Collector - September 2017 - 36

TECHNOLOGY

The Importance of Data Quality
Demystifying the new regulatory demands on the collection industry.
By David Pauken

L

ast year, the Consumer Financial
Protection Bureau issued its outline
of proposals under consideration for
third-party collections, which included a
section on information integrity. It noted
that the most common debt collection
complaints have to do with collectors
seeking to recover from the wrong person
or collect the wrong amount.
The CFPB found that the two main causes
of these errors are deficiencies in the quality
and quantity of information collectors receive
and lack of information in the initial notices
consumers receive. The presence of these issues
has also been reinforced by many of the consent
orders issued by various regulatory bodies.
According to a recent WebRecon report,
44 percent of the complaints to the CFPB
in 2016 were about continued attempts to
collect a debt not owed, 29 percent were
about disclosure verification of a debt and 11
percent were about communications tactics.
Within the information integrity area,
the CFPB is considering three major
interventions. The first outlines that
debt collectors must substantiate claims
throughout the collections process-when
indebtedness is initially filed, during the
course of collections and before filing
litigation. The second states that the
information one collector gathers from the
consumer must be passed downstream to
any other collectors. Finally, collectors must
provide the consumer with an approved Fair
Debt Collection Practices Act validation
notice and a statement of rights.
Across the board, data integrity issues
are the primary forces driving the debt
substantiation and information transfer
initiatives. Major issues occur when
underlying documentation does not support
the balance placed or sold, when a third
party is missing a key fact generated by
another third party (such as a do-not-call

36

number), and when third-party balances do
not agree with underlying documentation.
Because substantiating a claim often
requires numerous different documents, such
as statements, credit applications and note
agreements, there's plenty for collectors to track
in order to meet the data integrity standards.
Collectors can implement a system to
manage, track and transfer their information.
While these tasks have traditionally been
handled manually, installing software
systems can allow collectors to keep a digital
record of all necessary documents and data.
These systems also enable collectors to show
they are invested in improving customer
treatment by carefully coordinating and
tracking their interactions with credit
issuers to ensure there are records of all
communication and proper oversight.
Finally, establishing standards across
the collection agency for tracking
customer interaction will ensure these are
properly documented.

Regardless of the uncertainty around the
terms and details of pending regulation,
those who establish a secure system to
ensure data integrity now will be able
to more easily navigate the regulatory
environment in the future.
As pressure on credit issuers and
collection agencies increases to address
these complaints, the credit and
collection industry needs to understand
and prepare for the potential changes
pending regulation will create in debt
collection.
Despite the uncertainty surrounding the
proposed regulations, by identifying key
initiatives that may affect the industry and
taking steps to tackle them in advance, credit
issuers and collection agencies can protect
both consumers and themselves.
David Pauken is CEO of Convoke. He
can be reached at (571) 858-4711 or
dpauken@gmail.com.

ACAINTERNATIONAL.ORG


http://www.ACAINTERNATIONAL.ORG

Table of Contents for the Digital Edition of Collector - September 2017

Collector - September 2017 - Cover1
Collector - September 2017 - Cover2
Collector - September 2017 - 1
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