Navigating Regulation F With AI

Implementing and navigating Reg F is a team effort.

Reg F arrived in November 2021, so we've been working with it for a while now, but as we've seen with our consumer finance customers, it's still tricky to get it right.

As an amendment to 12 CFR part 1006, which implemented the FDCPA, Reg F created new communications requirements for debt collection groups and agencies

In short, with new regulation came new responsibility. Let's check in on your team's Spidey sense and talk about what makes navigation easier.

Manual Compliance Adherence Doesn't Work

One of the most challenging aspects of Regulation F has been maintaining seamless, standard and consistent interactions with consumers across channels. Manual auditing of 100 percent of multi-channel conversations with consumers with respect to Reg F is impossible. 

However what we've seen is that debt buyers and collection agencies that are serious about adhering to Reg F have seen enormous success using technology to automate the audit process across all communications channels.

AI-powered contextual insight and automation gives every opt-out and dispute the necessary attention and response, and honors every restriction requested by a customer. Additionally, maintaining the most important compliance records becomes easy. None of this is possible manually.

It's time to step into the future.

Bringing automation to collection workflows is imperative for modern debt collection firms to anticipate and eliminate Reg F and other compliance risks and thrive in the new regulatory environment. 

Let's take a step back and examine why automation is so critical to compliance success. What are the major implications of Reg F, and what does AI do to help solve them?

3 Major Implications of Reg F

First, we must take a look at the implications of the new rules. Let’s begin with a familiar one. 

1. The 7/7/7 Rule

This rule states that: 

  • Collectors can’t make more than 7 attempts to contact a borrower in 7 days
  • If they achieve RPC and speak to a borrower, they must obtain call-back consent in order to reach out again within the next 7 days
  • Voicemails are still considered contacts

The implications are heavy: violating 7/7/7 leaves you open to lawsuits. Given the varied ways agencies define rules and set up dialers, this could be more common than it seems.

2. Clear and Conspicuous Disclosure

Clarity is critical to agency success in adhering to Reg F. 

If an agent gives a disclosure, it has to be clearly stated, and the customer needs to understand what they said, period. If it isn't clear, and if it isn’t clear the customer understood, that constitutes a violation and can have dire financial consequences for the agency. 

3. Digital Communications

Agencies also use CFPB guidelines to contact consumers through digital communication channels. Importantly, these emails, SMS messages, and other digital communications don’t count toward the 7/7/7 rule, allowing for additional contact points. 

But agencies have identified that these forms of communication also represent possible areas of failure to provide the correct messages in a clear and conspicuous way. Additionally, while most debt collectors have in place some form of speech analytics, a lack of oversight and insight into emails and text communications remains, opening a new area of risk. 

How Can AI Support Agencies and Lenders Navigating Reg F?

Compliance with Reg F requires total call visibility and compliance violation transparency.

Because so many contact centers use sampling or static tags to cover QA and compliance, full coverage is rarely realistic.

But software built on consumer finance conversations that uses machine learning and AI can provide that full coverage after the call as well as supporting agents to avoid compliance issues before they happen.

A best-in-class software solution will help you navigate Reg F with:

  • Automated and standardized notes

Historically, agent notes have a burden - inconsistent, incomplete, and filled with irrelevant information.

A solution to automate and standardize notes supports compliance by allowing managers to search for and aggregate the information they need, as well as ensuring contacts are tracked correctly. Bonus: relieving your agents of this dull administrative task relieves some of their stress.

  • Wrong disposition reports

AI can analyze the call and compare its contents to the disposition on the call, then flag any “wrong disposition” calls, which can be corrected. 

  • RPC contact reports

Your tool should analyze calls to see where RPC was established, and flag all calls (in near real time or end of day) where RPC was done and no call-back consent was given. This can then be fed to dialers to ensure that those accounts aren't called back within the time period. 

  • Real-time agent assistance

Humans are great at a lot of things. Multi-tasking isn't one of them. Look for a solution that includes real-time agent assistance to guide representatives through a call and remind them of the required steps so they can focus on customer service and call outcomes.

  • Limited content messages

Voicemails your agents leave are so often left out of the call analysis, but they must comply with LCM formats. Your AI should help you understand whether that’s the case for every call. Additionally, it should flag all calls recorded as “voicemails” where no messages were left (calls that don’t constitute “contact” but rather a contact attempt), allowing you to differentiate and maximize voicemail opportunities — as well as stay safe under the LCM safe harbor rules against third party disclosures. 

  • Easy reporting

We hear from customers who have relied on antiquated speech analytics tools for too long how much of a burden reporting is. Switching to a solution with simplified and automated reporting options makes QA and compliance evaluation so much easier, freeing you up to coach your agents and improve results.

Getting Started with AI Contact Center Solutions

If you don’t already have full call coverage or the right compliance framework — or if you think you have it but haven’t encountered a major Reg F challenge yet to prove it — it’s time to start considering how machine learning can help.

We can start clearing your path toward compliance and peace of mind.