Phoenix, AZ – September 5, 2014 – Time was, repossession agents would sell themselves to potential clients based on the size of the area they worked, how many trucks they had, or what new gadgets they had to help find cars. While those benchmarks are still important, today’s successful operators are now separating themselves from their competitors by showing how hard they are working at pro-actively striving to become more compliant.
Interpreting compliance is not simple – it’s like trying to put something together from IKEA without directions. But while agreeing on a single, completely comprehensive definition of compliance is an elusive goal, repossession agents who show they are aggressively trying to meet this challenge in an industry where the compliance burden is ever-growing, is what will separate those who succeed from those who ultimately do not.
“Those vendors who are meeting the compliance challenge head on are the ones that will see themselves thrive and succeed,” said Greg Ward, the System Sales Director for MBSi Capital Corp.’s Compliance Made Easy product. “Those who bury their heads in the sand or opt to willfully ignore what’s going on around them will find it very difficult to survive. Compliance has to be a key component of any vendor’s business plan.”
Making compliance part of the workflow is something that starts from Day One by systematically training employees to ensure adherence to proper policies and procedures. Lenders want to be able to see how repossession agents are training their employees, not just to make sure that they will do a good job, but also that they know the right way to conduct themselves.
“If you cannot readily show you are properly training your staff, tracking all of your complaints through to resolution and ensuring you have the proper licensing and insurance in place, it is fairly likely you will lose business to someone who does at some point in time,” Ward said. “Having the systemic ability to address these areas of compliance with reporting in place, business will grow and marketshare will increase.”
The threat of a CFPB audit or investigation has been used to scare many in the auto finance and recovery industries into spending thousands of dollars on products and services, but to date, the agency has yet to even hint at being interested in looking at how repossessors operate. While nothing has happened yet, industry professionals do believe that it’s only a matter of time before the CFPB’s interest level in the industry increases, which is why it’s important for those in the industry to comprehensively address areas of compliance today. Lenders nationwide are altering their service-level agreements with compliance addendums like never seen before. And the level of due diligence being conducted on vendors is more thorough than ever.
“The need to proactively make strides in the area of compliance is not something that is just going to up and disappear one day,” Ward said. “Compliance Made Easy is a common-sense systemic approach to compliance that will help create a sustainable business model in an ever-growing regulated repossession industry.”
MBSi’s Compliance Made Easy is a suite of products and services that integrates with a lender’s repossession assignment system of record and includes robust reporting capabilities. Those capabilities not only help repossessors show clients how serious they are about being compliant, but improve performance and drive revenue. The suite includes:
- Vendor Comply to track, share, and resolve consumer complaints
- Training Comply, for implementing and monitoring recurring internal and external training and systemic process change and communication notification tools
- Contract Comply, which stores important information such as licenses, certifications, insurance, coverage areas, fleet and employee information and includes automatic expiration notifications
Taken together, all of the products offered under the Compliance Made Easy umbrella offer vendors and lenders a timely and useful business function and marketing tool to separate themselves from their competitors.
“While we do not make the claim that if you use CME you are magically fully compliant,” Ward said. “However imagine being able to tell any regulator that you can track your complaints down to an accurate resolution percentage, you can tell what percentage of your complaints were valid and controllable, and that you have created and pushed training to your staff and vendors. In addition, you can show that all of your licensing and required insurance is valid and up-to-date, and in the event something expires, the assignment is held or closed automatically based on customizable business rules. Then, sit back and watch their chins hit the desk.
Tracking complaints is actually where Ward sees the biggest compliance gap between lenders and repossessors. Repossessors have been quick to brush complaints under the rug, in fear of how clients will react, even though most complaints are related to customers who are upset regarding a valid and lawful act of repossession, Ward said. His estimate is that 80% of complaints are not currently documented, which is actually doing the industry a dis-service. If regulators were to see that such a significant number of complaints were not valid or resolved quickly and properly, regulators’ comfort levels will actually increase and pressure will be taken off of the client in the long run.
”The need for vendors to provide systemic solutions for managing compliance for the lender has never been more important. Repossession agents need to “stop making decisions based on emotion and start making decisions based on solid data that can be provided with the use of CME.“One thing I have learned over the past year is that there are three types in this industry,” Ward said. “The ones who fight and oppose compliance, the ones who sit back and wait, and those who meet it head-on and actually see this as positive and take action. Let me say this: Which group do you think the top lenders will ultimately end up working with? That’s an easy question to answer, right? Here is maybe a more difficult one to answer. In which group are you?”