For a practice that has been commonplace since ancient Babylon, debt collection has come a long way in favor of the consumer. Today the industry’s previously notorious tactics have been completely transformed. Colonial America’s “writs of attachment” and “bawler-outs” attempting to publicly shame consumers into handling their debts have evolved into compassionate, consumer-centric service providers motivated by the ability to help consumers regain financial health— and it all started with the introduction of technology.
In the 1940’s collectors began using phones, a small improvement for consumers, but even when collections moved from the streets to the phones, aggressive tactics were commonplace. Later, automatic dialers were introduced, and then, in the 1960s, collection efforts developed the first automated letter processes when punch-card machines were applied to generate collection notices. Both technologies allowed collectors to ramp up the volume of contact with consumers and collection strategies began to mirror those of high-volume telemarketers.
These practices continued until the mid-seventies when more consumer protection laws were put in place, eventually paving the way for the Fair Debt Collection Practices Act (FDCPA) in 1977. The FDCPA gave consumers an avenue to dispute debts and established repercussions for collectors engaging in harassing or abusive practices. A few years later, in the early 1980s, interactive voice response (IVR) systems became commercially available and widely adopted by the industry. This gave consumers the first opportunity to resolve their financial obligations on their own.
The FDCPA and IVR marked the beginning of a new era and a marked shift in collection tactics. As the IVR technology evolved, it removed the need for person-to-person interactions entirely, allowing consumers to make payments and get account information independently. The technology would be the first of many designed around self-service.
The development and rapid adoption of the PC in the late 80s paved the way for a technology boom over the next decade. By the mid-nineties, websites, chatbots, and avatars were available for commercial use. This was a new opportunity to provide consumers with self-service solutions; in 1995 the first financial institution offered consumers online account access and by the mid-2000s most financial services had followed suit. With online account access came a new level of billing transparency, the convenience of round-the-clock service, and easy ways to make payments— all big boosts to consumer satisfaction. Additionally, chatbots and avatars linked to online portals gave consumers the option to get assistance without the necessity of speaking with an agent.
While these new technologies created a better experience for consumers, they eased the burden on agents in call centers. With much of the pressure off and a new perspective, one that illustrated that more and more consumers would manage their debts as long as they had the information and tools to do so. This coincided nicely with the commercial release of speech analytics in 2004. Speech analytics offered a way for all call center interactions to be monitored and mined for data. The insights gained from the new data paved the way for process improvements of all kinds and a new strategy for agent/consumer interactions— one based on positive reinforcement that helped eliminate a negative perception of debt.
Agencies saw improved results with this new collections model and it fueled the adoption of more consumer-oriented technologies. In the last few years, the popularity of smartphones has led to even more convenient account access with mobile apps and more consideration for consumer preferences with omnichannel communication methods such as text and email. Thanks to technology, today’s consumer experience is a complete 360 from those centuries ago. Consumer protections continue to evolve too. Recent changes to the FDCPA ensure greater consideration for consumer preferences when it comes to electronic communications.
Professional prides itself on being ahead of the curve, engaging in the cutting-edge of technology and data science to ensure a superior consumer experience. From self-service portals and mobile technologies to omnichannel communications and analytics, our goal of continuous improvement means we provide consumers with the tools they need to become debt-free while guaranteeing the best possible results for our clients.
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