Not getting the debt collection results you want?
If your collection agency is using outdated communication methods, that could be the problem.
Research shows that more and more consumers prefer digital channels, like email, SMS, and chat, over traditional calls and letters.
While most businesses have implemented digital communication in some form or another for a better customer experience, collection agencies are lagging behind.
As calls and letters become less effective, thanks to changing consumer preference and call blocking, it’s more important than ever to choose a collection agency that has adapted to the changing times.
Here’s why:
Research has shown that consumers increasingly prefer digital channels over traditional ones.
In addition, they want this experience to be seamless across channels, without the need to repeat themselves if they switch from voice to email to text and back.
Companies who don’t provide this seamless, omnichannel experience will have trouble competing. The same applies to debt collection agencies.
Yet, collection agencies still have a long way to go to meet this demand.
The 2020 TransUnion Collection Industry Report shows that 90% of collection agencies are still using letters and phone calls as their main source of communication, with only 59% using email and a mere 22% using SMS.
“Younger consumers especially prefer to deal with their debt through a payment portal, rather than call back and provide payment info over the phone,” says the report. “If we don’t come up with new ways to communicate with consumers, the entire industry will die off.”
One reason agencies have not adopted digital channels is due to compliance concerns.
With strict regulations regarding consumer communications in the US under the FDCPA, and insufficient guidelines from the Consumer Financial Protection Bureau (CFPB) for digital communication, many agencies have been hesitant to take the risk.
The good news is that this is changing.
After over 40 years with no changes to the FDCPA, the CFPB has finally released its final debt collection rule confirming that debt collection agencies may use email, text messaging (SMS) and private social media messaging to contact consumers regarding their debts.
“With the vast changes in communications since the FDCPA was passed more than four decades ago, it is important to provide clear rules of the road,” said former CFPB Director Kathleen L. Kraninger in the press release. “With this modernized debt collection rule, consumers will have greater control when communicating with debt collectors.”
“With this modernized debt collection rule, consumers will have greater control when communicating with debt collectors.”
The rule provides much-needed guidelines to help reduce compliance and legal risks, while catering more to consumer preference.
As a forward-thinking agency, Cedar Financial was an early adopter of omnichannel, digital collections.
With help from our compliance and legal teams, we’ve been sending out compliant email and text communications, with great results:
At Cedar Financial, we take consumer preference seriously. We understand that as technology changes, so should we.
We’ve adopted cutting-edge digital collection technologies to help our clients achieve the best success possible for their accounts:
With multiple avenues to communicate and pay, consumers can get the support they want and resolve their accounts the way they prefer for a more positive payment experience.
Regardless of what channels we use for communication, our People First Approach ensures that customers are happy with the service they receive – and you are happy with the results.
*The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.
