Debt collection is a regulated industry with many laws and regulations governing how and when agencies can contact and interact with consumers. For industry organizations, complying with the rules and regulations protects reputational risk and avoids potential penalties and fines.
Here are some tips to manage your organization’s compliance:
Stay informed and up to date
Each province and territory is responsible for establishing its own regulations for the debt collection industry. While these regulations share many similarities, they also have important differences. Make sure you know the rules which apply to the jurisdictions in which you are operating.
The increasing use of technology in debt collection means organizations need to stay alert to changes in the laws, regulations and current standards, especially as they related to privacy, technological security and cyber-security concerns.
Collective engagement
The best way to ensure your business is fully compliant is to engage with all stakeholders across the company. If all employees from the executives to your frontline agents understand the rules and regulations that apply to their roles, the more compliant the organization will be and the more trust you will build with your clients and consumers.
Perform regular audits
Performing regular compliance audits ensure that all departments and functions of the organization are compliant. Audits can also provide an opportunity for training and improving company practices, policies and systems which can enhance the consumer experience.
Maintaining your records
Maintaining consumer profiles includes current contact information so consumers can be properly informed of the collection action and the reasons for it. Updating the account history includes keeping a record of consumer contacts and any payment arrangements. Keeping records up to date is key to making sure a collection agency is not contravening any of the regulations about where and when a consumer can be contacted.
Timely response to consumer requests
A complaint against a collection agency or a debt management company of an alleged violation of a rule or regulation is a serious issue. Not complying with the industry regulations can carry penalties, possible legal action and serious reputational risk concerns. Most complaints, however, can be resolved by understanding the consumer’s concern and responding appropriately. Communication is the key to resolving most concerns.
In an industry as heavily regulated as debt collection, a strong compliance culture is a necessity. Staying up to date on rules and regulations, maintaining consumer records and having top to bottom buy-in on compliance, protects your organization, vendors, clients and consumers.
The Wrap
Managing your receivables is an important part of business, just like other assets. It should be calculated and recorded properly, and it can sometimes be a difficult task to manage internally. Outsourcing your debt recovery can offer some smart and timely alternatives. Canaccede Financial Group is the largest multi-asset acquirer in Canada. We provide both debt servicing and purchasing solutions. Our expert valuation team can work with you to size the debt recovery potential for your organization. If you, or someone on your team, would like to find out more, please contact us a partnerships@canccede.com .
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