Deciding to outsource part or all of a financial institution’s collections tasks is no easy thing to do. Even when an owner recognizes that their in-house staff lacks the ability, resources, and time to minimize delinquencies, it is still hard to trust third-party vendors. If an owner decides to take the plunge and work with a collections provider, there are a few questions to ask before signing on.
Is the Company Licensed?
This question seems obvious, but it’s surprising how often it’s overlooked. Every state requires different fees, bonds, and licenses for third-party collections agencies, and it’s crucial that the chosen vendor is properly licensed to ensure that the client’s institution doesn’t face regulatory scrutiny.
What’s the Company’s Staffing Model?
Where collections are concerned, it’s tough to determine whether staff or technology is more important. Tech such as auto dialers will give collections agencies the ability to make more phone calls within a shorter time, but they’re useless without human interaction. Before hiring a vendor, understand the staffing model they deploy.
What Sort of Training Does the Staff Receive?
The frequency and nature of training collections providers give their staff is just as important as their staffing model. First-party collectors speak on clients’ behalf, and the last thing a client wants is for an unprofessional employee to be harsh or threatening to a delinquent borrower. Collection staff should be trained in unfair acts and practices, the FDCPA, the TCPA, and other compliance controls.
How Does the Company Access Clients’ Data?
There are two ways for providers to access clients’ data: they can get into the core system via VPN or secure FTP. It’s crucial to understand how data is exchanged. The first method gives people outside the institution access to borrowers’ sensitive information, while the second is more secure.
Schedule a Consultation Today
Vetting debt collection providers isn’t an easy or quick process. It requires full due diligence, but in the end, when a client takes the time to find the right provider for their institution, it’s worth the effort and time. Consult Kirk Chewning at Cane Bay Partners for more details.