There is still a lot of uncertainty within the ARM industry about the requirements to accepting different kinds of payments and many in the industry are reluctant to adopt new technology that may make the process more efficient and less costly, according to panelists who spoke during a webinar earlier today.
The webinar: Cutting Through The Fog of Payment Processing: How To Do It The Right Way, was sponsored by BillingTree and featured Rozanne Andersen, the chief compliance officer at Ontario Systems, and Chad Probst, the vice president of sales & business development at BillingTree as the speakers
Walking into some collection agencies is like taking a time machine back to the 1980s, Probst said during the webinar, a copy of which can be accessed here.
The emergence of new technology can be a boon for collection agencies seeking to connect with individuals, especially younger adults who are used to making payments with their smartphones, but many agencies are reluctant to make the necessary infrastructure investments. Concerns about whether the technology is compliant with state and federal regulations and worries about investigations by the Consumer Financial Protection Bureau are a major stumbling block for collection agencies.
“There is an appetite for people to pay using their mobile phones from their bank to another bank,” Andersen said during the webinar.
Collection agencies should be recording calls, especially those where a payment is made with a debit or credit card, Andersen said, because that oral confirmation provides authorization should a charge be disputed down the line. Agencies need to store those conversations from two years of the last payment date, not when the payments were started, she added.
Agencies should also be asking individuals whether the card number they are providing is a credit card or a debit card, Probst said. And when recording calls, agencies must take care to either encrypt the portion of the call when the card number is provided, or make sure to keep the card number and CVV security code separate. Keeping them together is a compliance violation, Probst said.
Collection agencies should also take care when selecting a payment processor, and should only be using ones that have experience in dealing with third-party debt collectors.
“We get panic calls every week from people who just got shut down by their banks,” Probst said. “That’s not the type of processors you want to work with.”
Said Andersen: “There used to be a band called New Kids On The Block. You don’t want that. They don’t understand the space. They have to understand third-party collections. What disclosures are required and how they are required. The ones with experience were not just born yesterday.”