Imagine trying to collect a debt that is owed to you and ending up paying $267 million to your debtors instead. Isn’t that bizarre?
This is exactly what happened to California-based debt collection agency Rash Curtis & Associates. In a lawsuit, the agency was found liable for placing over 500,000 unconsented robocalls to debtors in an attempt to recover the debt.
All the agency wanted was an efficient way to reach out to debtors and recover their debt. This is why they turned to robocalls.
Debt collection robocalls help you reach out to a lot of people in a short period of time. However, these robocalls also come with a lot of baggage that you have to be mindful of.
So what are these drawbacks of debt collection robocalls, and is there a more efficient alternative to it? This post will answer these questions.
Can debt collectors use robocalls?
The case described above may have raised this question in your mind so let’s get some clarity on this.
Can debt collectors use robocalls? Yes, they can.
So why were Rash Curtis & Associates dragged to court for making robocalls? Well, they were sued for making unconsented robocalls, unconsented being the keyword here.
Debt collection robocalls are quite commonly used to go through large lists of debtors quickly. However, there are many TCPA regulations that you need to follow when making these calls to maintain calling outreach compliance. These include:
- Robocalls on cell phones are limited to those who have given their consent to receiving such calls. Typically, you can get their consent by verbal confirmation or by getting them to provide their cell number in the loan application.
- Debt collection robocalls can only be made within specific hours, defined by the state where the debtor is located.
- You cannot make debt collection robocalls to anyone who has withdrawn their consent for receiving these calls.
- Every robocall must end with an option for debtors to opt-out of these calls. Typically, you can provide a number that can be dialed to opt-out.
- Debt collectors cannot make more than three robocalls to a number within a 30-day period.
For more details on maintaining compliance, refer to this handy TCPA compliance guide for debt collection calls.
Drawbacks of debt collection robocalls
Now you know that you can make robocalls to debtors as long as you comply with the TCPA regulations. But, I suggest that it shouldn’t be your go-to strategy for outreach because of the following reasons:
- Robocalls don’t ensure message delivery.
- Maintaining compliance with robocalls is tricky.
- There’s no way to follow up.
- Growing concerns of robocall scams.
Let’s see how each affects your debt collection process.
1. Robocalls don’t ensure message delivery.
Whether you use it to convey a reminder or an important update, you cannot be sure that the message was delivered appropriately.
Some call center solutions may provide you with comprehensive reports with details like how many calls were sent to voicemail, how many were picked, and how many were not.
But, these reports are post-campaign insights and still don’t guarantee message delivery. Here are some instances when that happens:
- The call may have been picked up by the wrong person (a family member, maybe).
- Debtors may not be able to catch the tone, speed, or accent of the recording and hence didn’t understand what was said.
- People may hang up immediately after hearing a prerecorded message thinking it to be a telemarketing call.
You won’t find out about these instances in your report, and that could seriously affect your overall reach.
2. Maintaining compliance with robocalls is tricky.
Formulating and sticking to a strict set of rules regarding debt collection robocalls has always been a struggle for the FCC.
In a recent example, in 2015, the FCC came out with a ruling that agencies attempting to get back government debt do not need consent to call cell phone numbers. This exemption was reverted in 2020.
Another example of the FCC changing regulations frequently is the new ruling that was passed in 2019. This rule posed a limit to the number of robocalls that could be made to a single number to three a month.
To comply with these (and other FCC) regulations, you always have to stay on top of new FCC rulings and update your campaigns accordingly. That can be a hassle. A single slip, and you could be facing an expensive lawsuit.
3. No way of following up
If you wish to continue the conversation with a robocall, all you can do is leave your contact info at the end of the message and hope that the person gets back to you.
Firstly, the chances of that happening are very low because people are not always motivated to get back to their creditors. Moreover, a robocall also fails in the following instances:
- If a person is busy, there is no way for them to schedule a callback.
- You won’t be able to provide any extra details that the debtor may need to go through the payment – for example, the possibility of a revised payment plan.
- The possibility of a debtor trying to negotiate a revised payment plan is restricted. You will have to wait for the debtor to call you back to discuss this, which in turn would delay the process.
4. Growing concerns of robocall scams
Robocall scams are on the rise, and one in every ten Americans is scammed by them, leading to a total loss of $9.5 billion a year.
The scam often entails people calling debtors and threatening them with a police complaint or lawsuit if they don’t pay a certain amount upfront to buy more time. They leverage the fear of jail time or lawsuits to get people to give out money.
Scammers are getting increasingly creative and procure user data from large-scale breaches of popular companies. They use this data to impersonate authentic businesses making it harder for people to differentiate between a scammer and a legitimate business.
These scammers leverage robocalls, so they don’t even have to be in the conversation, thereby eliminating the possibility of raising suspicion during the conversation.
But how does this affect your calls?
Well, the increasing concerns of robocall scams lead people to become more skeptical of robocalls overall which in turn leads them to:
- Hang up as soon as they hear an automated message to avoid getting trapped.
- Opt for solutions that help them avoid these calls. 25% of consumers have already implemented a tool for screening robocalls.
- Block your phone number, thereby making it difficult for you to call them again, at least from the same number. At least 60% of people do this.
Collectively, all these actions reduce the reach of your robocalls.
How can you make debt collection calls instead?
If the points above have gotten you second-guessing about making debt collection robocalls, then let’s take a look at an alternative you can use.
The perfect alternative needs to:
- Help you get through large, exhaustive lists quickly.
- Be efficient, so you’re not wasting time on trivial things like waiting on the dial tone, landing on answering machines, etc.
- Ensure you’re compliant with TCPA regulations.
Automated debt collection calls with a TCPA compliant dialer, like CallHub’s Fastclick dialer, is your answer.
They provide you with the best of both worlds– the reach and efficiency of robocalls and the personalization of manual calls.
How does a Fastclick dialer work?
Unlike other outbound dialers, a Fastclick dialer requires human intervention to initiate a call. When setting up a campaign, you will have to assign an agent who clicks a button to dial a number rather than the dialer doing it automatically.
The FCC defines an Automated Telephone Dialing System as “equipment that has the capacity to:
- Store or produce numbers to be called, using a random or sequential number generator, and
- Dial such numbers.”
Since the system doesn’t use a random or sequential number generator to queue and dial these numbers, it maintains compliance.
Sure, we understand that there are drawbacks to making these automated calls too. For example, you need more people to make these calls and actually speak to your debtors.
But the benefits far outweigh the disadvantages.
Here’s why automated debt collection calls with a Fastclick dialer are perfect for you:
1. Maintaining compliance
With a Fastclick dialer, maintaining compliance is a breeze. Since the dialer requires human intervention to place a call, it doesn’t fall under the definition of an auto dialing system as per the TCPA.
This means that you can place calls to both cell phones and landlines without prior consent since you’re manually initiating the call. And you don’t have to worry about fluctuating regulations either.
2. Calling speed
The Fastclick dialer allows you to control the calling speed (dial rate). The dial rate defines the number of contacts the dialer dials at a time.
For example, if the dial rate is set to 4, when the agent initiates a call, the dialer dials four numbers at a time, and all the answered calls are connected to free agents. If a call is answered and there is no free agent available, the live call will be kept on hold for a while until an agent can receive it.
Generally, the calling speed is kept low if the list is clean (i.e., every number you dial is being picked up). You can increase this speed based on the quality of your list.
The Fastclick dialer allows you to increase your dial rate up to 10X to help you speed up your calling and get through larger contact lists.
3. Integrated follow-up options
Since CallHub is a comprehensive calling solution, it is integrated with features that help you keep the conversation going. One such notable feature is the text through call center feature.
Do you want to send a payment link or other details immediately after the call? This feature allows you to send out a text to the number you just dialed from the calling dashboard itself.
4. Calling scripts
Whether it’s a new hire or an experienced caller, there are a lot of best practices that debt collectors need to follow when conversing with debtors, as per the FDCPA regulations. For example, collectors cannot disclose the details of the debt to anyone except the debtor.
With detailed debt collection call scripts that highlight these best practices, you can ensure that your callers always comply with these guidelines.
When making calls, CallHub displays these scripts on the calling dashboard. Callers can refer to them while interacting with the debtor.
5. Caller information at hand
CallHub also displays personal details of each contact to the callers when they make calls.
But how does that help?
When making automated calls, callers can use this information to drive conversations. For instance, if a debtor isn’t capable of making a payment, callers can negotiate a restructured payment plan suitable for them.
This isn’t possible when making debt collection robocalls.
Takeaway
Debt collection robocalls have a lot of challenges, and the regulations that the FCC comes out with from time to time don’t make it any easier. Debt collection is already a challenging task. You don’t need to add to the challenge with the complications related to robocalls, especially when you have the option of making the process more efficient with automated calling.
To know more about how to make automated debt collection calls without breaking any rules, check out our post on Automated debt collection calls and how you can adopt them.
Featured image source: Karolina Grabowska
