With three of every four adults in the U.S. using smartphones, according to some estimates, it’s no surprise that lenders and third-party agencies are developing apps and QR codes to collect debts.
In today’s post-PC era, everything is shifting more toward notebooks, iPads, and smartphones, a move that allows for affordability and portability. Mobile payment solutions are critical to the evolution of the collection industry, assuring customers that companies are keeping pace with ever-changing technology, said Bob Perrin, president of collection agency Williams & Fudge Inc.
“For consumers, the nice thing is that they can pay anywhere, download anywhere,” Perrin said at a recent conference. “The portability is a key thing.”
In fact, 78% of U.S. adults have smart devices, according to data from Flurry Analytics. Further, adults who use text messaging average 41.5 text messages a day; among 18-to-29-year-olds, the average is 87.7 text messages per day, according to the Pew Research Center.
Tapping into the growing mobile trend is an obvious evolution for the collection industry. And Williams & Fudge (www.wfcorp.com), for one, has gotten in on the game. The Rock Hill, S.C.-based agency averages four or five hits on its mobile app per week ― 10 to 15 hits on a good week. “But if I get a $2,000 payment, I’m very happy,” Perrin said.
Besides, app usage will increase “as the industry shifts in that direction,” he added. “Let [debtors] take snapshots of checks and send them to us. They don’t need routing numbers, collector contact information, their account number ― it’s all saved to the debtor’s phone.
QR codes, or mobile tags, are another up-and-coming tool that collection agencies are increasingly using to spur payments. For collections, a QR code could link to a payment portal or “app store,” download contact information, load a text message, or dial a specific phone number. “A QR code can be used to tie to a specific contact in your call center,” said Mike McDonnell, vice president of sales for the Eastern region at Dantom Systems Inc. (www.dantomsystems.com). “For instance, high-balance accounts don’t go to the collection floor, but to a specific collector.”
One of the benefits to mobile tags is that once they’re created, they don’t have to be modified, McDonnell said. Changes are made to the web site to which consumers are being directed.
Also, collection agencies can add design components to QR codes. Tags can be rendered in color or in black-and-white. The size of the tag can be modified, and they can include logos or customized color schemes.
Adherence to the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act, as well as other Fair Trade Commission and Consumer Financial Protection Bureau regulations have kept some firms off the mobile collections front. But a strong opt-in process and security features should offer solid protection.
With mobile apps and emails, one of the critical requirements is consumer consent. “Once you gain consent, you don’t have nearly as many problems,” said Chad Echols, principal at The Echols Firm LLC.
Another crucial component: comprehensive terms and conditions. With mobile apps, consumers should be required to agree to the terms and conditions at the time of download, as well as at each use, Echols said.
Unlike collection calls made to cell phones, which debtors can claim that they were charged for, apps are used at the consumer’s discretion. “We don’t know where that consumer is when they download that app,” Perrin said. “That’s why we include all that state-specific language.”
Williams & Fudge’s app is available for iPhone or Android, and it allows consumers to set payment intervals and payment dates, among other things. “They can add any directions they want to give us,” he said.
Another benefit to mobile functionality: “When we talk to [consumers] on the phone, they’re very hesitant [about providing information],” Perrin said. “Online, they fill in everything.”
As such, “the chance for this being in litigation is slim,” he added. “The consumer is opting in to have access to this.