Beyond Compliance: Creating A Consumer-Centric Debt Settlement Industry

Renauld Smith • 12 Apr, 2023


Beyond Compliance: Creating A Consumer-Centric Debt Settlement Industry

As the debt settlement industry moves forward in a shaky economy, self-policing and taking ownership of the industry's future are becoming increasingly important. Economic crisis presents an opportunity to many industries, and it is crucial to ensure we remain the trusted resource to consumers who need help with debt.

Looking back at 2008-2012, we know it can also create a problem if people and companies treat it as an opportunity to capitalize on rather than a problem to solve.

Proactively establishing standards that create a responsible marketplace will protect consumers while strengthening the overall landscape.

IAPDA understands that meaningful change starts from within. We're proud to help create a culture of thought leadership where member companies demonstrate a commitment to quality and surpass the minimum requirements set by regulators.

An Outside Example

Few organizations see the firsthand effect of the medical debt crisis as closely and clearly as the debt settlement industry does. Our clients and prospective clients reach out daily with stress, strain, and stories of their struggles with medical debt.

The medical debt problem also caught the attention of the credit bureaus.

It has long been a problem that a health emergency can lower a credit score. We must care for ourselves when we are hurt or ill, but the medical expense associated with that care isn't always within budget. To make matters worse, when people go to the hospital for one day, they come out with a dozen bills from a handful of practitioners. Mix in a need for clarity of what insurance should or should not cover, and consumers are left to figure out the $195 billion in medical debt collectively owed.

As a result, people are often left with a pile of debt that has nothing to do with their creditworthiness and a damaged credit score, adding literal insult to literal injury.

Clearly, that was all a problem. After pressure from consumer advocates, the credit bureaus worked together on a joint measure to change the reporting of medical debt without legislation forcing them to do so.

This kind of progress is only achieved through self-policing and taking ownership of our industry's future.

Making this change on their own can be seen as a sign of respect for consumers and is the kind of progress that starts from within. It also prevented the risk of FDCPA and FCRA claims, as they enacted this business policy of their own accord rather than waiting for regulation to require it. If they had not made internal changes, changes likely would have been forced upon their system.

When you fall short of an internal business policy, you have a customer service issue.

When you fall short of regulatory compliance, you have a legal issue.

Which would you rather deal with?

By creating consumer-centric business policies, you provide a much-improved customer experience and minimize legal risks.

Lead The Charge

IAPDA is challenging our member companies to go beyond compliance and develop consumer-centric business practices. We know that if companies take ownership and leverage their organization as a resource for change, our industry can make a meaningful impact on the lives of many.

Here are several key areas where IAPDA member companies can join us to ensure our industry remains a trusted resource for consumers facing debt struggles.

1. Ethical Enrollments

Don't just put the customer first- put the prospect first, too. It's important to provide accurate information about the services you provide, free of bias and exaggeration. Focus on the positives that debt settlement offers without marketing your service as a one-size fits all solution. If an advisor sees a better option, empower them to point the prospect toward that better fit.

2. Market through Education

Unpredictable economies create a need for financial literacy and resources. Deploy high-quality educational content to your website and social media channels. Provide perspectives on industry news, debt settlement topics, and personal finance education that can be shared with the public.

3. Service through Knowledge

You don't sell cogs with a simple instruction manual. You provide a complex but effective solution to trouble debt. Be the best resource for your clients by ensuring all staff is certified and knowledgeable about the services and strategies available. Don't just educate enrollment advisors but also negotiators, customer service representatives, marketing, and management. Ensuring staff is cross-educated raises the playing field for all.

4. Measure Success

Don't just measure the success of your services by enrollments. Track customer satisfaction, performance metrics, and outcomes. Follow up with completed clients one year, two years, and five years down the road. Not only will this help you refine your processes and provide better service, but it will also be a key factor in gaining consumer trust in our industry by showing the long-term impact on a customer's long-term financial lives.

Leadership is about taking ownership of our industry's future and ensuring that our members provide the highest service and care. Join IAPDA in making a meaningful impact on our industry's progress. Together, we can create a better tomorrow for consumers facing debt struggles today.

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