“What?? How did this happen?!” You’ve worked your tail off for this client. You’ve always been first or second in batch track performance, and you get along great with the recovery manager.
OK, so you seem to be getting sued more often and you’re spending more time answering complaints. But that comes with the territory, right?? What about all the money you’ve collected? Doesn’t that count?
Not so long ago, the amount your agency collected determined how much business you’d receive in the future. Not anymore. If you don’t live up to their compliance standards, then you’re not going to receive any future business, regardless of how much you’ve recovered in the past. Your competitors have learned this lesson well.
If you don’t live up to their compliance standards, then you’re not going to receive any future business, regardless of how much you’ve recovered in the past.
Collection partners are now held to the same compliance standards as other third party organizations, including credit bureaus, data providers, and others whose actions could subject the creditor to potential vicarious liability.
Sophisticated compliance scorecards are being developed and implemented to assess the comparative risk of one partner versus another. Maybe you’ve let a few licenses lapse and you’ve only been carrying the minimum E&O insurance, with no TCPA coverage. No big deal? Think again. Collection agencies are now routinely being “fired” by longstanding clients because the risk they represent isn’t worth the financial reward they provide.
Where should you focus your attention?
- Get and stay licensed and registered in all jurisdictions where your agency could receive placements. Many major clients no longer accept exemptions, and they often require that an agency is registered in all states. Independent initial and ongoing audits/assessments are becoming standard practice.
- Obtain more comprehensive E&O and cyber liability insurance coverage. Expect regular independent audits to ensure protection against potential vicarious liability.
- Minimize exposure to lawsuits for your clients and your agency by scrubbing your files against known repeat consumer litigants and their attorneys.
- Monitor and compare your ongoing litigation and consumer complaints against your competitors. Correct any issues that indicate negative trends.
- Implement and maintain a well-documented compliance management system (policies, procedures, training, enforcement, etc.)
Your clients are taking every precaution to eliminate any exposure to unintended risk. Make sure your company isn’t eliminated in the process. Adapt, adopt and address these issues to ensure that you’re part of their future plans.