Perhaps the most-oft heard word in the credit and collection industry in the past five years is “compliance”. ACA International, the national trade association of collectors, has provided thousands of hours of education on compliance in that time, offering assistance with documentation writing, policy and procedure composition, and dozens of other topics as debt collectors scramble to implement a Compliance Management System (CMS). Regulation at the federal level, both in the form of the Affordable Care Act for healthcare collections and the Dodd-Frank Act for all other collection activity, has had the greatest impact on the industry since the implementation of the FDCPA in 1978.
These federal regulations came on the scene around 2010, and implementation of various pieces of their laws has been adding to the credit and collection landscape ever since. It is difficult to find creditor-clients who do not value some form of CMS in their agency partners, and many require it. A working CMS will provide written policies and procedures, a training structure, a process-improvement structure, trend analysis, tracking and reporting for all data, and it should be able to demonstrate improvements in efficiency and effectiveness of the company. Additionally, the CMS should be able to demonstrate compliance with regulations, accounting and audits, and client protocols and requirements.
Today’s credit and collection world sees federal and state regulators soliciting complaints from consumers with easy-to-use websites that require no proof or evidence to be submitted. Complaints about debt collections to the CFPB and FTC top 140,000 annually. The FDCPA has fostered a “cottage industry” of attorneys who make their living by threatening and filing suit against debt collectors for highly technical alleged violations, often demanding thousands of dollars for instances where there is no harm to the consumer. Debt collectors have to be vigilant in the documentation and data provided by creditor clients, as well as foster a highly effective working relationship to keep track of payments and adjustments to balances after assignment.
ACA International provides an industry-specific CMS for debt collection agencies named Professional Practices Management System (PPMS). Southern has been a PPMS Certified agency since 2008. ACA International reports having more than 2200 agency members in the U.S. and abroad, but there are fewer than 50 certified agencies! Implementing and maintaining any CMS is a significant undertaking, requiring Continuous Improvement structure plus Compliance requirements for auditing, record keeping, and trend analysis. Any company implementing a CMS must have a significant commitment to the program, and that can be manifold for a collection company that works for healthcare, financial, government, college, rental, retail, and numerous other creditor clients as does Southern.
“Getting it Right” is not something our company pays lip-service to, or has attained for marketing purposes. PPMS is in the very fabric of our company and is a driving factor behind our Mission of “Betterment”. Southern is a small business, employing about 30 people. Two of those people work in Quality Assurance and Compliance full time! Our job is very difficult, but for reasons many people do not think about. The technical and legal requirements, regulatory pressures and threat of litigation is significant and omnipresent. But no one ever said being in the top 3% of your industry was going to be easy!