4 reasons why compliance needs to be embedded in a modern day debt collection agency

There’s a widespread misconception that DCAs use aggressive techniques to collect debt. 

This couldn’t be further from the truth, in fact, in this day and age compliance is a key driver in running a successful Debt Collection Agency.

In the UK, compliance in the financial services sector is a set of rules and regulations put in place by the Financial Conduct Authority (FCA). The overarching aim is to protect consumers and investors whilst also ensuring the markets are fair and transparent. Other industries also have different regulations in place with similar themes around Debt Collection and the fair and reasonable practices that companies must abide by.

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Failure to follow these rules can result in large fines and suspension of licenses for both the creditor and the DCA. Adherence is crucial and a given. However, using the regulations as a strategic tool for the benefit of every stakeholder is where a DCA can add real value to their service offering.

In this blog we’ve listed the top 4 reasons why we embed compliance in our culture: 

Trust and confidence

A DCA that can prove their track record will build trust with clients from the outset.  After all, it’s the client that brings the customers, so the DCA needs to make sure that they are taken care of and have strong internal systems in place to manage and exceed their client’s expectations.

Something as simple as showcasing partnered regulatory bodies badges and certifications on their website can act as trust indicators to build confidence, and then the important next step is to highlight practical implementation through case studies, testimonials and live examples.

Building better processes

Taking adherence to the next level can help organisations build superior internal processes.

We’re all aware of the FCA’s DISP Rules and the deadlines set by the ombudsman in regards to handling complaints. But are you aware of how your DCA sticks to these rules?

A policy and procedure will be created and made available during due diligence meetings, but: What further controls are in place? And do these rely solely on people to make the correct decision at the correct time?  Are complaints logs still managed through spreadsheets for example?

At CRS we’ve built a bespoke complaints management system called Redwood. Complaints are managed in one place with triggers to senior members of staff when deadlines are due. Reporting is easy and adaptable to ours and our clients’ needs and not reliant on manual intervention.

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Benefits the client’s brand

We all know that customer experience is crucial when developing business strategies – with regulatory guidelines helping to further protect customer interest. By partnering with a DCA with rigorous processes you will be acting in the best interests of your customers by improving their experience.

A good DCA will develop a seamless service for your customers by adapting to your market. For example, if your route to market is online, your customer will expect tools to manage overdue accounts online too. Customers should not be forced down a route that is unfamiliar to them (such as excessive calling & letters). Friction caused by the unfamiliar contact methods will, in our experience, generate a larger number of EODs (expressions of dissatisfaction) and complaints.

A well thought out process will ensure your brand identity remains and the relationship with the Customer continues untarnished – ultimately making them more likely to rehabilitate.

Avoid risk and reprisal

Companies operating in regulated industries need to comply with regulations to avoid reprisal. The natural inclination would be to manage processes yourself in order to stay in complete control.

This would be understandable, however, not so simple when it comes to collections.The policies, procedures, systems and expertise that have been built up over many years by DCAs would be hard to replicate. Especially when your resource is aligned to focus on your core business activity.

The alternative would be to use an experienced expert with a set of agreed KPIs and controls that give you comfort from an audit and risk standpoint.


Final words from CRS

Quality and compliance are at the core of everything we do.

We are proud to promote our implementation of a rigorous Policies and Procedures Programme for our clients’ customers. We also have the relevant badges to prove it – culminating in a win at 2019’s CCS awards as an industry leader for Best Conduct & Culture.

To find out more questions a modern Debt Collection Agency must answer click here