Collection Advisor September/October 2017

USING TECHNOLOGY TO EMPOWER COLLECTIONS

4 SOURCES YOU NEED TO SEARCH THE INVISIBLE WEB ARE WE ABIDING BY “SUBJECTIVE COMPLIANCE?” HOW I HANDLE FEDERAL AND PRIVATE STUDENT LOAN COLLECTIONS CFPB FALSE ACCUSATIONS OR REAL PROBLEMS? MAKE LIKE THE CUBS AND WIN FOR COLLECTIONS DEBT BUYERS ARE NOT DEBT COLLECTORS FOR FDCPA CFPB ARGUES INCORRECT DEBT AMOUNT TO LAWYER VIOLATES FDCPA EXCEEDING DATA SECURITY REGULATIONS STATISTICS YOU NEED FOR DIALER CAMPAIGNS

PATIENCE WINS IN MEDICAL COLLECTIONS September/October 2017 Vol. 17, No. 5

Jason Meyer

Collection Advisor P.O. Box 92342 Southlake, TX 76092

WHAT’S COMING IN MEDICAL COLLECTIONS

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Sam Eidson

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Sam Edens

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Ron Brown

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Nick Jarman

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Debra J. Ciskey

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Fred N. Blitt

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Harry A. Strausser III

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MEDICAL COLLECTIONS

e m o c l e W H

ealthcare has been a frequent topic in many headlines recently. This means in the months to come, medical debt collection professionals will likely be facing more adjustment and fluctuation in the vertical. Fortunately this issue of Collection Advisor is focused on healthcare and how to get ready for the possible storm ahead. This issue’s Agency Spotlight charges in this direction by talking to Jason Meyer, CEO of Frost-Arnett about maximizing recovery while maintaining the patient experience.

Agency Advisor Sam Eidson compares federal and private student loan lenders providing a helpful overview of both. Compliance Advisor Debra J. Ciskey displays a problem with the CFPB’s way of tabulating complaints and what this misunderstanding could mean for collection professionals. Legal Collection Advisor Fred N. Blitt loves the Cubs, and who wouldn’t after their World Series victory? Blitt cites some examples from the Cubs on how collections could benefit from a similar change in mindset. Skip Tracing Advisor Ron Brown continues his venture through the invisible web and points out some valuable sources not found by many skip tracers. Benchmark Advisor Harry A. Strausser III provides some useful and simple tips on how to maintain clients to ensure long-term prosperity in collections. Technology Advisor Sam Edens knows you have many documents your collection software has difficulty deciphering. He provides instructions on how to process PDFs and image files in your system. Collection Industry Advisor Nick Jarman discusses the difficulty of working with “subjective compliance” and offers some advice to help work with the uncertainty.

It took the Supreme Court in Hensen v. Santander (pronounced sahn·tahn·dare) to clarify debt buyers are not subject to FDCPA. Santandare is the U.S. branch of Spain’s Banco Santander, the largest bank in the eurozone.

Next issue we will be taking a closer look at telecom collections and exploring techniques to improve performance.

We will also be taking a closer look at high-end collection software, electronic payment solutions and the increasingly popular virtual collection software. Until next time, we look forward to hearing from you.

Payscout............................................................Page 28 Collect!................................................................Page 28 VoApps...............................................................Page 28 Quantrax...........................................................Page 29

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September/October 2017

T. Steel Rose

CPA, ACS Editor

editor@collectionadvisor.

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USING TECHNOLOGY TO EMPOWER COLLECTIONS

ADVISORS 4

AGENCY ADVISOR

How I Handle Federal and Private Student Loan Collections Sam Eidson 6

TECHNOLOGY ADVISOR 3 Ways to Improve Conversion of PDF and Image Files Sam Edens

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Volume 17, No. 5

Business Directory

September/October 2017

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Patience Wins in Medical Collections Jason Meyer, CEO of Frost-Arnett

Predictive Dialer Roundtable Statistics You Need For Dialer Campaigns

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JOSHUA FLUEGEL

Medical Collection Software Roundtable

What’s Coming in Medical Collections

Comparison Chart

COMPLIANCE ADVISOR

Sealing the Deal

JAN STIEGER AND MARK NAIMAN

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Harry A. Strausser III

SYE T. HICKEY

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Are We Abiding by “Subjective Compliance?”

Nick Jarman

BENCHMARK ADVISOR

CFPB Argues Incorrect Debt Amount to Lawyer Violates FDCPA

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COLLECTION INDUSTRY ADVISOR

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Make Like the Cubs and Win For Collections Fred N. Blitt

BRIAN C. MITCHELL AND CLARK A. DONAT

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4 Sources You Need to Search the Invisible Web Ron Brown

LEGAL COLLECTION ADVISOR

Exceeding Data Security Regulations

SKIP TRACING ADVISOR

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Debt Buyers are Not Debt Collectors for FDCPA

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8

False Accusations or Real Problems?

Debra J. Ciskey

FEATURES

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How I Handle Federal and Private Student Loan Collections ROUTING SLIP

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Many are concerned that our nation is heading in the direction of another financial crisis. Almost 10 years since the great recession involving sub-prime mortgage loans, we could be facing another collapse due to the excessive amount of student loan debt affecting over 44 million Americans owing more than $1.4 trillion. That’s about $620 billion more than the total U.S. credit card debt and it’s getting worse with over 3,000 student loans going into default every day. Former students with and without a degree have become distressed borrowers needing asSam Eidson sistance. The accounts receivable management profession plays a vital role in helping these borrowers resolve their unpaid debt.

While both federal and private student loans offer high volume, claim to not have their checkbook I advise them that I can get consistent placements and larger average size balances, there are the routing number so long as they know their account number. many differences between the two. Today we discuss some of If they claim to not know their account number I immediately the differences and our collection respond saying, “that’s okay, we can approach for each product. make an exception and set it up via Over 3,000 student loans go In most cases the student debit card. Go ahead with your card doesn’t have credit history in order number as soon as you’re ready.” I into default every day. to qualify for the loan on their own. have found success with the aforeOften their parent or grandparent mentioned collection approach for will cosign for the loan. Initially I attempt to reach the former all types of debt throughout my career. student in an effort to set up a repayment plan. Once I make Federal loans offer income-based payment plans so colleccontact I set the tone by demanding the balance. After I have tors are able to offer various options to the borrower. Unlike the borrowers attention I then update their full and complete in- private loans the statute of limitations doesn’t apply and many formation. The demographics I update are: the mailing address, of the loans are non-dischargeable in bankruptcy. Federal loans phone numbers and, most importantly, their place of employ- can also be recovered by seizing income such as disability or tax ment. I always avoid yes and no questions and ask less important refunds without having to take the borrower to court. questions that lead into the main question I want to ask. For exPrivate loans do not have as much flexibility when it comes ample, I ask if they are working full time or part time. I then ask to repayment plans. To make things even more difficult, the what their occupation is and for whom they work? By starting borrower could be under the impression that they already have with non-invasive questions the borrower becomes comfortable an arrangement to repay the debt. This happens when the fedand you lead them to the answer you desire. eral collector offers an arrangement that is all-encompassing.

If I get the runaround from the borrower or if they do not Unfortunately for the borrower the “all-encompassing” arrangehave the ability to pay, I head straight to the co-borrower. Even ment does not include their private lenders. If collectors are unthough the co-borrower signed their guarantee they really don’t able to resolve the loan on a voluntary basis with the borrower, want to pay for the loan. They have their own expenses and did private lenders may have to take the borrower to court and get not expect for the loan they guaranteed to go into default. It’s our a money judgment in order to use garnishment as a way of coljob to educate the co-borrower and advise them why it’s impor- lecting. Once a judgment is in place the lender can also force tant for them to accept responsibility and repay the loan. Once the liens on the borrowers’ assets. This approach may be necessary as borrower or co-borrower has agreed to pay, setting them up on a private student loans are subject to the statute of limitations. secured arrangement is of the utmost importance. When demanding payment I give them the options that are best suited to resolve Sam Eidson is the Director of Compliance for Delta Outsource the account. I advise them that we can set the arrangement up via Group, Inc. He also serves as Secretary for the Missouri Collectors checking or savings and ask which option is best for them. If they Association.

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Agency Advisor

September/October 2017

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3 Ways to Improve Conversion of PDF and Image Files

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It can be argued that a large percentage of hospitals and medical facilities are using technology decades behind present-day patient and billing management systems. Agency owners are reminded of that debate every month when their new business file is once again delivered in a PDF file or even worse, a scanned image format.

The painstaking process of manually entering every account and patient record resumes. Inefficiencies aside, the element of human error is ever-present and the probability of it is very high. It will not take much for someone to mistype a patient account number, procedure code, patient balance or some other critical data element. When asking your client for an electronically formatted final, you are left with a response something like, “we are working on it” or simply “no.” What else can be done?

A simple Internet search will result in a seemingly endless list of options. It’s not likely you will find a solution that works or more importantly, works for your use case. Essentially, the options fall into three different categories, which are listed and detailed below. If you are not lucky enough to stumble upon the perfect solution, consult with your end users and IT staff or vendor to understand the process of getting the data from the unstructured format into the collection software. This type of conversation will help direct you to the most logical path.

First

The most ideal option is working directly with the PDF or image file to electronically extract the data. This method does not mean the task can be completed without additional software.

Rather, it means working with the raw file (source of the data).

One positive attribute of the PDF or image file is that is has structure. This is obvious because it most cases, you can see it. The picture is clearly organized into columns and rows, usually with headings and summaries as well. Copy and paste is a common mistake. Any structure that was there is immediately corrupted.

This lack of structure makes it tough to make sense of the data and you may have unknowingly lost some data during the transition.

Second

The first option assumes you discovered some out of the box software that accurately reads the image file you are working with. There is a second option very much like the first, but involves a completely custom software application to understand and parse the image file. This is going to require a skilled IT staff or services from an outside vendor. With careful analysis of the image file to identify regular patterns, splits, and trends, technologies such as Java or Python can be used to identify and accurately extract the data fields into a more structured and workable format. Many custom developed applications will

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Technology Advisor Sam Edens

output to HTML or XML. This is often easier than trying to move data directly from the image file to Excel or CSV. This output of the data becomes the new source for further processing or for electronically loading into your collection software.

Third

A more extreme option involves utilizing features of next generation tools which may otherwise be of no use to you.

(If these tools are of use to you, it is likely in another division of the business so if you are part of a large organization, check with other departments because they may have something you can utilize.) Big Data technology, like Hadoop, is designed for extremely large datasets and robust environments, uncommon in most agencies, but may have features for reducing image files to understand and extract the data fields. Similarly, some Business Intelligence (BI) tools have features for reading PDF or image file sources, identifying the structure, and accurately extracting the data. For example, one of the latest releases of Tableau contains such features. If you opt for this route, there is a good chance you will find some other cool features and potential use cases for the Big Data or BI technology.

Finding a way to electronically manage PDF and image files is critical. It greatly improves operational efficiency and reduces the risk of human error. An element I haven’t even touched on involves culture and the work environment. In probably all cases, those performing the manual work to key new account and patient information into the system are likely not doing the work they were hired to do and are not doing work that is more rewarding, both personally and for the company. I hope you make it a priority to create an exciting and more productive environment through the elimination of manual processes.

Sam Edens has been with Emprise Technologies since 2006 and is currently serving as Vice President. Prior to his time with Emprise, Sam designed and developed performance and flow management software for UPS. September/October 2017

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4 Sources You Need to Search the Invisible Web

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This will be our sixth and final article in the series related to what is commonly referred to as the “the invisible web.” As I previously stated and again emphasize, these sites are certainly not your beginner or skip guesser sites. Most of them require certain advanced skills to manipulate, massage and extract the data. For the professional tracer to obtain the desired information needed to complete their searches it is imperative that they possess the required skills and a thorough understanding of “exact data extraction techniques.” I have visited and conducted searches on each of these sites to insure they are working and Ron Brown functional as of July 14, 2017.

To briefly refresh our memory, in the past five installments we have been reviewing the vast amount of data search engines educational resource on the Web, simply type in this search usually will not show you without a specific search. The term string to your favorite search engine: site:.edu “subject I’m look“invisible web” mainly refers to ing for” and in most cases your the vast repository of information search will return with only .eduthat search engines and directories related sites.

“But it is also possible that if the whole do not have direct access to, such The invisible web offers a vast site or certain pages are accessible only as databases. Unlike pages on the array of resources to the profesvisible web (that is, the Web you sional tracer on just about anything after registration (even if it is free), can access from search engines and everything. The links we have the site will never appear on Google.” and directories), information in covered in the previous five issues databases is generally inaccessible barely begin to touch the total reto the software spiders and crawlsources available on the invisible ers that create search engine indexes. It is estimated that the in- web. The invisible web continues to grow at an unprecedented visible web is thousands of times larger than the visible web con- pace and utilization by the tracer becomes a great asset. tent. The invisible web contains nearly 550 billion individual Finally, it is important to clarify that the invisible web is documents compared to the one billion of the visible web. also an entity on the move. For example, a site that is not acThe major search engines do not bring back all the “hid- cessible via Google today can be included by the search engine den” content in a typical search, simply because they can’t see tomorrow when Google’s spider visits the site. But it is also posthat content without specialized search parameters and/or search sible that if the whole site or certain pages are accessible only expertise. When a tracer knows how to access this data they are after registration (even if it is free), the site will never appear on provided with much more information.

Google. Like grains of sand in the desert, they are always there Many tracers are not aware of the invisible web and there- but may be constantly shifting in fashion and form. fore are limited to what can be found with common search enHere is a list of some of the most popular searchable sites gines such as Google or Yahoo. There are times when a tracer and search engines for the invisible web and although some of looking for something a bit complicated or obscure cannot find them provide additional metasearch options for searching with that bit of data they are searching for with a common search five, 10 or even more search engines, each of these has its own engine. The professional tracer understands the invisible web is indexing capabilities for invisible web pages. the place they must access to obtain critical data.

I have found that most of the data on the invisible web Direct Search http://www.directsearch.net is considered one is maintained by academic institutions, and has a higher qual- of the biggest and most intensively maintained resources for the ity than search engine results. There are “academic gateways” invisible web. It is not only a search engine, but also a search dithat can help you find this information. To find nearly any rectory with links in many categories. One of its advantages is the

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“When a search for a term is performed, it is submitted to multiple databases simultaneously, so in a sense this is also a metasearch engine.” topical compilations, which are gatherings of links connected to a specific topic — for instance, Almanacs/Factbooks/Statistical Reports and Related Reference Tools.

QueryScoop

http://www.queryscoop. com/ is a multi-search three-step search tool which allows the user to search with multiple search engines including Google, Bing, Yahoo and DuckDuckGo. It is very easy to use and covers any subject for which you desire to search using keywords.

The Invisible Web Livewire-47 Alter-

natives to Wikipedia www.lifewire.com/ alternatives-to-wikipedia-3482764 is a valuable resource for the invisible web because it provides links to over 70,000 searchable databases and specialty search engines. The trick with dynamic

searchable databases is that they are more difficult to crawl. Because of this, they are rarely indexed by major search engines.

When a search for a term is performed, it is submitted to multiple databases simultaneously, so in a sense this is also a metasearch engine.

Geniusfind

http://www.geniusfind. com/ is similar to the now defunct Complete Planet in that it is a database and search engine finder. Although it does not have the rich resources of the other search engines, Geniusfind offers topical search engines and databases. It can be used to locate an engine or a database for a topic of interest, which a searcher can use to perform an additional search.

The all-purpose search engines for the invisible web can be used to directly

find the information in which you are interested. But often it is faster and easier to use an all-purpose search engine to locate a topical search engine or a database. After you find search engines or databases on topics of interest, you can go to the site to see whether they provide the information you need. There are search engines and searchable databases for almost any topic imaginable.

I could list many other invisible web databases, but I think that after providing you with ideas about how to find them, you can make your own list based on your specific needs, so let the hunt begin!

Good luck and good hunting until we meet again.

Ron Brown is a member of the National Association of Fraud Investigators and the author of “MANHUNT: The Book.” Contact him at rbrown2150@aol.com.

Are We Abiding by “Subjective Compliance?”

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What’s left to say; a question so many debt collectors are asking themselves these days. Far too often debt collectors are being told to stop saying certain words, using certain phrases, or watch how the tone of your voice is sounds. There is an ongoing trend of limitation of what debt collectors say that seems to be growing in momentum. I have always been a believer of if a debt collector is told they can’t do something, they must be given a couple things they can do. Nowadays that belief seems to be a distant memory as we try and determine what’s left to say.

Over the last decade we have seen a continuous constrictive trend in compliance for debt collectors during their conversations with consumers. Up until many years ago, what was said to the consumer was the norm as long as it stayed in compliance with the Fair Debt Collection Practices Act. Later on, in addition to FDCPA compliance, the compliance trend moved to ensuring debt collectors remained professional and respectful throughout the entirety of the conversation with the consumer even though many conversations become somewhat confrontational due to consumers being upset about their own financial hardship. Over the last couple years, a major emphasis was placed on the tone of voice collectors used when talking to a consumer and ultimately, remaining in line with a complete customer service approach. With all of that said, we are now seeing the manifestation of what I call “subjective compliance.”

For me, subjective compliance refers to an individual’s own perception or expectation of what may or may not be said. This has put debt collectors, their managers and agency owners in a very uncomfortable and compromising predicament. Debt collectors can be completely compliant with all federal and state laws, company policies and procedures, as well as use an appropriate tone of voice and approach each call with a customer service centric focus. However, now debt collectors may have every single word they use scrutinized by the subjective thought of the compliance individual listening, rather than an objective set of principles and clearly defined expectations.

The reality is no position in the debt collection industry has a more difficult and demanding job than the debt collector. This trend of “subjective compliance” has now made it even harder.

Unfortunately, debt collectors have lost focus on their main purpose, which is to speak with consumers and work out a resolution to a difficult situation. Debt collectors are now trained more than ever on how to speak with a consumer while remaining compliant with all debt collection related laws. Their main focus these days is worrying about whether or not they are saying the right thing or speaking in the right tone of voice so they don’t lose their job. Some restrictions and even unspoken compliance expectations are so heavily placed on debt collectors they no lon-

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Collection Industry Advisor Nick Jarman

ger worry about if they lose their job after a hard day’s work, they worry about whether they are going to lose their job after every phone call they make. That is simply not right and no way to run a business.

How an organization monitors and implements their compliance structure is completely up to them. But successful organizations and partnerships outline clear and objective expectations for debt collectors to be held accountable. Clear expectations have to be within reality as well. Some tend to forget that debt collectors are actually human. Therefore they set their expectations for robots who fail to think for themselves. The fact of the matter is even robots malfunction at some point. I personally think that until someone has actually spent time collecting a debt on the collection floor, especially in our current collection environment, they shouldn’t have a say in any compliance expectations.

Rather than focusing compliance objectives on everything debt collectors can say, the tendency is to focus on everything they can’t say. This route is chosen simply because even those within a compliance role are not sure what debt collectors can say anymore. They have relegated to the “subjective compliance” measure to try and proactively create a catch-all in order to cover themselves in case something ever comes about; not taking the time to take into consideration the unintended consequences. I get it, organizations are so afraid of getting a complaint or lawsuit filed against them they must make decisions they feel will protect their organization and fail to look at the decision in its entirety. We are collecting debt and from a compliance perspective we must always remember three things: 1) we are calling to speak with someone who is more than likely not expecting our call, 2) we are calling to speak with someone who has or is experiencing a financial hardship and is under difficult circumstances, and 3) we are most likely calling someone who does not want to speak to us.

This article is continued on www.CollectionAdvisor.com.

September/October 2017

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False Accusations or Real Problems?

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In my last article, I wrote about dispute management and the expectations of the CFPB as expressed in a special Supervisory Highlights report issued in March 2017. This article will discuss the Bureau’s take on complaints as expressed in several documents including the CFPB annual report on the FDCPA, published in March 2017.

Remember when you were young, and you got into trouble for something that someone else did, and then blamed it on you?

Whether it was your sibling, cousin or a classmate, someone wanted to avoid consequences by pointing the finger at you, an innocent bystander. This is what it feels like to collection industry members when CFPB complaint numbers are published. Obviously, someone feels wronged when he or she files a complaint with the CFPB. However, should the CFPB hold the third-party debt collection industry responsible for actions of others? Let’s look at some of the commentary, and you decide.

In its sixth annual report to Congress on the FDCPA, an 82-page report published in March 2017, the author provided an example of a complaint received in the debt collection category.

Let’s remind ourselves that up until 2011, annual reports to Congress regarding the performance of the FDCPA were provided by the Federal Trade Commission, the federal agency charged with enforcement of the Act. The FTC did publish complaint numbers in its annual reports; however, the FTC did not have a process for sharing complaints with debt collection agencies and did not seek resolution of complaints. Complaints were used to drive the initiation of enforcement actions. When the CFPB was created and given enforcement authority under the FDCPA, it took over the annual reporting to Congress and includes complaint data and more in its annual report to Congress.

While the author of the March 2017 report acknowledges that the CFPB gathers complaints about third-party debt collectors as well as first-party collection attempts, that is, collection attempts by creditors collecting their own debts, the term collector or collectors is used more than 200 times in the report. Creditor is used fewer than 20 times. The report opens with Director Cordray’s remarks, which begins with the fact that, “2017 marks the fortieth anniversary of the enactment of the Fair Debt Collection Practices Act.” The scene is set for a report about the actions of third party debt collectors. Then why, on pages 17 and 18, would the author provide an example of a complaint about excessive calls that is obviously a complaint about the collection practices of a creditor? In the example, the caller to the consumer is reported to have said that the company could make up to six calls a day to the consumer, and if the consumer were to be taken off the call list without making payments, the account would go into collections. The example is followed by, “Consumers report that collectors contact them using alternative methods, in addition to telephone calls.”

Because consumers must identify the entity about which they are complaining, the CFPB has the data and could provide a breakdown of complaints. In fact, in a monthly Complaint Report published in December, 2016, the CFPB identifies the “Most-Complained-About

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Compliance Advisor Debra J. Ciskey

Companies for Debt Collection” (page 17). Of the 20 companies listed, 13 are debt collectors and seven are creditors. While complaint data for these individual companies is provided, there is not analysis of total complaint numbers attributable to creditors. Creditors collecting their own debt in their own name are exempt from Fair Debt Collection Practices Act compliance, yet nearly all of the complaint allegations on the Consumer Response portal relate to acts and practices specifically prohibited by the FDCPA. These problems make the complaint numbers muddy.

Complaints filed by consumers are not validated in any way by the CFPB. When is a complaint truly a complaint? The CFPB considers any expression of dissatisfaction by a consumer to be a complaint. Conversation after conversation that I have with industry members about the complaints submitted to them on the CFPB’s portal indicate to me that many consumers are using the portal merely to request validation of a debt or invoke other self-help remedies, such as to request that the debt collector cease communication. They copy and paste the same downloaded dispute letters that we all receive in the mail every day. Certainly, if a consumer feels wronged by the actions of a debt collector, a complaint may be warranted. However, complaints about calls that were never made and threats that never occurred skew the complaint data to the point of meaninglessness.

What does this mean to you? Keep your own data on the complaints you receive. Analyze them. Determine if they are an indicator of changes that need to be implemented in your processes.

Is your IVR messed up? Do you have enough staff to handle all your inbound calls during busy times? What training do your collectors need to help prevent complaints? Are you responding to disputes fully, and in a timely way? The main value of complaints comes from their content and the resulting investigations we conduct before making our response. We are unlikely to see an end to the Consumer Response portal, so let’s use those lemons to make lemonade and help us to succeed in our efforts to turn attention to the actual culprits..

Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.

September/October 2017

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DEBT BUYERS ARE NOT DEBT COLLECTORS FOR FDCPA

BY BRIAN C. MITCHELL AND CLARK A. DONAT

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n June 12, 2017, the United States Supreme Court issued an opinion resolving a circuit court split as to whether a company that collects debts that it Brian C. Mitchell purchased for its own account would fall within the statutory definition of “debt collector” under the Fair Debt Collection Practices Act (the “Act”).

Henson v. Santander Consumer USA Inc., Clark A. Donat 582 U.S. ___ (2017).

According to the complaint, CitiFinancial Auto loaned money to petitioners seeking to buy cars; that petitioners defaulted on those loans; that respondent Santander Consumer USA Inc. (Santander) then purchased the defaulted loans from CitiFinancial; and Santander sought to collect in ways petitioners believe troublesome under the Act. The district court and the Fourth Circuit Court of Appeals held that Santander did not qualify as a debt collector under the Act.

The question before the Court was whether the purchaser of a debt, who later attempts to collect the debt for itself falls within the definition of “debt collector” under the Act. The Act defines the term “debt collector” to “embrace anyone who ‘regularly collects or attempts to collect … debts owed or due … another.’” (citing 15 U.S.C. §1692a(6)).

Both parties agreed that, generally, thirdparty collection agents qualify as “debt collectors,” while, those who originate the loans themselves do not. Therefore, the issue for the Court was “how to classify individuals and entities who regularly purchase debts originated by someone else and then seek to collect those debts for their own account.” Petitioners argued that the word “owed” under the statutory definition of “debt collector” is a past participle of the verb “to owe,” and this suggests that the statute’s definition of debt collector captures anyone who regularly seeks to .com

collect debts previously “owed … another.”

The Court rejected this argument, walking through the term’s ordinary meaning, the statutory phrase which the word “owed” appears, and the larger statutory landscape of the term “owed” (referring to a present (not past) debt relationship). The Court further rejected petitioner’s argument regarding the statutory language to “obtain” a debt within the Act, as the term “obtain” can refer to taking possession of a piece of property without also taking ownership. Similarly, petitioner’s assertion that certain of the Act’s exclusions implied Santander was a debt collector was also rejected by the Court because Santander is not barred from qualifying as a creditor under the Act’s plain terms. Petitioner’s final argument was premised on policy.

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Specifically, petitioner argued that Congress never had the chance at the time of the Act’s passage to consider what should be done about those in the business of purchasing defaulted debt and, if Congress had known this new industry would blossom, Congress would have judged defaulted debt purchasers more like independent debt collectors. Based upon the speculation required in such an argument and because the Court’s job was “to apply, not amend, the work of the People’s representatives,” the Court rejected this argument as well.

The Court unanimously held that such a company would not fall within the statutory definition of “debt collector” under the Act. The Santander opinion holds that a company may collect debts that it purchased for its own account without triggering the statutory definition of a “debt collector” under the FDCPA. Brian Mitchell is a partner and Clark Donat is an associate in Bracewell LLP’s litigation practice in Dallas. He can be reached at brian.mitchell@ bracewell.com. Clark Donat can be reached at clark.donat@bracewell.com.

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Make Like the Cubs and Win For Collections

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With baseball back in full swing here in 2017, there has to be an article devoted to my Cubbies’ World Series victory and the debt collection world.

By way of background, I am a lifelong Chicagoan: born and raised. For nearly as long, I have been a devout Cubs fan. In fact, I distinctly recall taking the local bus to the ”L” train which stopped a block from Wrigley field… at age 10! For reasons I can’t fathom, my wife did not allow my daughters to make the same trip. This love of the Cubs carried over into adulthood where my first law office was walking distance from Wrigley and I purchased season tickets way before my firm was making enough money to really afford them.

Last season was truly amazing. To a certain extent, I am still surprised they actually won despite having traveled to Cleveland and being a witness to history. I know you’re asking, “what does this have to do with collections?” Well, to my mind, there are lots of similarities between my Cubbies and the collection world of today.

The biggest similarity was the recognition that there was a need for a total makeover of the Cubs. As one of his first actions, General Manager Theo Epstein created a blueprint that set forth the plan by which the new Cubs would operate. Epstein created a document called The Cubs Way in an effort to change the culture in Chicago from what had been done in the past – going for the big free agent splash, putting off rebuilding from the ground-up in favor of another stop gap measure. This was not going to happen anymore. And it was not simply a makeover of the stadium for cosmetic reasons, this was change from the ground up – in attitude, in strategy and in environment.

Does that sound familiar? Look at the world of collections today and recall what our policies and procedures looked like five or 10 years ago? The Cubs made the decision themselves to remake their team whereas the impetus for the collections world was negative forces from without – Dodd-Frank, the CFPB and a massive regulatory scheme imposed on our clients and by extension, ourselves.

But as a Cubs fan, I am an optimist. That means you can look at the troubles of today and see hope for the future. In today’s environment, the time may be right for Epstein’s total make over to take place. In my mind, the first place to start is the four-decades-old FDCPA. Created in a time where there was limited regulation and even more limited technology, it simply is out of date regarding the methodology of collections, means of communication and does not reflect the professionalism that is so prevalent in our industry.

The main problem Epstein saw was that the Cubs were in a desperate need for a cultural overhaul. Specifically, they needed players with the winning mindset. They needed to shed “the loveable loser” mantra and become something new. For our part, in many ways, I see that same change is needed in collections. Collections was never

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Legal Collection Advisor Fred N. Blitt

glamorous, but in recent years, thanks to the political environment, we have become almost vilified. Regulators and judges only know what they read and see in the media, which almost always paints an unfair picture based on the actions of a single bad actor. They do not account for the amount of care we take to get things right to protect consumers.

Yet, despite knowing what we do and how many of us do it right, hundreds of times a day, every day, I not only still find many people who have this old school mindset about debt collections who have a bunker mentality, and let that mentality control their decision making. To be clear, I’m certainly not saying we’re perfect, but the changes our industry has made over the past five years has been extraordinary and do us credit.

The Cubs created a plan and took risks, for example, trading their best prospect for Aroldis Chapman despite knowing he would only be a “rent a player” in order to win now! Likewise, we cannot be afraid to make decisions to move the business forward. We need to take advantage of this favorable political atmosphere to move regulation and legislation forward to reflect the real world of collections. We may not get all we want, but a dialogue has to begin.

Thus far, it has been a one-sided monologue of consent decrees and admonishments. It is time to get a conversation going.

Look at your business – what good things are you doing? Are you advertising that to the clients or are you in bunker mentality? Do you have a state creditor’s bar association? If not, why not? If you do, what is that association doing to be an agent of change in your state legislature? Are you involved in NARCA? Are you watching from the sidelines or connecting with your Congressperson or Senator to help NARCA’s efforts to change the FDCPA. We have always been professionals and now we have the data to prove it thanks to all these audits. I am confident we are well ahead of Joe Maddon’s advice for the 2016 Cubs – “Just try not to suck.” Let’s do what the Cubs did and show the world how good we are.

Fred N. Blitt, Esq., is a partner with Blitt and Gaines, PC in Illinois and Couch, Conville and Blitt in Louisiana. He is past president of NARCA. September/October 2017

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CFPB ARGUES INCORRECT DEBT AMOUNT TO LAWYER VIOLATES FDCPA

BY SYE T. HICKEY

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n a recent amicus curiae brief to the U.S. Court of Appeals for the Eighth Circuit, the Consumer Financial Protection Bureau (CFPB) took the posiSye T. Hickey tion that a debt collector violates the Fair Debt Collection Practices Act (FDCPA) when it incorrectly represents the amount of debt it is attempting to collect, regardless of whether the debt collector is communicating with a consumer or the consumer’s attorney. The CFPB’s position and the Eighth Circuit’s ruling could have far-reaching implications for the financial services industry.

The CFPB amicus brief followed a ruling by the District Court for Minnesota, which held that because the debt collector’s alleged misrepresentation was sent to the consumer’s attorney, the higher “competent attorney” standard – and not the lower “unsophisticated consumer” standard – would apply. Accordingly, the District Court reasoned, the consumer’s attorney would look into the amount of debt and make an appropriate challenge if the amount were incorrect, making the alleged misrepresentation not actionable under the FDCPA (15 U.S.C. § 1692 et seq.). On appeal, the CFPB argued that the District Court couldn’t have gotten the opinion more wrong.

Case Background

The facts of the case center around Appellant Brianna Johnson’s (Johnson) past unpaid credit card debt with Wells Fargo Bank, N.A. According to the CFPB brief, Wells Fargo stopped adding interest and charged off Johnson’s debt in 2010, allegedly waiving the right to collect interest under the Card Agreement. At that point, Johnson’s account had accrued $4,953.47 in debt.

Appellee Admiral Investments, LLC .com

(Admiral) eventually acquired Johnson’s debt and sent her a collection letter in 2012, seeking almost $7,500 to account for interest, late and other charges. Johnson subsequently retained counsel. Admiral sent Johnson’s counsel a letter in 2015, alleging that the debt had swelled to almost $11,000. Admiral subsequently filed suit against Johnson in Minnesota state court in 2016, seeking to collect the original debt amount of $4,953.47.

On February 23, 2016, Johnson filed suit against Admiral in federal court, alleging violations of the FDCPA. Specifically, Johnson contended that the letters sent from Admiral constituted a false representation of the character, amount or legal status of her debt. Admiral subsequently filed a motion to dismiss, arguing that the claims were time-barred, that Johnson lacked standing and that her Complaint had failed to state a claim under Rule 12(b)(6).

After finding that Johnson’s claims regarding the second letter were not timebarred, the District Court held that the second letter, sent to Johnson’s attorney, was not actionable under the FDCPA because the competent lawyer standard required Johnson’s counsel to look into whether the amount asserted was correct and take action if the amount was incorrect. Because the alleged misrepresentation was “based on a legal interpretation and contained in a letter” to Johnson’s counsel, the competent attorney standard shielded Admiral from violating the FDCPA. The District Court subsequently granted the motion to dismiss; Johnson then appealed to the Eighth Circuit.

CFPB Brief

In its brief, the CFPB argues that the difference between the “unsophisticated consumer” and “competent attorney” standards has zero impact on an alleged misrepresentation regarding the

September/October 2017

amount of debt by a debt collector. As argued by the CFPB, the FDCPA has “no exception for misrepresentations” made to competent lawyers and a debt collector “cannot avoid its statutory responsibility to represent accurately the amount of a debt by shifting the burden to a consumer’s counsel to uncover the falsehood.” In other words, a misrepresentation regarding an amount of debt is still a misrepresentation, regardless of the recipient.

In support of its argument, the CFPB cited decisions in the Seventh, Tenth and Eleventh Circuits, all of which have declined to extend the “competent attorney” standard to shield debt collectors from facially false statements to consumers’ counsel. Essentially, the CFPB argued, regardless of whether the District Court applied the “competent attorney” standard or “unsophisticated consumer” standard, it reached the wrong conclusion in dismissing Johnson’s claim for violations of the FDCPA.

Impact

Because the unforgiving FDCPA is akin to strict liability, debt collectors and other creditors seeking to recover past due accounts need to take extra caution in calculating the proper amount of debt owed. Debt collectors would be wise to implement safeguards or engage counsel to ensure the amounts sought are not prohibited by the laws of the consumers’ respective states – i.e., interest on interest in certain states.

According to the CFPB, debt collectors and other entities should be held liable for incorrectly representing the amount in communications to both consumers and their respective counsel.

The CFPB’s position, if upheld by the Eighth Circuit (and potentially other courts), thus puts all debt collectors on notice to be cautious when dealing with a debtor’s counsel. Accidentally providing an incorrect amount to the debtor’s counsel will result in an FDCPA violation, probable litigation and a potentially heavy fine.

Sye T. Hickey, an attorney in Baker Donelson’s Nashville office, concentrates his practice in complex commercial litigation and frequently works with individual and corporate clients in disputes across multiple areas. He can be reached at shickey@bakerdonelson.com.

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Sealing the Deal ROUTING SLIP

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How solid is your relationship with your client base? Do you feel secure that you know all the players in the management team of some of your largest and most profitable clients? Can you successfully reach the CFO or CEO or anyone at the C level within the organization? If the answer is “no” then you have a lot of strategic work to do!

Over the years, I have heard many laments by agency owners relative to the unexpected loss of significant clients through the decision of someone they didn’t even know in the organization. The fact that you have great liquidations and an 18-year relationship doesn’t really seal the deal in today’s market. The best way to guarantee the continuation of important business relationships is to know all the players, which dictates that your entire office team must have a critical role. Without this relationship strategizing you run the risk of “here today and gone tomorrow.” This takes precious time we often don’t have. But as expressed in an African proverb, “If you want to go fast go alone.

If you want to go far, go with others.”

One way to start this process is to assess your contacts within every significant client’s operation. With whom does your staff communicate? How often? Have positions changed? To whom do the people you know report? Are positions solid or are interim consultants running part of the organization? But how do we, from a practical perspective, reach out and penetrate the creditor work force?

Typically, we mirror contacts and relationships between our office and a client’s team. Our front-line staff engages with front liners. Our supervisors deal with supervisory staff. C-level management in your firm is responsible for developing that level of relationship. The challenge is to be sure each level gets adequate attention and a true, deep relationship is developed.

The front line staff often communicates daily. There are exchanges of reports, discussions relative to specific account dynamics and open dialogue. As regular as these communications may be, it is not uncommon for this level of staffing to never have personally met. The mid-level, supervisory staff may communicate less frequently but will sift through larger issues surrounding the overall relationship between the organizations.

Unfortunately, it is at the C-level of our organizations where the relationship development may be lacking. There is a reliance on the front line and mid-level development which often is very solid. We must develop plans and methods to spread our contact organization-wide. But what can we do?

Marketing Gifts

The gift of pens, water bottles, sticky notes and utility bags with your logo are nice ways to keep clients happy. They use your tokens of appreciation regularly and continually see your name.

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Initials

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Benchmark Advisor Harry A. Strausser III

Newsletters

Newsletters, whether in a paper or electronic format, are a great way to inform clients about all levels of activity within your organization. Highlight staff member milestones, accomplishments, charity work and corporate achievements. Recently, some of my industry friends were awarded Inside ARM’s “Best Places to Work” designation. That is the type of thing you need to tell your clients about! And, be sure you send these publications to as many players in the client space as possible.

Industry Trade Association Meetings

An active presence at meetings sponsored by various industry trade groups is a good way to interact with the mid to upper-level client staff. It also exhibits your interest and knowledge in that industry. As an example, in the medical industry, you will find patient account managers and directors attending American Association of Healthcare Administrative Management meetings, but if you want to interact with the C-level staff you would want to attend Healthcare Financial Management Association meetings for the CFOs.

Support of Client Sponsored Charity Events

One successful method to engage with the upper echelon within the creditor setting is to corporately support charity events sponsored by your client. At this level, agency management should be at the forefront of the donations and event assistance. Sponsor a hole at a golf tournament and send a team to participate. Write a check for a capital campaign for a new wing at the hospital. Donate a truckload of gifts over the holidays to the credit union’s initiatives to help indigent local families. This kind of activity can go a long way and the C-level management will certainly take notice.

Showing interest in your client above and beyond the collection contract will do more for your retention of that client than most other dynamics.

This article is continued on www.CollectionAdvisor.com.

September/October 2017

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EXCEEDING DATA SECURITY REGULATIONS

BY JAN STIEGER AND MARK NAIMAN

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ata security is an increasingly vital component of professional collections.

A large amount of data is exchanged on a regular basis, from credit reJan Stieger ports to scrubs to sales files. Collections leaders, even those who are not technologically inclined, have found it necessary to take important steps to understand how data flows through the orgaMark Naiman nization and where files are stored. It is essential that company officers continue to take on accountability when it comes to data security. After all, data is often considered, at the same time, a company’s most valuable asset and one of its greatest vulnerabilities. Proper data security serves not only the consumers’ interests, but also protects the collector on reputational, financial, and legal fronts.

Generally when we picture a data security threat, we think of outside dangers such as malware, ransomware, social engineering or phishing attacks. These threats can be mitigated with awareness and employee training, as they rely heavily on the target’s carelessness or naiveté.

Everyone should be aware of these risks in order to minimize vulnerability as much as possible.

There are several data security vulnerabilities that companies have a relative amount of control over, such as inadequate employee training, complacency, lack of organizational commitment, and lack of expertise. These, and all, aspects of data security should be addressed from day one, and committed to every day thereafter.

RMA’s Certification Program requires company adoption of policies and procedures that address and mitigate these various risks, as data security is integral to any compliance management system. .com

These policies and procedures are required to meet or exceed state and federal laws and regulations. RMA recommends receivables management companies undergo the following internal data security measures: • The appointment of a Chief Compliance Officer, in part to ensure accountability. If a critical security control fails, it must be reported internally up the chain.

• Penetration testing for service providers on a regular basis.

• Due diligence to establish that vendors adhere to (or exceed) the same level of data security.

• An annual risk assessment and any adjustments made based on the results.

• Internal and third-party audits of the company’s entire compliance management system.

• Data back-ups that are located offnetwork.

• Establishment of a continuity plan outlining how the company will recover and mitigate damages of a potential breach.

“Confidential consumer information” includes more than just personal identifiable information such as card numbers, social security numbers, and driver’s license numbers. In fact, under the FDCPA, the existence of a debt and the status of that debt must not be disclosed to third parties unless allowed for as a permissible purpose. Those who collect medical debt should be aware that consumer healthcare information is also protected under HIPAA, such as medical conditions, prescriptions, medical procedures, and doctors. Finally, a company’s own information should also be protected under many layers of security, as a great deal of company data is confidential, including payroll, financials, background checks, employment, sales strategies and product strategies.

September/October 2017

During the purchase and sale transaction and portfolio valuation, it is essential to demonstrate due care for protection of confidential consumer information. RMA worked closely with the Federal Trade Commission (FTC) to create best practices in the sharing of portfolio data. Best practices would necessitate: • The buyer and seller execute a mutual Non-Disclosure Agreement (NDA) that is valid for a minimum of two years. The NDA should include the requirement to maintain cyber security liability insurance, agreed upon remedies in the event of a breach, and the methodology for the data file to be returned and/or destroyed.

• The seller encrypt appropriate data fields.

• Files be transferred via a secured transmission methodology and be password protected. Data files and passwords should be sent via different communication vehicles.

• A seller that transfers data with personally identifiable information to maintain a pre- and post-sale file transfer log.

While data security encompasses a broad range of measures, the application of these measures is not as abstract as one may think. Chief Compliance Officers are encouraged to undergo enhanced training on data security, not only to maintain the company’s compliance management system, but also to provide checks and balances with the IT department. No one individual should have unrestricted access to “the keys to the kingdom”. Collections employees should be hired only after passing a background check, and employees should be regularly trained on the importance of the data they are entrusted with, as well as best practices to maintain data security.

Mark Naiman is President/CEO of Absolute Resolutions Corp., and currently serves as President on the Board of Directors for Receivables Management Association.

Jan Stieger, CAE, serves as Executive Director of Receivables Management Association, the trade association representing nearly 550 member organizations in the accounts receivable industry.

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Agency Spotlight

Patience Wins in Medical Collections

BY JOSHUA FLUEGEL

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ospitals and medical professionals find themselves in a complicated situation as a simple dunning is rarely the answer in medical debt colJason Meyer lection. Medical debt normally finds consumers at their weakest. Therefore maintaining a civil yet business-minded approach is paramount to maintain patients. This is where medical professionals reach out to collection professionals for the delicate and patient touch required. Collection Advisor spoke with Jason Meyer, CEO of Frost-Arnett, about what strategies he currently finds effective and how a collection agency can achieve maximum recovery with maintaining the patient experience.

Tell us how you came to be involved in collections. I spent 20 years as a CPA, consultant and investment banker. In early 2015 the opportunity to join Frost-Arnett presented itself as George Buck, our president at the time, made it known he wanted to give up management responsibilities by the end of 2016. I had consulted and advised hundreds of companies through the years in many different industries and at various stages of their lifecycle. To bring the culmination of that knowledge to a well-established company with a great reputation in an interesting market was too exciting of an opportunity to refuse.

What do you do to keep your collectors motivated and happy? At Frost-Arnett, we believe that our people are our greatest asset.

We also know that if they are engaged,

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then they will be more productive, there will be fewer turnovers and they will be a more positive influence on their colleagues. These are some examples of how we try to keep our employees engaged and motivated: • We provide one of the most generous paid time-off policies in the industry.

• 401(k) company match program.

• Corporate-sponsored quarterly luncheons.

• Corporate-sponsored Employee Appreciation Day. • Spirit days.

• Helping Hands Fund (employee emergency support).

• Collector of the Month Award.

• Employee of the Year Award.

• Annual employee engagement/satisfaction survey.

• Upgraded facilities.

• Employee Assistance Program.

• Quarterly birthday celebrations.

• Flexible hours.

How does a collection agency present itself as trustworthy to clients? Trust is something that is easily said but is hard to prove. It is built over time by making many small decisions while keeping in mind the longterm good of the client relationship. If you consistently do what is right for your clients, then they, in turn, are willing to provide positive referrals to other potential clients, and the cycle continues.

Since the inception of the company, we have prided ourselves on operating ethically and morally – always choosing the hard right over the easy wrong. Are we perfect? No, but I’m comfortable saying that trustworthiness is our most important value. Our extended success would not have been possible without each generation carrying that forward. It’s really something that we instill from the first day an employee joins our company: do the right thing, treat others as you would like to be treated, and the rest will work itself out.

Frost-Arnett’s “Stamp Out Hunger Week” collected 1,300+ food items for the local food banks in Houston, TX. (Left to right) Heather Watson, Brittney Stuard, Camille Loya, Kaila Chenault, Chantal Napier and Daniel Delva.

September/October 2017

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“One of the biggest challenges we face is ensuring that we are getting accurate and timely information from our clients.”

Besides compliance, what is something an agency might do that would be detrimental to its medical collection practice? Medical debt is different than other types of debt. Nobody plans to get sick, and medical debt occurs out of necessity. Often patients are in pain and trying to get their lives back in order. Agencies that work medical debt need to keep that in mind. Pushing to get the extra dollar is not always the most important thing to a healthcare provider client. They want to balance maximum recovery with maintaining the patient experience. They want their patients to continue to return to their offices. If an agency is overly aggressive in their practices, they can damage the provider’s brand.

If you knew then what you know now, what would you have done differently in collections?

I would ensure that we had multiple contacts at our large clients. We have had a few client losses over the years that we could tie back to a change in management at the client beyond where our relationship(s) presided. I think your company is better off having as many touchpoints as possible, at all levels (A/R manager to Director of Rev Cycle to CFO) with a client. You can never predict change, but the more contacts you have with a client, the more likely you are to keep that client when change inevitably occurs. [Editor’s Note: for more information, see Harry A. Strausser’s column on page 14] What is a development you would like to see in medical collection technology? I would like to see seamless information transfer. One of the biggest challenges we face is ensuring that we are getting accurate and timely information from our clients. Historically, healthcare providers have focused on the clinical side of the house, often to the detriment of their financial and technology areas. As a result, a large portion of the healthcare world is just catching up on the investments needed to make these areas effective. For example, we still have .com

clients that give us files in paper form, which we have to input into our system manually. [Editor’s Note: for more information, see Sam Edens’ column on page 6] While this is becoming rare, it shows where investment in these critical areas has been on providers’ priority scale. It is imperative, especially given some of the regulatory changes that are coming down the pipe from Washington DC, that providers get their agencies detailed, timely and accurate information.

Corporate Trainer Shelby Allen administering a training course at Frost-Arnett.

What is a piece of advice you would offer an agency considering medical collections? Be patient. The sales cycle in the medical world is extremely long. New relationships take a long time to develop, and often you are trying to displace an agency that has been working with the provider for decades.

Inertia in the healthcare world is a difficult thing to overcome and typically, unless there is a major issue with their current agency, providers do not have a sense of urgency to change vendors given the time and cost of switching.

How is Frost-Arnett involved in the community?

Frost-Arnett has always had a large community outreach and charity program. Our employees take pride in being associated with and contributing to a company that tries to help out and better the communities in which we live and work. Some ex-

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amples of the charities we are involved with include: The American Heart Association, American Red Cross, Hospital Hospitality House of Nashville, St. Baldrick’s Foundation, Salvation Army, Susan G. Komen, Operation Christmas Child, Second Harvest Food Bank, Toys for Tots, Wounded Warrior Project and the YMCA. What do you do to optimize upper management’s performance? We empower our senior management team to run their department as if it were their own company within Frost-Arnett. It starts with a series of meetings with each senior manager to set goals for their department for the upcoming year. They outline their objectives, development goals, hiring goals and capital spending needs. We then incorporate that information into detailed monthly and quarterly P&L [profit and loss] statements with Key Performance Indicator (KPI) targets. These financial and performance goals help measure senior managers’ performance throughout the year.

We recognize this is a dynamic business and things change throughout the year. As such, we follow up through individual quarterly meetings to see how their department is performing versus their targets goals. If they need to revise an existing goal, we incorporate that information into the remaining P&L and KPI goals for that year. At the end of the year, we then do a comprehensive evaluation of their performance versus the original and/or updated plan, and the process starts over as they plan for the next year.

We want them always to keep an eye on the big picture and know that it is critical to have everyone focused on the longterm plan. This is why we have consistent checkpoints along the way so that they do not get bogged down in the daily grind.

What do you enjoy doing in your free time? I enjoy spending time with my family, playing golf, skiing, researching investment ideas and reading.

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Predictive Dialer Software Roundtable

STATISTICS YOU NEED FOR DIALER CAMPAIGNS

BY JOSHUA FLUEGEL

A

drop in a bucket may not be much but a multitude of drops certainly adds up. So is the case with predictive dialer statistics. A constant outflow of communication with consumers can provide collection professionals vast amounts of data. As represented in the thoughts of the following predictive dialer software experts, this data can provide information on the communication habits of consumers and the effectiveness of a collector’s interaction. These experts also provide ways to avoid common mistakes they have witnessed collection professionals make.

Mckay Bird CMO of TCN What is the key to developing an effective dialer campaign? The primary key to developing an effective campaign starts with several key elements including: audience, scripting, automation and an omni-channel approach (email, SMS and voicemail delivery). All four need to be used wisely and in concert with each other. By having a greater corporate strategy these elements will only elevate your call center with increased contact rates and customer satisfaction.

What is a mistake you see collection professionals make when developing a campaign and how can it be avoided? Most common

collection mistakes range from generalized TCPA violations, double dipping on old debt and not adhering to scripting guidelines set by corporate policy. Though some of these items are more blatant, it is important to have the tools to measure and report on the above. An example would to ensure that your organization is using call recording and templated scripts. There are many other tools out there such as cell phone scrubbing and area code management that will help further a compliant call center.

Lex Patterson President of DAKCS Software Systems What is the key to developing an effective dialer campaign? The key to building an effective dialer campaign is to understand what kind of calling you would like to do and the associated risks involved with that type of calling.

Once you have an idea of both the campaign call type and the types of accounts/contacts being called, you can then build strategies to pinpoint your custom audience. Building and defining your custom audience(s) is important to develop since different calling type campaigns are defined for varied types of business or debt, demographic variances, balances, payment history, cell phones, voicemails on home numbers, etc. By utilizing proper scripting and dialog design to deliver the most effective messages, while considering and analyzing the most effective calling times, you will improve your contact rate percentage.

What is a mistake you see collection professionals make when developing a campaign and how can it be avoided. Dialing without specific strategies or using the “one campaign fits all”

20

method is a mistake we’ve seen as we’ve worked to help customers improve contact results. Having the ability to analyze your data and results, and then develop strategies based upon that feedback would improve results. For example, analyzing data that pays attention to the contact rate by campaign, how many reach attempts are made to receive a call back, and what campaign provided the connection for the consumer to answer the call. Measuring the data and results analysis will tell you if there is a particular message or dialog that produces better results and connects better with the consumer. Dashboards that can provide real-time feedback are a tremendous help with this process.

Another mistake we have noticed is that agencies need to establish a backup plan for all accounts that have been called. There are times, when utilizing call automation that accounts in certain scenarios could potentially “fall between the cracks.” To minimize this risk, we recommend building quality assurance right into your process to check for accounts that are no longer valid for a dialing campaign. These accounts can then be handled in another way, after exhausting efforts are made through the calling campaign.

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Rick Morris President of CallEvo What is the key to developing an effective dialer campaign? Successful dialer strategies involve several key points. First, it is impossible to dial effectively without understanding your goals. Just like with any business strategy, you must be clear and concise about what you need to accomplish and how the dialer plays a role in that strategy. Once you have determined your overall strategy for a collections campaign, your dialer is the tool to help manage the strategy.

Many companies believe the greatest strength of a dialer is the ability to make calls quickly. While that is an important asset, it is really the metrics, statistics, and collector management tools that can bring you the greatest efficiencies and improve your performance. By focusing on what those metrics tell you and tending to your weaknesses, you stand to improve performance. Continually seek to target those analytics and use them to affect your overall dialing and campaign strategy. Don’t just make a call and expect results.

What is a mistake you see collection professionals make when developing a campaign and how can it be avoided? Once the campaign strategy is developed and the tactical technical details to deploy the campaign have be confirmed, spend time thinking about the feedback loop and key metrics you will use to measure execution. I always like to say, “inspect what you expect.” Once you have defined metrics, determine the people in your company to measure those analytics and hold them accountable to delivering and analyzing performance. And don’t be afraid to change the analytics regularly. Remember that even well thought out measurements and analytics might be manipulated and over time, may lose effectiveness. Continuously challenge your team to find new and creative ways to measure performance and incentivize the right dialing behavior.

Michael Vesper Founder and CEO of DialConnection What is the key to developing an effective dialer campaign? Using real-time data and automation. Real-time access to accurate and updated consumer data is required to efficiently build and execute campaigns and achieve full compliance. Account data and business objectives can change throughout the day.

Therefore, managers need the ability to easily and automatically adjust their contact strategies to meet the needs of the business and its clients without having to manually export, format and de-dupe data and upload it to their campaign management platform just to run a campaign. It’s too time consuming, cumbersome and error-prone. Instead, campaign managers need a solution that updates account data from a live data source real time and automatically pushes it to an active campaign. This approach ensures that your

campaigns will always work off the latest data and exclude accounts that have become restricted during the business day.

What is a mistake you see collection professionals make when developing a campaign and how can it be avoided?

A common mistake made in developing contact strategies is not varying the way that campaigns are processed day after day. If a company imports the same data in the same order and then calls the same numbers at the same time each day, their right party contacts rate will decrease and their collection performance will falter. On a daily basis, mangers need to rotate phone number types, sort campaigns by different data elements, adjust campaign scheduled start times, and blend campaigns to optimize performance. Selecting the right contact management solution will automate many of these steps, making it easier for companies to maximize campaign performance.

Carl A. Briganti President and Founder of CSS, Inc. What is the key to developing an effective dialer campaign? There are several key elements in developing an effective dialer campaign, but probably the most important one is to take a more scientific, data driven approach when creating a campaign.

Look at key indicators of your contact management technology. Analyze collector performance, days of the week and times of the day that yield the highest degree of penetration; that is the highest percentage of contacts on your outbound traffic compared to the number of calls made. Everything must be actionable. Focus on analytics that identify the top and bottom performing campaign strategies (not the middle), segment out bottom strategies and replicate the top performers.

What is a mistake you see collection professionals make when developing a campaign and how can it be avoided? Currently,

one of the most typical mistakes dialer managers make is to stick with simply making dialer calls while disregarding the new tools available in contact management.

Nowadays, less and less people answer phone calls if they cannot identify the source.

To avoid this, new emerging technology solutions in contact management, such as ringless direct voicemail drops and compliant SMS text messaging campaigns, are available. These tools are more consumer-friendly as the recipient is not disturbed, interrupted, or charged and they are ultimately in control as to whether they want to listen, read, ignore or discard the message.

21

Medical Collection Software Roundtable

WHAT’S COMING IN MEDICAL COLLECTIONS

BY JOSHUA FLUEGEL

M

edical debt collection has seen much change over the past few years. Many anticipate the changes will continue for at least a few years more. Collection professionals have been working hard to anticipate these changes and adjust their processes and software accordingly. Collection Advisor approached medical collection software providers to see what they anticipate for the future of medical collections and what they recommend professionals do in preparation.

Lex Patterson President of DAKCS Software Systems What do you see as an upcoming difficulty in medical collections? Patients’ portions of healthcare cost have increased steadily, and will continue to do so in the foreseeable future. Patient balances after insurance are growing at a rate of 30% per year, and patients are at least two times more difficult to collect from than insurance companies. Because of increased rates and difficulty to collect, healthcare providers are going to need to spend additional time and resources collecting from patients.

In addition, patient premiums have increased by 69% between 2004 and 2014. The cumulative effect of all of these trends is that the patient’s financial well-being is negatively impacted by major healthcare reimbursement shifts; but just as important, healthcare providers must now be increasingly savvy when it comes to how they manage and collect from patients.

Most providers do not have the tools, infrastructure, or analytics to more vastly improve their patient collections results. To add, the patient billing and reimbursement process is incredibly complex, which can cause confusion to the patients. This confusion builds additional delays into timely payments of the healthcare receivables as patients often times cannot define whether or not their health insurance has completed paying its portion of the bill, or where the patient portion currently stands.

What do you recommend collection professionals do to be prepared for this eventuality? In order to be a trusted partner for healthcare providers, collections professionals need to first understand that healthcare organizations have

22

a different perspective on collections than other verticals. The last thing a local healthcare provider wants is a reputation in their community for being hard line collectors. Building out a specific program that has a soft approach while driving effective results is foundational.

Collections professionals need specialized training to understand the federal, state, and local programs that are available for patients including the healthcare provider’s charity programs. Charity programs serve as a natural extension for the healthcare provider in driving the patient to the right program that can best assist both the patient and the provider. Having a local representative from the collection agency to regularly meet with the healthcare provider onsite is important to allow the collector to stay abreast of policy shifts, new regulations, and other challenges in the rapidly changing healthcare environment.

The modern collector needs to offer strong patient-oriented systems to make the payment and account management process easy for patients. Providing a better patient experience that centers on integrating data, technology, content and communication to coordinate payment results through omnichannel tools is becoming increasingly important.

By having the right technology in place, there will be increased opportunities for savvy collection companies. Using the platform that provides the ability to serve various demographics with self-service and omnichannel options making payment setup and tracking easy is a must in today’s world. If collectors can make the complex process of medical reimbursement easier for patients, they will ultimately be much more successful than by employing the standard collections tactics.

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Carl A. Briganti President and Founder of CSS, Inc. What do you see as an upcoming difficulty in medical collections?

Both the latest and upcoming changes in healthcare policy, such as increasing coverage limitations and increasing deductibles, will generate a higher volume of denied claims. This fact, compounded with an anticipated increase in complexity of compliance regulations, may wreak havoc on those processors that cannot easily and swiftly adapt their CRMs to an increasingly changing regulation environment and have to solely rely on training personnel in order to conform to the volume of claims as well as the myriad of new rules.

What do you recommend collection professionals do to be prepared for this eventuality? Collection professionals must ensure their CRMs allow them the flexibility to easily define and maintain compliance rules at multiple levels such as federal, state, local and even client governance rules and preemptively anticipate and prevent potential compliance breaches by stopping agents before they can trump policy. Reliance on training would not be enough to avert this.

Chris J. Roberts President and COO of Sentinel Development Solutions, Inc. What do you see as an upcoming difficulty in medical collections? The trend toward higher deductible health plans. Higher deductibles cause problems for revenue cycle managers because patients with higher debt balances are less likely to pay their medical bills. In addition to higher debt, many patients do not understand their contractual obligations under their high deductible health plans.

What do you recommend collection professionals do to be prepared for this eventuality? It is important to use simple, easy-to-understand communication methods to inform debtors of their obligations. Providing a clear understanding of what to expect at every stage in the process helps engage people and encourages them to become active participants in resolving outstanding debt. Collectors should assume responsibility for educating consumers early in the account resolution process. Efforts to educate and engage should continue throughout the process. Systems and processes should support this effort at every stage.

Ranjan Dharmaraja CEO of Quantrax What do you see as an upcoming difficulty in medical collections?

The difficulty in medical and all types of collections is moving from a very physical process to the digital age. The consumer has changed and so must our communication channels and processes.

What do you recommend collection professionals do to be prepared for this eventuality? Unless you want to end up

like Nokia, Blackberry or the taxi industry that may soon be bankrupt because of an app called Uber, think about spending time and money to modernize. This is a technology business and we are in a period of radical change. What worked 15 years ago is not working today!

Chris Campbell CEO of Simplicity Collection Software What do you see as an upcoming difficulty in medical collections? As with other areas in the collection industry, the biggest challenges and difficulties facing medical collections centers around automation and compliance. Trying to do more with less and still ensuring your business is compliant with current and future standards. In order to be successful, an agency must ensure that they can automate and standardize processes within the bounds of the ever-changing regulations and laws. With regulations ever slanted toward protecting the debtor, it is critical for an agency to ensure that they are able to operate their business and empower their employees to succeed while still maintaining compliance.

What do you recommend collection professionals do to be prepared for this eventuality? In order to prepare for the compliance challenges ahead, agencies should look to automate processes centered around compliance regulations. Look for opportunities to educate and align yourself with those who understand the compliance regulations and have experience with the challenges that medical collection agencies specifically face. By taking necessary steps today to automate the compliance driven processes in your business, whether within your collection software or your day-to-day business practices, you are ensuring that your business will be well poised for future compliance challenges that are sure to come.

23

MEDICAL COLLECTIONS COMPARISON CHART PRODUCT

RMEx

IMPACT HD 2.0

Beyond ARM

eCollections SimplicityCollect

COMPANY

Quantrax Corporation Inc.

Collection Solution Software

DAKCS

Sentinel Development Solutions

Simplicity Collection Software

Statements can be regenerated/reprinted for a client for a specific period

Yes

Yes

Yes

Yes

Yes

Tracks multiple internal and external contact names/numbers

Yes

No

Yes

Yes

Yes

GENERAL FUNCTIONALITY

Automated faxing

Yes

Yes

No

No

No

Integrates with email

Yes

Yes

Yes

Yes

Yes

Automated phone dialing

Yes

Yes

Yes

Yes

Yes

CHUI environment

Yes

Yes

Yes

No

Yes

Web access: Secure and customizable remote access for collectors

Yes

Yes

Yes

Yes

Yes

Web access: Secure and customizable remote access for debtors

Yes

Yes

Yes

Yes

Yes

Web access: Secure and customizable remote access for clients

Yes

Yes

Yes

Yes

Yes

Application development studio

No

Yes

Yes

Yes

Yes

User-defined client access interfaces

No

Yes

Yes

Yes

Yes

Built-in collection agency templates

Yes

Yes

Yes

Yes

No

Manages HIPAA privacy requests for alternate addressing

Yes

Yes

Yes

Yes

Yes

Captures denial management statistics for reporting

Yes

Yes

No

Yes

No

Systematically determines most appropriate letter correspondence address

Yes

Yes

No

Yes

Yes

Manually links associated accounts

Yes

Yes

Yes

Yes

Yes

Interfaces to Web-based applications for eligibility and claim

Yes

Yes

No

Yes

Yes

Manages medical record requests for claim processing

Yes

Yes

No

Yes

Yes

Agency/attorney management

Yes

Yes

Yes

Yes

Yes

Asset sales

No

Yes

No

Yes

No

Metro2 reporting on post-charge-off

Yes

Yes

Yes

Yes

Yes

System of record or nonsystem of record functionality

Yes

Yes

Yes

Yes

Yes

Standard agency/attorney/buyer formats

Yes

Yes

Yes

Yes

Yes

Bankruptcy/deceased management

Yes

Yes

Yes

Yes

Yes

HEALTHCARE COLLECTION FUNCTIONALITY

RECOVERY FUNCTIONALITY

TELEPHONY FUNCTIONALITY Dialer Carrier-grade hardware (Nebs-compliant)

Yes

Yes

Yes

Third-party

No

Automatic remote error reporting

Yes

Yes

Yes

Third-party

No

Automatic software/firmware updates

Yes

Yes

Yes

Third-party

No

Yes

Yes

Yes

Third-party

Yes

Fully integrated to application

Yes

Yes

Yes

Third-party

Yes

Fully integrated to dialer (bidirectional information transfer with call)

Yes

Yes

Yes

Third-party

Yes

Real-time application database access

Yes

Yes

Yes

Third-party

Yes

Third-party

Yes

Third-party

Yes

Call Recording On-demand playback into current conversation IVR

Information on this tableparty is derived from information posted on the Internet and direct questions. The company is the ultimate source Yes Yes and should be contacted Yesdirectly.

Outbound right delivery

Secure payment authorization

24

Yes

Yes

Yes September/October 2017

.com

‘

Business Directory

Analytics & Data Noble Systems Corporation Contact Center Technology noblesystems.com info@noblesystems.com 404-851-1331

The Computer Manager, Inc. Debt$Net Collection Software debtnet5.com sales@debtnet5.com 800-552-8397 Since 1987, Debt$Net collection software has provided collection agencies, law firms and in-house collection departments with one of the most comprehensive collection systems in the industry.

Simplicity Collection Software SimplicityCollect simplicitycollectionsoftware.com sales@simplicitycollect.com 866-791-0224 As an industry leader, Simplicity is the only software provider to offer a web solution with unlimited users, clients, accounts, and custom fields at an affordable price!

Sentinel Development Solutions, Inc.

eCollections ecollections.com sales@ecollections.com Noble Systems Corporation is a global leader in customer 515-564-0585 communications, providing innovative premise and cloud Comtech Systems The result of 20 years of industry-leading collections/resolutions for Contact Center, Workforce Management and Collect! covery platform development, eCollections is a comprehenInteraction Analytics technologies.

Credit and Debt sive enterprise collection system with flexible configuraCollection Software tion, ease-of-use, powerful payment features, workflow Collection Agencies collect.org automation, and unparalleled reporting and tracking. info@collect.org United Collection Bureau, Inc. 800-661-6722 Collection Support Services 1st and 3rd Party Collection Services Collect! combines ease of use with total integration of functions. Accounts are efficiently tracked from Corporate Advisory the time you receive them until activity is concluded Collection Software Solutions and they are closed. Collect! keeps track of critical

M&A Advisory Services, information automatically.

Total integration provides Beam Software Valuations, Market Intelligence for seamless and accurate month end invoices and BEAM Accounts Receivable Management statements with full account histories. corpadvisorysolutions.com Software, Beam Cell Phone Identification mlamm@corpadvisorysolutions.com Software Comtronic 215-717-8719 Debtmaster Corporate Advisory Solutions, LLC is a boutique investCDS Software debtmaster.com ment bank and we specialize in M&A Advisory Services CollectOne 800-414-2814 for the Outsourced Business Services (OBS) sector; our collectone.com The Debtmaster® Software along with our industry core focuses are in Accounts Receivable Management info@collectone.com leading Cloud-Hosted environment gives you a reliable, (ARM), Customer Relationship Management (CRM), 888-816-3333 powerful, cost-effective collection solution right at your and Revenue Cycle Management (RCM).

CollectOne is an award winning suite of debt colfingertips. lection solutions that provides a feature-rich set of Cornerstone automated business processes designed to minimize DAKCS Software Support costs and maximize results.

Systems State Licensing Beyond.Net and E&O Insurance CODIX dakcs.com cornerstonesupport.com iMX Collection, sales@dakcs.com info@cornerstonesupport.com Legal and Recovery Solution 800-873-2527 888-445-8660 codix.us/debt_collection DAKCS Software Systems has been an industry leader Cornerstone Support is the premier licensing and insurbquinn@codix.us for over thirty years. Headquartered in Ogden, Utah, ance provider to the collection industry; professionally 404-790-0998 DAKCS provides a one stop shopping solution for a trained to assist you with all of your state licensing iMX is a complete centralized debt collection and diverse client base.

DAKCS is committed to providing needs. recovery software solution. Based on the latest technolotheir customer community with all the tools they need gies, iMX Debt Collection includes all the most advanced to succeed in the ever changing VoApps business functionalities supported by native tools.

ARM business, today and in the future.

DirectDrop Voicemail voapps.com Collection Solutions Quantrax sales@voapps.com Software, Inc. Corporation Inc. 855-737-1596

CSS IMPACT! HD™ 2.0 RMEx VoApp’s patented DirectDrop Voicemail service delivers a cssimpact.com quantrax.com voice message directly to a consumer’s voicemail server carlb@cssimpact.com marketing@quantrax.com – without calling the phone in question.

818-593-4830 301-657-2084 CSS IMPACT! HD™ 2.0 (Enterprise), the industry’s leading ARM | Collections & Compliance Platform delivering decades Quantrax is a high-end collection technology company that has marketed and supported an intelligent collecof deep rooted industry acumen for the ARM, Collections & tion software platform for over 25 years.

Compliance sectors. IXP (Lite) also available.

25

‘

Business Directory Compliance

LexisNexis® Risk Solutions LexisNexis ® Accurint ® for Collections lexisnexis.com/risk/receivables-management 800-869-0751 LexisNexis Risk Solutions assist debt recovery professionals with increasing workflow efficiencies, gaining greater insight into debt portfolios, collecting more in less time and achieving greater profitability.

Compliance Calling CallEvo CallEvo callevo.com sales@callevo.com 800-478-1084 CallEvo is the only fully compliant TCPA calling platform designed and engineered specifically to address EVERY item in the TCPA. Stop Scrubbing and Start Calling!

Electronic Payments Payscout Credit Card & Check Processing ACCOUNTS RECEIVABLE MANAGEMENT Merchant Services payscout.com | jennifer@apsofga.com 800-482-4561 Payscout provides a full range of electronic payment solutions, including credit, debit & HSA cards, check, and ACH transactions, along with multiple software integration options, web payment portals, and the IKEYgreat Product Suite with the attorney endorsed Reg E one payments brand. compliance solution.

ns of Dollars

from

Let us help your ARM company grow.

M software support compliance advocates

Contact us at: sales@payscout.com

‘

pport, and more:

Business Directory

888.689.6088

egistered ISO/MSP of Deutsche Bank Trust Company Americas, New York, New York. Payscout Brazil is nPay. Payscout is a registered ISO with VISA EU and Mastercard Intl. Payscout is a registered PF in LAC. arate approval. Copyright © 2016 Payscout, Inc. All rights reserved.

repreneurial Dream One Transaction at a Time.”

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Skip Tracing IDI Inc. idiCORE ididata.com sales@ididata.com 855-842-1410 Trusted for over a decade by collection agencies and collection attorneys. IDI provides fast, accurate and cost-effective consumer verification and skip-tracing solutions via online, API, and batch processing.

Reduce Cost, Not Quality.

Innovis RPC innovis.com 855-601-1915 Innovis is a leading provider of consumer identity information. The company’s RPC solution provides collection agencies with tools to improve contact and recovery rates.

LexisNexis® Risk Solutions LexisNexis ® Accurint ® for Collections lexisnexis.com/risk/receivables-management 800-869-0751 LexisNexis Risk Solutions assist debt recovery professionals with increasing workflow efficiencies, gaining greater insight into debt portfolios, collecting more in less time and achieving greater profitability.

LocateSmarter Batch & Online Skip Tracing Platform www.locatesmarter.com info@locatesmarter.com 888-254-5501 LocateSmarter is a data provider focused on innovation and data quality. LocateSmarter offers skip tracing products such as phone append, bankruptcy, deceased, cell phone scrubs and more.

Melissa Data Listware melissa.com greg@melissadata.com 800-542-7434 Melissa offers solutions that empower collection professionals with the right-party contact information for successful collections and account management efforts.

VeriFacts Payroll Promise verifactsinc.com sclark@verifactsinc.com 800-542-7434 Payroll Promise is designed to support a legal strategy by locating verified full time places of employment. The information returned is 100% guaranteed to be accurate.

September/October 2017 Volume 17, No. 5 Editor T. Steel Rose, CPA, ACG editor@collectionadvisor.com Managing Editor Joshua Fluegel josh@collectionadvisor.com Copy Editor Myrna Nelson Advisory Board/Columnists Fred N. Blitt Ron Brown Debra Ciskey Sam Edens Sam Eidson Nick Jarman Harry A. Strausser III Publisher Angie Rose angie@collectionadvisor.com Production Andrea Bergeron Paul andrea@collectionadvisor.com Subscription Changes Joshua Fluegel josh@collectionadvisor.com The opinions given by contributing authors are their own and not necessarily the opinion of our staff and ownership. All trademarks used are the property of their respective owner.

Collection Advisor (ISSN# 1556-0813) is produced six times a year by Abide Media, P.O. Box 92342, Southlake, TX 76092, 888-610-1144. Standard Mail postage paid at Sussex, WI 53089. ©2017 All Rights Reserved Magazine Publishing Group, Inc. Printed in the U.S.A.

September/October 2017

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“Payscout Supports the Entrepreneurial Dream One Transaction at a Time.”

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September/October 2017

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RMEx

Mobile Suite

Quantrax

WHY IS THE ONLY COLLECTION PLATFORM THAT HAS USED ARTIFICIAL INTELLIGENCE WITH SPECTACULAR RESULTS, THE INDUSTRY'S BEST KEPT SECRET AFTER 25 YEARS? The collection industry spends millions of dollars a year maintaining and enhancing core collection platforms. Software companies that failed to evolve, can not meet today's demanding requirements.

Against great odds and without a great deal of support from the industry, one company has quietly persevered.

Their innovative, intelligent technology has given small and large companies stunning gains in productivity, automation and powerful machine thinking that this industry has never seen.

In a modern era, the call for pioneering solutions to old problems has never been greater. Are you tired of hearing and reading about dated technology that has overstayed its welcome? Call us if you want to be amazed.

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