Collector - March 2020 - 20

Insight From the
CFPB on Texting
At a recent House hearing,
U.S. Rep. Patrick McHenry,
R-N.C., asked if current
regulations allow debt
collection agencies to
text customers, to which
Kathy Kraninger, director
of the Consumer Financial
Protection Bureau, replied,
"Yes," adding that the
bureau's proposed rule
aims to clarify the issue.
"[Under the current or old
rules], a debt collector
could only text a consumer
if that consumer had
provided that number
and communicated with
their creditor via that text
messaging mechanism,"
she said. "That is not
written in statute. Texts
are not in the statute. It's a
real issue and something
that we're addressing in
the rule."
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20

As part of its proposed rulemaking for
the collection industry, the Consumer
Financial Protection Bureau has established
provisions for collectors to use SMS text
messaging when contacting consumers.
However, some early adopters are already
texting and establishing where the practice
is most effective within their operations.
"We recommend a crawl, walk, run
strategy for implementing SMS text
messaging," said Danny Cantrell, CEO and
founder of Solutions by Text, a provider
of text messaging solutions specializing in
several industries, including collections.
"The reason some are not waiting for
the final CFPB rules is because they
understand how to get consent compliantly,
document consumers' opt-in and ensure
they can easily opt out."
Credit Collection Partners, an ACA
International member agency based in
Taylorville, Illinois, has been using a text
messaging platform to communicate with
consumers for approximately a year and a
half. The agency sends both on-demand texts
and scheduled texts using highly controlled
templates, ensuring proper wording and
inclusion of essential opt-out instructions.
On-demand messages occur when a
consumer requests or agrees to receive
account information by text. For example,
a consumer speaking with a collector by
phone may request their balance, account
number, client name and contact, or similar
information. After completing a brief
opt-in process, the collector chooses the
appropriate template, which immediately
delivers the requested information.
Scheduled texts are used to remind
consumers about upcoming payment
deadlines. When setting up payment plans,
collectors ask consumers whether they
would like to receive a text reminder five
days before each payment is due. If they
agree, they complete the opt-in process
and the collector sets the account to deliver

messages as discussed, shortly before each
payment deadline.
"If a consumer promised to pay in three
weeks and has to remember to send that
out without a letter, email or other contact,
it's probably going to result in a broken
promise," said Credit Collection Partners
President and CEO Rick Bonitzer. "Things
happen, people forget and it's probably
a low priority. The purpose of scheduled
reminders is to improve upon the broken
promise success rate. These messages also
include the account balance, so consumers
can see the amount they owe decreasing
over time, which is an added incentive."
Depending on the template used,
some messages contain smart links to the
agency's online payment portal. The links
are designed to work only on the optedin consumer's phone and contain single
sign-on login information, eliminating
the need for the recipient to remember a
password or an account number that would
be otherwise required.
Sometimes a consumer will respond to
an SMS message with a texted question
that requires a response outside of the
established templates. An agency can
designate one or more collectors to have the
ability to "free form" message directly with
the consumer.
"The replies to 80% of text payment
reminders are acknowledgments or requests
to modify their current payment schedules,"
Cantrell said. "These replies by text trigger
critical two-way text engagements. A
trained collector can provide options
and in many cases bridge to a phone call.
Agencies are cautious at first to allow
two-way texting, but quickly realize this
is how the customers prefer to engage and
you have to accommodate this channel of
communication."
Following Cantrell's "crawl, walk, run"
strategy, agencies often begin exclusively
with text templates and then allow select

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Collector - March 2020

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