If you run or manage a financial institution, then you already understand how difficult staying ahead of collection compliance laws can be. Although staying compliant is not always an easy task, any mistakes can make it all but impossible for you to collect on delinquent accounts, and they can even result in legal problems.
Taking the proper steps and following an effective plan can work wonders to keep your bank on the right track. If you are unsure of where to start, the following information will get you moving in the right direction. In addition to learning about the most common issues, you will also discover some of the top tactics that are used by industry professionals to keep their records and collection processes organized.
Understanding the Problem
On Aug. 1, 2015, 677,200 consumers filed official complaints about various financial institutions, including issues related to loans, credit cards, student debt and more. The most common complaint was from people who felt as though they had no responsibility to repay the money that they had borrowed.
Other complaints, however, were filed by consumers who believed that the financial companies had not followed the proper communication protocols. No matter how well you follow the law, avoiding these setbacks is not always possible. You can do a lot to reduce the number of complaints that you receive, but knowing what to do after one has already been filed is also a vital piece of the puzzle.
Why it Matters
As a result of several consumer complaints, the Comptroller of the Currency ordered the Bank of America to pay $30 million to cover damages related to problems with collection compliance. When one of the largest financial companies in the nation is hit with such high penalties, it’s time to take notice. As the laws regarding the bank collection process become increasingly complex, everyone is at risk.
A company that is unable to pay the steep fines could even fail completely, and that is a chance you won’t want to take. Even if your company wins the case in court, the damage to your reputation can take a toll on your ability to attract new clients in the future.
The good news is that even with all of the regulations in place, avoiding trouble is not impossible. Taking the time to ensure that all of your advertising and marketing materials are compliant with company policy is a great first step. When you want to implement a bank collection process that is legal, always inform your customers of the terms before allowing them to move forward.
To avoid any problems, instruct them to sign paperwork that verifies they understand the process and still wish to proceed. Also, let each of your customers know about their right to revoke a mortgage within three days of signing the contract. These steps will go a long way when it comes to keeping you and your financial company out of legal trouble, but it’s not enough. You will also need to store your records in a secure location.
You and your team can remain proactive to safeguard your company, but doing so is often time-consuming. If you want to enjoy the benefits of accurate record keeping without investing too much time and energy, you might be interested in the IBS Collection and Asset Recovery Manager Software. Designed to track and report delinquent accounts, this software automates many of the tasks that currently require a significant amount of attention, but that is only the start.
The software also streamlines the reporting process to keep your company in compliance at all times. No matter if you run a small business or a large corporation, the IBS Collection and Asset Recovery Manager Software can optimize productivity and enable you to take your financial company to the next level.
Author: Brad Callahan, Freelance business writer, Dallas TX.