Debt Collection and Consumer Advocacy Under the New Proposed Rule

Debt Collection and Consumer Advocacy Under the New Proposed Rules

Unclear, outdated guidelines and contradictory court rulings make debt collection compliance hard. That’s why so many industry professionals have been eagerly reading the CFPB’s new proposed debt collection rule. Clarity on expected procedures and how to use updated technology are giving collectors hope for a more direct way to fully comply.

However, it became apparent during the CFPB Debt Collection Town Hall earlier this month that consumer advocate groups aren’t entirely happy with the proposal. Concerns about bad actors abusing call caps, text message and email are causing representatives of these consumer groups to worry.

Debt Collection and Consumer Advocacy Have A Common Goal

What consumer advocates may not realize is that they are not in opposition with debt collectors. Actually, both parties are working toward a common goal – to help consumers improve their financial situations.

A common aim among collectors is to make resolving debts a quick, easy and compassionate process for consumers. This theme appears constantly during webinars and presentations within the industry. Here are just a few examples.

Empathy in Debt Collection

In a recent webinar from, care for the consumer played a major role. The topic, “Speaking The Language of Different Generations When Collecting,” began by helping agents identify ways to improve collection techniques based on a consumer’s age. However, the panelists spent most of the hour stressing how important it is to offer consumers the options they need without making any judgments.

They all agreed the best way to do this was to practice empathy. Really listen to each consumer. Offering individuals the help they need resolves debts faster, makes people feel heard and puts them in a better financial position once their obligations have been addressed.

Debt Collection and Consumer Advocacy Under the New Proposed Rules

Consumer Advocacy

Another example of the care debt collectors have for consumers was apparent in a presentation by Leslie Bender, Chief Strategy Officer and General Counsel at BCA Financial Services, early this year. She spoke to the Collector Live audience about using conversational intelligence in debt collection. Bender began the presentation by explaining two basic truths:

  1. Collection agents are problem solvers
  2. Collection agents are consumer advocates

There are many consumer advocacy groups that work to help individuals get debt under control. Collectors, however, are in a unique position to speak to consumers one-on-one about the circumstances of each debt they owe. Agents can help people understand their options and resolve these difficult situations.

Collector Training

Consideration for consumers is even built into training at agencies across the country. Agency owners often credit their successes to training collectors to treat consumers with respect. When asked how to keep morale high in his award-winning call center, Jeff DiMatteo, owner of American Profit Recovery explained.

Our team members go into every call with the goal of helping a consumer. The satisfaction of doing that many more times than having a bad call makes them easier.Jeff DiMatteo

Kelly Parsons-O’Brien, past President of the California Association of Collectors and President of Pacific Credit Services also trains agents in ways to improve their communications with consumers. She even devised a three-step system to make sure consumers feel heard.

  1. Validate their concerns - Let the consumers know their thoughts and opinions are valid.
  2. Make them feel good - Ease consumers’ minds by letting them know you are there to help.
  3. Tell them what you can do for them - Explain what steps you are able to help them take so they may resolve their debts.
Related Article
Collection Guidelines: Improving Communications with Consumers

Reaching the Goal of Consumer Advocacy

These examples show that collectors already practice mindful communication. The CFPB proposed rule is an attempt at making this communication even easier. By addressing how to properly use new communication preferences (text messaging, email), and giving specific guidelines on validation notices and other topics, the Bureau is hoping to clarify their expectations for collectors.

But the new proposed rule isn’t in effect yet. In fact, there’s a long road ahead before that is true. The rule will be open to public comment for 90 days. Once closed, the feedback will be taken into account while creating a final draft.

To help consumers by improving the debt resolution process, collection agencies must take advantage of this rare opportunity to be heard. Joann Needleman, Practice Leader and Member of Clark Hill PLC, has advice on how collectors may approach the new proposed rule.

  1. Create a go-to group. Appoint a few individuals within your agency to be in charge of understanding how the proposed rule differs from the current interpretation.
  1. Compare the proposal to existing frameworks. Decide what the changes in the proposed rule would mean for your company. Start thinking now about what you would need to adjust.
  1. DO NOT implement new practices yet. Understand that the proposed rule is just that–a proposal. It would be premature to change policies and procedures, as items in the proposed rule aren’t guaranteed to make it to the final cut.
  1. File comments. The CFPB’s final rules will be based on the comments they receive. Be sure to voice your opinion on how the rule would impact collection practices. Don’t miss this opportunity to better the industry for both collectors and consumers.

For up-to-date industry news and information on upcoming webinars on the proposed rule, subscribe to the PDCflow blog.

Subscribe to PDCflow:
Share this post!
Hannah Huerta - PDCflow Marketing Specialist
Hannah Huerta, Marketing Specialist

Hannah Huerta is a Marketing Specialist at PDCflow. She creates content for the accounts receivable and payment industry.

LinkedIn - Hannah Huerta
Related Article
CFPB Proposed Rules: Why Collection Industry Input is Crucial
FDCPA Compliance: Answering Your Questions About Regulation F