Savvy banks are working hard to comply with the Consumer Financial Protection Bureau's new rule that revises the Fair Debt Collection Practices Act of 1977.
Although the rule, which becomes effective on November 30, 2021, currently only applies to third-party collectors, many of the banks and financial institutions we've talked to anticipate that they'll be expected to comply and are undertaking proactive transformation efforts today. They are expanding their use of advanced analytics to reimagine customer outreach, enhancing support and training for collectors, making themselves more accessible to customers, and automating payment plans. These are all good ideas.
The new rule limits collectors to a maximum of seven attempts at customer contact (including ringless voicemails and limited content messages) within seven days. This means that organizations will need to drive higher recoveries from fewer customer interactions. So, the new rule requires substantial shifts in practices and the adoption of new technologies to ensure compliance.
Improving your collections operation now increases the odds of being top of wallet when customers start paying back their debts. That's especially critical for banks serving customers who have lines of credit from multiple institutions.
Here are a few ideas on how to get a head start on the new rule: