Collection agencies are working on shrinking margins due to lower liquidation potential caused by many factors including increased or unclear regulation. No creditor wants to pay more in cost, because they are most likely working on smaller margins too. So what is the answer? Creditors and Collection Agencies have to work together and demand an environment that allows for more effective and less expensive communications with debtors.
Collection Agencies cannot continue to rely on sending printed letters through the US Mail Service and calling land-lines and expect to still be in business a decade from now. Younger generations of debtors require a different collections approach, and those generations are becoming a larger portion of everyone’s customer base. The FDCPA, as most of you know, is a law that regulates our industry. It was created in the 1970’s and is in dire need of updating and clarification due to changes in technology. Additionally, every state has different requirements that make national collections more difficult. Even the most diligent agencies have a hard time complying with all the legal landmines found in our ever changing environment.
Consumer (debtor) protection will not be negatively impacted, but rather improved because consumers will be contacted in methods that they prefer. I think most debtors would prefer to get an email or text message or be able to contact an automated/virtual system than receiving a call from a collector. Collectors will always be needed. Doesn’t it make sense for all parties involved to utilize the technology of today?
This is where help from Creditors, meaning hospitals, banks, retailers, utility companies, municipalities, commercial businesses, etc. is necessary. Legislators are more likely to listen to these types of companies, than collection agencies. We must work together to change the environment and make it easier to operate, without causing more harm to consumers. It is time to pay attention to the issues affecting the collection industry and get involved with your government representatives as all parties involved, creditors, consumers, and collections agencies will benefit.