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How financial institutions have seamlessly adapted to Regulation F

The debt collections industry has seen plenty of regulatory changes over the years. The most recent US change is Regulation F, which was enacted in late 2021 as a modification of the Fair Debt Collections Practices Act (FDCPA). This act seeks to regulate the relationship between third-party debt collectors and consumers in order to improve the experience of the latter. Regulation F seeks to bring legislation into line with modern technology and communication practices being used in collections and recovery.

Now that the industry has had time to operate under Regulation F, what impact has it had and how have businesses adapted to the new restrictions?

Optimizing omnichannel communication

Regulation F has brought with it heavy restrictions on communications to help protect consumers from abusive practices. Among these restrictions, phone calls have seen the greatest changes with the introduction of the 7-in-7 rule. The rule stipulates debt collectors can only make 7 calls in the space of 7 days and effectively constrains the outbound communication model most businesses relied on.

Businesses have adapted to the 7-in-7 rule by optimizing their approach to omnichannel communications. Regulatory clarifications were provided around emails and text messages including the obligation to include clear opt-out opportunities in outbound communications and prohibiting the use of work phone numbers. By utilizing all communication channels and shifting to an omnichannel approach, businesses are able to maintain their communications while providing customers with a harassment-free debt collections process.

Improving CRM and customer intelligence

With an increased emphasis on omnichannel communications, businesses need to have a greater understanding of and relationship with their customers. Consumers are now empowered to easily flag texts and emails as spam if they see them as irritating or invasive, and the opt-out rule means they can easily exit communication altogether.

Businesses have adapted to these layers of restrictions by improving their customer intelligence and management. Understanding consumer preferences makes businesses better suited to communicate with them on a cooperative level that benefits both parties. Understanding the best time of day to communicate and the customer’s financial situation is guaranteed to boost operational efficiency and improve the experience.

Making operations more efficient

Regulation F’s restrictions have also resulted in a greater focus on operational efficiency for businesses. Where debt collectors once relied on phone calls to communicate with customers with considerable success, they’re now optimizing the precision of their omnichannel communications and customer data to reach the same level. This operational optimization is a positive byproduct of Regulation F that leads to businesses improving other aspects of their operations and becoming more efficient.

An example of the improved operational efficiency brought through Regulation F is businesses using customer data to understand the best time of day to make contact. This data is based on their activity, work life and other variables that indicate the highest chance of engagement and ultimately, successful outcomes.

Regulation F has brought with it a greater emphasis on utilizing available technology to provide a better experience for customers and improve the success of collections operations.

Optimize your business to adapt to Regulation F

For financial institutions post Regulation F, it’s clear that having a good understanding and knowledge of your customer is paramount to success. To achieve this, you need a platform which enables cooperative relationships and offers layers of actionable information.

To learn how Debt Manager is revolutionizing communication between debt collections operations and customers, contact us today.

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