Industry Insights
If you think the rules for communicating with customers are complicated now, brace yourself. Things are about to get a lot more interesting, especially for auto finance, mortgage, healthcare, vacation ownership and other companies that service loans and leases, offer payment programs and collect debt.
In early June, the Federal Communications Commission passed a ruling that urges carriers to block robocalls by default. Phone companies already will block these automated calls if asked and paid for by consumers, but the new ruling requires companies to inform consumers of the change and automatically prevent the calls unless consumers opt out of call blocking.
On the upside, the Consumer Financial Protection Bureau is proposing to allow digital delivery, such as email, for compliance correspondence that has historically required print delivery such as collection notices, validation and adverse action letters. However, it’s also proposing to limit the number of weekly calls that debt collectors can make to consumers, how collectors handle any recorded conversations and substantially extend how long collectors must retain account records. The CFPB is accepting comments on the proposed rule changes until late August.
Adapting to the new rules
Of course, even if the federal government changes these rules, companies must continue to abide by other federal laws including the Telephone Consumer Protection Act, Fair Credit Reporting Act, Servicemembers Civil Relief Act and many more.
Nor do the federal mandates exempt companies from complying with the complex web of state disclosure and consumer credit requirements, points out Greg Sheperd, president of Nordis client Meridian Financial Services, a third-party debt collector for the vacation ownership industry.
The new rules will require businesses to adapt their consumer outreach strategies, which collectively seem to encourage more written communications and fewer phone calls. Without any other changes, limiting calls to consumers places a heavy burden on collectors and other companies: “Where we make our money is consumer contact,” says Sheperd. “We need communication with people that’s more timely than regular mail.”
Digital communications could fill that need. “It’s about conversing back and forth, which email and text makes possible. More and more consumers are using these methods to communicate,” he said.
Auto finance company and Nordis client Southern Auto Finance Company, LLC (SAFCO) also sees a strong preference for digital communications. In 2016, just 4% of its customers had given SAFCO consent to send digital statements and other communications, according to Founder, CEO and President George B. Fussell. After a concerted push by SAFCO, the number has climbed to a remarkable 81% today. Similarly, about 1,000 of its 17,000 customers were using automatic payment plans three years ago. The number is now 4,000 and rising.
Leveraging CCM technology
Even without the need to adapt to new rules, Nordis and its Expresso platform helps companies simplify and streamline their compliance communications.
- Omnichannel options enable companies to easily cater to and update customer preferences for receiving statements and other correspondence by mail, email and SMS/text and digital wallet.
- Option for composing and sending various types of emails, including secure emails that require user authentication. (Please see our accompanying article on email for more information.)
- Custom tables allow companies to present only the state and federal disclosures and disclaimers that are unique to each customer (e.g. based on where they live or what type of loan they have)—making it unnecessary to include a long list of disclosures, many of which have no bearing on the customer receiving the letter.
- The archive feature lets companies set timelines and meet legal requirements for retaining records. It’s real-time retrieval capability also is key: “That information has got to be available at our fingertips,” says Fussell.
- Real-time tracking and reporting on return mail, bounced emails, open rates and more—then responding to those situations—is also critical to meeting legal obligations.
“The flexibility that Nordis gives us to update documents and disclosures as the business needs and customer preferences change is critical,” says Fussell.
Meridian, for one, is preparing for change even though all of the rules are not settled or likely to go into effect for some time. “We are putting together plans for all contingencies. If the changes do get implemented, we will be able to react in a timely fashion, and a large part of that is because of Nordis and Expresso,” says Sheperd.