On October 30, 2020, the Consumer Financial Protection Bureau (CFPB) issued a final rule that “focuses on debt collection communications and gives consumers more control over how often and through what means debt collectors can communicate with them regarding their debts.”
This is the first time the parameters under which debt collectors can operate have been updated regarding modes of communication since 1977 when the Fair Debt Collection Practices Act was enacted.
This means that all financial services institutions that have collections functions (credit card, auto loan, personal loan, mortgage, etc.) will be able to start using new communications methods to collect debts beginning in late 2021.
The one-year compliance period for the final rule should be a period of intense effort by creditors to be prepared to handle these impacts.
Right now is the perfect time to evaluate how you can improve your debt collections.
Perficient has an offering that combines our capabilities in customer engagement, data analytics, and artificial intelligence to provide what we call “empathy at scale.”
This helps our customers:
- Deal with the anticipated wave of debt-related issues after the government stimulus packages come to an end
- Employ new communications methods and approaches to personalize the “debtor journey” and provide a pathway to improved recoveries and happier customers
- Reduce Net Charge Off rates, Loan Loss Reserves and the number of troubled loans sitting on the books
If you are interested in learning more about how we can help, please reach out to me at scott.albahary@perficient.com.
