Say…what are your debt collectors are doing?
Say…what are your debt collectors are doing?
If you use third-party collectors, do you know what they are doing? Using effective and all-inclusive policies and procedures governing debt collection are essential. Monitoring and testing those policies and procedures are necessary to help ensure fair and compliant treatment of debt customers on a continued basis.
There are clear expectations surrounding Fair Debt Collection Practices Act and Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) which clearly states that bank’s customers must be treated fairly, debts are not to be misrepresented, and the collector of the debt is appropriately identified to the customer. Threats or harassment cannot be made to the customer and any action taken, including legal and credit bureau reporting, must be accurately represented.
To make sure treatment is fair and consistent, a bank must ensure policies and procedures used by their collectors (both in house and third parties) address these issues:
- Required verbal and written disclosures which includes disclosing to your customer who is calling and on whose behalf.
- Does the collector have the customer or the authorized person on the line and advise the person that the call may be monitored and recorded?
- The Mini-Miranda warning must be given verbatim, “This is an attempt to collect a debt and any information obtained will be used for that purpose.
- There are other state specific requirement surrounding debt collection so to ensure compliance a grid may be used that outline these specific requirements when calling customer in all applicable states.
- Specific scripts for the collector should be utilized that give clear guidance to collector to ensure debt is being collected fairly and accurately, and no threats or harassment are in the conversation.
- Periodic monitoring of calls and written communication should be reviewed for each collectors. Share results with collectors to ensure concerns and issues are addressed in a timely manner.
Effective monitoring of policy and procedures will help ensure fair and compliant treatment of debt customers on a continued basis. The bank can use various tools to manage this emerging compliance risk.
To read more about the fair debt collections, please visit, https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text
Say…what are your debt collectors are doing?