/texts by an autodialer
• Make clear that telephone calls will be made to telephone numbers voluntarily provided
and specify text messages if text messages will also be sent
• Require consumers to affirmatively acknowledge and agree to any disclosures
• Be aware of number portability, particularly from residential to mobile, and engage a
vendor to identify mobile telephone numbers prior to making automated calls
• Immediately cease contact to a mobile number when a consumer either cancels their
mobile phone service or revokes their permission to be called
• Leverage speech analytics to help drive agent compliance
Methods to obtain consumer consent under the TCPA include:
• Traditional paper form: purchase agreements, sales slips, credit and loan applications
• Website: online purchase or sale; login or sign-in process
• Telephone: customer service calls; phone keypress, IVR, voice recording
• Text messages: user initiated and double opt-in consent recommended
• Email: replies to email; redirect consumers to company-controlled website
• Mail: postcards; account statements
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In regard to the CFPB consumer complaint database, best practices include:
• Register to know what information the CFPB is receiving about the company
• Respond to complaints within 60 days, as required, or earlier, if possible
• Identify patterns in the complaint data to identify potential loopholes in the company’s
compliance strategy
• Address compliance issues quickly and implement market actions, as appropriate, to help
moot private actions and minimize penalties arising from a regulatory investigation or
enforcement action
Speech analytics is quickly gaining momentum as a tool that you can use to further reduce
compliance risk. Best practices for leveraging speech analytics in collections include:
• Evaluate and measure agent compliance systematically
• Analyze call recordings to identify key words and phrases that must be disclosed to a
debtor, such as the mini-Miranda, that the call is being recorded, and the name of the
company they are calling from
• Use insights from speech analytics to focus training on agents who are not performing to
standard and thus help to avoid future compliance issues
Genesys Solutions
Successful contact centers deploy solutions that positively impact operations and drive
profitability. Genesys Proactive Customer Communications solutions enable your collection
organization to send outbound communications over a variety of channels, including outbound
IVR, dialer, email, and text messaging. Delivered across cloud, on-premises, and hybrid
deployments, Genesys outbound solutions are proven to maximize the return-on-investment
of debt collection efforts by increasing contact rates, improving agent productivity, reducing
costs, and providing a better customer experience.
To meet governance requirements and maintain compliance your collection organization must
also deploy solutions that minimize risk, increase control, and simplify compliance efforts. For
example, the Genesys Cloud Dialer allows you to seamlessly identify landlines versus mobile
devices, which in turn enables you to create different treatment strategies that allow various
techniques, such as predictive dials to landlines and manual mode for mobile devices.
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Genesys includes a robust suite of self-service compliance controls as part of its cloud-based
Proactive Customer Communications solutions that enable you to create custom outbound
campaigns. These industry-leading tools simplify and enable compliant outbound contact
strategies throughout the compliance lifecycle:
• Avoid contacting ineligible numbers through automated campaign filters, suppression
lists, mobile identification, and integration with mobile opt-in databases.
• Control contact frequency with self-service rules builder to limit contact frequency
across channels for a specified timeframe as well as set “do not contact” dates and
geographic rules.
• Track consumer mobility and phone portability to ensure proper outreach during
allowed hours only with safe contact windows, time zone detection tools, and regional
dialing rules.
• Manage customer opt-in database by growing, storing, and integrating your
mobile opt-in list into outbound campaigns, including the continued processing of opt-in
and opt-out requests, removal of deactivated numbers, and offering an automated
opt-out mechanism.
• Ensure agents adhere to requirements through call recordings, monitor-coach-barge
control, and speech analytics.
COMPLIANCE
Genesys Provides a Suite of Compliance Controls That Enables Clients to Create Custom Outbound Campaigns
Simplifying Compliance,
Increasing Results
One customer who chose
the Genesys Cloud Dialer
with outbound IVR, predictive
dialing, and preview dialing
for collections calls, was able
to simplify internal compliance
efforts and reduce compliance
risks through the self-service
compliance controls provided
in the platform. These features
included: restricting contact
attempts to state-specific
safe dialing windows; using
preview dialing mode to call
mobile numbers, and limiting
contact attempts to five calls
and one voice message per
day. In addition to simplifying
compliance efforts, this helped
to decrease agent headcount
by 20% while increasing the
amount of debt recovered per
agent by over 100%.
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You can further increase control over outbound communications compliance with the
Genesys dynamic rules builder, which delivers maximum flexibility and responsiveness to
changing requirements, and lets you validate that your rules are working properly through
built-in auditing and reporting. The Genesys rules builder allows you to customize outbound
campaigns and meet continually changing requirements by dynamically updating or creating
new rules whenever needed. For example, if a new ruling comes into play preventing calls in
Massachusetts after 4 p.m., you could easily create that rule and quickly put it into the dialer.
Easily Create Your Own Rules With the Genesys Rules Builder
Real-time compliance features cannot be understated. The tools allow supervisors and
managers who listen to call recordings to monitor and coach in real time so they can help
agents stay compliant, including ensuring they are stating the mini-Miranda. Genesys also offers
an integrated speech analytics solution that enables your business to efficiently look at these
recordings and identify places where you may be out of compliance.
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Genesys also brings expertise to help you maximize the size of your opt-in database. We work
with you to incorporate requests for consent into existing customer communications such as
credit and loan applications, account statements, and agent and IVR scripts. We also have deep
experience creating new outbound campaigns designed specifically to obtain customer consent
and grow the opt-in database.
Genesys Brings Expertise to Maximize Opt-ins Using Both Existing Communications and New Opt-in ProgramsA Genesys banking customer
wanted to build their mobile
opt-in database by launching
large numbers of outbound IVR
calls to landlines. Essentially,
they asked their customers
if they would like to have
another phone number on
file and whether the bank can
send text messages and mobile
contacts to those devices. Over
50% of verified customers
provided mobile consent, with
10% providing an additional
mobile number the bank did
not already have on file.
