If you are managing or running a financial institution, you already know remaining ahead of collection compliance laws is extremely difficult. Despite the difficulty of remaining compliant, if you make any errors, you may be unable to collect for delinquent accounts. You may even encounter legal issues.
Compliance for Bank Collections
Keeping your bank moving in the right direction is easier when you follow an effective plan of compliance and collections, and take the correct steps. If you are confused as to where to begin, the following information will assist you in beginning the process correctly. Not only will you learn about the most frequently seen issues, but you will also understand the best tactics used by professionals in the industry to ensure the collection process and all records remain organized.
Understanding the Issue
During August of 2015, official complaints were filed by 677,200 consumers regarding different financial institutions such as issues regarding credit cards, student debt and loans. The most common complaint was from individuals who did not believe they should be responsible for paying back the money they borrowed.
Some consumers filed complaints because they felt the financial institutions did not use the correct communication protocols. Even if you follow the law perfectly, there are some setbacks you will be unable to avoid. What you can do is decrease the number of complaints you receive. It is vital to understand the actions you need to take after a complaint has been filed.
The Reasons Your Actions Matter
Due to numerous consumer complaints, Bank of America was ordered by the Comptroller to pay for $30 million for damages related to issues regarding collection compliance. Since Bank of America is one of the nation’s biggest financial companies, penalties this high need to be noticed. Everyone is facing a risk due to the complex laws for the bank collection process.
Any company without the means to pay large fines is at risk of failing completely. You do not want to take this risk. Even if you go to court and win your case, your reputation can be significantly damaged resulting in the inability to attract new customers as time passes.
There is good news despite the regulations currently in place. You can still avoid any issues or trouble. One of the best first steps is making certain the banking collection process you implement is legal. You should not allow your customers to proceed with the process until they have been informed about all of the terms. You can avoid numerous issues by instructing your clients to sign paperwork showing they understand the process required, and are still interested in moving forward.
Every customer needs to be informed they have the right to revoke their mortgage provided the contract was signed during the past three days. These steps are very important to make certain your financial company does not get into any legal trouble. This process by itself is not enough because your records need to be stored in a secure location.
The Importance of Technology
You can safeguard your company by ensuring you remain proactive, but this will require time. There is a way to enjoy the advantages of keeping records accurately without using all of your energy and time. You may be interested in IBS Collection and Asset Recovery Manager Software. This software was created for tracking and reporting delinquent accounts. Numerous tasks are automated by the software that required a lot of your attention in the past, yet this is just the beginning.
The reporting process is streamlined by the software to make certain your company is always in compliance. Whether you are running a large corporation or a small business, your productivity can be optimized by this software. The result is ensuring your financial company is able to reach the next level.