CFPB’s Proposed Rules Would Spur Collections Organizations To Greater Data Accuracy And Insights
The Consumer Financial Protection Bureau’s (CFPB) proposed rule change—which would limit Collections organizations to calling consumers no more than seven times per week—would usher in a new era of optimization in an industry already known for efficiency.
The CFPB's 5/7/19 announcement states that its proposed rules change would:
"…limit debt collectors to no more than seven attempts by telephone per week to reach a consumer about a specific debt. Once a telephone conversation between the debt collector and consumer takes place, the debt collector must wait at least a week before calling the consumer again… In addition, if consumers want to limit ways debt collectors contact them, for example at a specific telephone number, while they are at work, or during certain hours, the rule clarifies how consumers may easily do so."
This rule change continues a drive toward data-quality over data-quantity that gained momentum with the Telephone Consumer Protection Act (TCPA). Auto-dialers became risk factors for non-compliance, rather than hallmarks of efficiency. Under these new rules, collections organizations need to be even more effective with their dials to drive right-party contacts.
In any given month, between 5% and 15% of an organization’s consumer data goes out of date. Within a year, up to 60% of the data may be out of sync. Odds are that a sizeable portion of most Collections organizations’ portfolios contain stale identity data. At best, this degrades right-party contact rates. More likely, this exposes the organization to regulatory liability.
Collections companies that score and prioritize consumers’ phone numbers for viability are more likely to increase their right-party contact rates.
Once the best phone numbers are identified—including confidence in their liveness — collections companies need to determine the day of the week and time of day when consumers are most likely to answer their phones. With data about consumers' usage of their phones integrated into your system, you improve your chances of getting through to the right party and collecting a payment, while remaining compliant.
We believe that Collections organizations will benefit from two phases of ‘tuning.’ First, score and prioritize phone numbers by the likelihood of a right-party contact. Cull numbers with a low likelihood; they’re just a waste of resources. Second, with the remaining pool of ‘useful’ phone numbers, analyze each number’s usage patterns to allocate dials for the optimal window of time to call.
Completing those two exercises will improve RPC rates with fewer dials. With that outcome on the table, why wait for the CFPB’s new rules to go into effect?