Regulation F time preference requirements are a landmine. These requirements could impact up to 30% of industry accounts for creditors and collections agencies alike. Most companies are not prepared to manage them. In this article, you'll find out what you can do right now with your data, your core system, and your strategy to prepare for Reg F and avoid sharp decreases in call center efficiency and revenue.
Restricting the number of calls made on an account is not new - most agencies are already able to set up call caps for specific periods of time and based on account statuses, which will make complying with the 7x7x7 provision in Reg F easier. But, managing time preferences? This provision already existed in the FDCPA, but Reg F has given it new life and not many companies are ready to handle it.
Reg F makes it clear that if a consumer notifies your agency that a particular medium (e.g., email, phone, text) is inconvenient, or that a particular time or place is inconvenient, you must not contact the consumer through that medium, or at that time, or at that place.
If you have to exclude 30% of your accounts because of time or place preferences and you don’t have a system that can handle that, then you’ll be collecting less and your call centers will be less efficient.
The requirement to manage time preference in particular is going to trip up call centers, many of which are just not prepared to collect or act on that data, argues Sascha Ohler, EVP, Research & Development at Neuanalytics.
If you have a call center with 1,000 folks in it and you have to exclude 30% of your accounts from your normal routine because of time or place preferences, and you don’t actually have a system that knows how to handle that, then you’ll be collecting less and your call centers will be less efficient, Ohler says.
What can you do to manage Reg F time preference requirements? Here are 6 strategies Ohler recommends.
1. Don’t automatically mark the account as cease and desist or do not contact
Marking the account as a do not call or cease and desist is not a long-term solution to this problem.
Neuanalytics estimates that between 20% and 30% of accounts will be affected by this provision, so this isn’t a case where you should simply mark an account as “do not call,” or even “cease and desist” to avoid the risk. Plus, interpreting the consumer’s request to contact them at their preferred time or place as a cease and desist or do not contact could be detrimental to the consumer because it prevents them from getting information about their debt. This is especially true if the account is having a negative effect on the consumer’s credit score.
2. Don’t rely plan to rely in the long-term on the account notes section of your CRM
Ohler also adds that while your vendors will be collecting the preferred/inconvenient time data points, “a lot of your [agency] systems, and a lot of the creditor’s core systems don’t have a place to put that data.” In fact, the only place many companies have the ability to store this type of information is the notes section. This leaves the decision to not call during an inconvenient time to each agent that touches the account. And boy, does that sound risky.
3. Evaluate your core system
Do you have a place to store inconvenient time data? If the answer is yes, then the next step is to make sure everyone who will need to enter data in that space knows where it is and how to use it. If you don’t, you’ll need to come up with a plan B for managing that information.
4. Track the data now (as best you can)
Do you have a sense for how frequently your customers provide inconvenient calling times now? If not, you may want to start tracking this data (as best you can) through call monitoring and other resources. While the data you gather might not be complete, it will indicate how high of a priority managing and storing this information needs to be.
5. Work with your vendors
It might be too late to be ready for an 11/30 implementation date, but you should start by contacting your CRM vendor to see if this is on their roadmap. It should be. If it’s not, you should ask what it might take for them to add it. It’s going to be an important feature of your CRM, for both compliance and strategy purposes.
6. Talk to your clients!
Credit clients - you need to talk to your agency partners and agencies need to do the same with their creditor clients. Are you both tracking inconvenient/preferred calling times? Is there a temporary way in which you can share the data until your core system can store it? Having this conversation could lessen the impact of this provision from both regulatory and efficiency standpoints.
This conversation matters, not only for your business and vendor relationships, but also for the industry at large. There is a clear disconnect between Reg F efforts among the different players in the industry, Ohler argues.
“Creditors are trying to solve for Reg F; agencies are trying to solve for Reg F; and vendors...are trying to solve for Reg F," he says. "There really hasn’t been a coming together of sorts, to say ‘how do we collectively solve for Reg F in the best interest of the consumer?’”
Starting the conversations outlined above is a good starting point for creditors, agencies, and vendors in the industry to come together and solve this challenge.
Erin Kerr is the Director of Content for iA Strategy & Tech - a digital resource for collections strategy executives - and the Executive Director of the iA Innovation Council. She is a seasoned receivables management professional, with recent experience in digital strategy and a passion for crafting digital solutions for a better customer experience.