Should the rules change just because a customer owes you money?

Should the rules change when a customer owes you money?
Banks are increasingly at the forefront of mobile customer engagement. By virtue of the immense popularity of mobile banking applications on smartphones and tablets, they're in the process of transforming how, when and where customers are accessing most banking services.

Except for when a customer goes past due. When it comes to collections, banks are not leveraging their coveted place on the front screen of their customers go-to, go-anywhere devices.

This is a mistake.

I made a presentation last week at the Consumer Bankers Association annual convention on "tailoring the customer experience to enhance satisfaction and results" where I shared the findings from two recent consumer surveys we've conducted on what customers expect from the companies they do business with in terms of proactive engagement and collections.

Consistent in both these surveys was compelling evidence that customers want to hear from you before an issue has a negative impact on their lives:

When communications can avoid issues Should the rules change just because a customer owes you money?

To avoid issues like late charges for past due payments and negative reports to the credit bureaus, the surveys found consumers welcome proactive outreach from their creditors in a variety of channels, including email, interactive voice messages, text messages and push notifications to their mobile devices.

But, instead of leveraging this preference, banks are avoiding the use of these channels in their collections strategies, even those banks that are actively exploiting them for marketing and customer service. While that might be a reasonable, if overly conservative, policy from a consumer privacy and legal perspective, it has negative implications for both collections results and customer satisfaction. As one attendee noted after the presentation,

"When we stop using the channels that the customer expects us to communicate through just because they are now in collections, we run the risk of confusing them and losing their trust."

And those legal concerns may be overblown. If a customer has opted in to communications about their account in these channels for purposes of marketing and customer service, that consent should extend to collections. Even if the "opt-in" is based solely on the customer having provided their mobile number as their point of contact, the FCC has recently reconfirmed that this is evidence of the prior express consent required under the TCPA for automated communication to wireless numbers. In their just released declaratory ruling on the GroupMe petition, the commission said,

"Our clarifications here are consistent with the 1992 TCPA Order and the Commission’s 2008 ACA Order. The Commission stated in the 1992 TCPA Order that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” Based on this reasoning, the Commission found in the ACA Order that a consumer who provides his or her wireless telephone number on a credit application, absent instructions to the contrary, has given prior express consent to receive autodialed or prerecorded message calls “regarding the debt” at that number, including autodialed and prerecorded debt collection calls from a debt collector acting on behalf of the creditor."

Furthermore, our surveys found that when customers provide their mobile number, 84% believe no further opt-in should be required:

Mobile Consent 84 percent say provision consent Should the rules change just because a customer owes you money?

Given this, why are banks so hesitant to leverage mobile communications in collections? There may be concern about the ongoing risks of  TCPA litigation, but the FCC ruling and recent court decisions confirming that "provision = consent" should give collections executives encouragement to pursue a change of policy.

More importantly, not doing so may leave increasing numbers of mobile-only customers asking "why didn't you let me know?" as they begin shopping for a new bank.

Is there light at the end of the TCPA tunnel?

Michael O’Rielly, who was made a commissioner at the FCC just four months ago, has wasted little time before confronting one of the largest problems facing companies today – compliance with the Telephone Consumer Protection Act (TCPA).

In a blog published March 25, Commissioner O’Rielly says:

“The TCPA is supposed to protect consumers from unwanted commercial robocalls, texts, or faxes.  The FCC must hold bad actors accountable when they violate this law.  But the FCC should also follow through on the pending TCPA petitions to make sure that good actors and innovators are not needlessly subjected to enforcement actions or lawsuits, which could discourage them from offering new consumer-friendly communications services.”

The FCC is presently considering “several dozen petitions” asking them to declare or clarify that a particular service or method of communicating would comply with the TCPA. O’Reilly believes “tackling this backlog in a comprehensive manner will help restore certainty and reduce the need to file additional petitions.”

The prospect of near-term action by the FCC is extremely welcome news. According to ACA International (who has filed one of the petitions in question), TCPA related class action lawsuits have risen by a “staggering 592 percent in the last few years” and individual TCPA lawsuits filed against creditors and debt collectors rose to 1,862 cases in 2013 and had already reached 208 cases in January 2014.

As a result, many companies have scaled back on their customer outreach, especially to customers with only mobile phones, despite evidence that consumers value proactive communication about issues that can negatively impact their lives.

While the legal risks remain until the FCC takes action, at least one commissioner thinks the time to do so has come.

You can read Commissioner O'Rielly's entire blog post here:

Mediocre = Failure: Banks Must Do More To Satisfy Customers

According to a recent survey of 10,000 consumers, banks have decent rates of customer satisfaction when compared with other industries.

Unfortunately, "decent" sounds an awful lot like "descent", which is the glide path most banks will be on if they don't take steps to improve how they are perceived by their customers.

Of the 16 banks included in the Temkin Group's customer service survey of 235 companies, 12 scored at or above 50% — a middling benchmark — in customer satisfaction. According to Bruce Temkin, group managing partner:

"Overall, banks were actually among the higher-performing industries in the survey. But most were still in the mediocre range for customer service."

Many banks are focused on this problem, but may need to alter their thinking in order to solve it. U.S. Bank achieved the second highest satisfaction rate at 62%, and their executive vice president for 24 hour banking Jean Fichtel gives its front-line customer service staff much of the credit for improving first call resolution:

"When a customer makes the decision to call us, we want to make sure we have knowledgeable people ready to resolve the problem quickly. We've done a number of things from a process standpoint to empower our front-line folks to do that."

Taking care of issues immediately will undoubtedly please more customers than giving them the runaround or excuses. The problem with this approach is that once a customer has a problem, their satisfaction has already taken a hit. To avoid this, banks must do more to prevent problems occurring in the first place.

One way to do this is through proactive outreach about an event in the customer's relationship with the bank before it can cause them concern or harm. For example, notifying a customer that the balance in their checking account has fallen to a level that puts them at risk of an overdraft. Or alerts regarding suspicious credit card transactions and change of address requests that might indicate identity theft or account takeover attempts. A recent survey by Wakefield Research found that such notifications are welcomed and even expected by bank customers.

And if customers are involved in a multi-step process such as obtaining or refinancing a mortgage, proactively informing them of their status will ease anxiety and improve satisfaction. Providing regular updates on the process can also shorten cycle time for approval. If customer action is required, such as providing additional proof of income and assets, customers who have been conditioned to expect regular communication from their bank about the process are more likely to respond to such requests.

The payback on pro-activity is measurable. One top ten mortgage lender saw their satisfaction rates increase by over 10% after they began providing regular updates that kept borrowers informed of the status of their loan application.

And it's not just customers who are interested in a proactive approach. Regulators also care.

In announcing an increased focus on the transfer of mortgages from one servicer to another, CFPB director Richard Cordray made it clear he expected servicers to be proactive in communicating with borrowers:

"Consumers should not be collateral damage in the mortgage servicing transfer process. CFPB examiners will look for what the new servicer is doing to provide consumers accurate information about their loans, such as the amount they owe, the status of their loss mitigation application or plan, and their delinquency status, if relevant."

So if proactive communication helps keep customers and regulators satisfied, why aren't more banks doing it?

Cost may be one factor, but with the availability of cloud-based platforms for automated customer communication, personalized notifications can be delivered to via text, email or interactive voice message for pennies or less.

Another concern is that making outbound attempts to contact customers will increase the number of inbound calls the contact center must handle, as some of the outreach will undoubtedly raise questions in the mind of some customers. That may be true, but a well-designed outreach campaign will also include multiple options for customers to self-serve in response. And while inbound calls may increase, instead of starting the conversation with "I am upset and I expect you to fix it" customers will be saying "Thank you for letting me know".

That doesn't sound mediocre to me.

Reflections from Nuance Customer Experience Summit 2014, Interaction 14

interaction2014 Reflections from Nuance Customer Experience Summit 2014, Interaction 14Earlier this week, over 100 customer service professionals across leading brands gathered in sunny Palm Springs, CA for our 2014 Customer Experience Summit *. Primarily, the conference served as a forum for our clients to meet and discuss the challenges they face communicating with their customers in a world defined by budget cuts and rising consumer expectations. Through case studies, panel discussions, and breakout sessions we explored proven strategies and new innovations for streamlining customer engagement, reducing call center costs and improving customer satisfaction.

Throughout the three-day conference, attendees heard from a multitude of presenters on topics varying from “The Future of Intelligent Self-Service” to “Adding Context to the Customer Conversation” to “Innovators in Outbound.” A particularly interesting keynote which got the crowd buzzing was delivered by Micah Solomon on the topic of “Thinking-And Rethinking-Customer Service.” Micah is a #1 bestselling business author, and Forbes contributor, who wowed the crowd with a timely, informative, and funny address. Micah focused on ways that brands can adapt timeless principles of service to develop a truly competitive advantage, especially amongst Millennials with shifting expectations.  (Consider Kevin Bacon’s recent thoughts on this topic).

The convergence of outbound customer engagement and inbound self-service was an additional topic that resonated with the crowd. The ability to recognize a customer calling in response to proactive outbound campaign – via voice, email, text or smartphone push notification – without requiring them to explain themselves, has proven to not only enhance satisfaction but also significantly reduce operational expense. This is clearly the next wave of intelligent solutions that will define a quality customer experience.

Interest in voice biometrics surfaced throughout a number of breakout sessions and left a lasting impression on attendees from organizations in the healthcare, financial services, transportation and retail industries. Many expressed awareness that there is an obvious benefit in replacing traditional PIN and password methods of authentification with voice biometrics to reduce agent call time and enhance the customer experience.

Of the many major themes evident throughout the conference, the final one I’ll highlight is around the challenge of complying with the Telephone Consumer Protection Act (TCPA), written in analog days of 1991, and successfully communicating with customers in today’s digital world. Christine Reilly, a partner in Loeb & Loeb’s Consumer Protection Defense Department, provided the line of business owners in the audience with relevant information that will improve their ability to collaborate with their legal teams and craft successful outreach strategies. (More on how to address compliance challenges at

From insightful presentations to meaningful conversations, the Customer Experience Summit was a true success! We want to send a big thank you to the customers who shared their stories and to everyone who joined us. Until next time….

* Editor's Note: Customer Experience Summit is the conference formerly known as Interaction.

CFPB Scolds Mortgage Servicers



I saw something this week I hope to never to see again. An entire auditorium being lectured for misbehaving.

When I was in the third grade, our elementary school principal made us spend our recess period for a week sitting in silence while he harangued us for bad behavior. He was angry that we had failed to march in quiet single file out of the lunchroom on our way to the playground. Never mind that it was only a couple of rowdy kids who acted out. Kids who these days would probably be diagnosed as ADHD. We were all at fault.

I felt the same sense of injustice this week when Steve Antonakes, the CFPB's Deputy Director, gave the attendees at the MBA's National Mortgage Servicing Conference a stern talking to. After dispensing with the niceties of thanking the MBA for the invitation to speak, Antonakes quickly got to what was on his mind:

Nearly eight years have passed (since the mortgage crisis began in 2006) and I remain deeply disappointed by the lack of progress the mortgage servicing industry has made.

Lack of progress? The MBA's most recent report of mortgage delinquency tells another story. Overall delinquency is now lower than it has been since 2008, with 30 to 90 day delinquencies back to historical norms and slow but steady gains being made against the backlog of seriously delinquent loans.

MBA Mortgage Delinquencies 4q2013 1024x694 CFPB Scolds Mortgage Servicers

Perhaps Antonakes was more concerned about whether or not the industry is committed to abiding by the more than 1500 pages of new rules his agency has created in the past year. If he had stuck around for the rest of the conference he would have learned that not only is the industry ready to comply, but that it is anxious to continue working with the CFPB on resolving conflicts between their rules and other regulatory regimes under which the servicers operate. These include the FDCPA, state laws and the servicing guidelines of the government sponsored enterprises who charge penalty fees if their marching orders are not followed, even when to do so would violate the CFPB's rules.

The servicing leaders I spoke to at the conference are concerned about compliance but they're also concerned about how to operate a profitable business as they comply. Since many of the specific issues Antonakes says the CFPB is focused on involve better communication with borrowers, meeting these requirements as efficiently and effectively as possible will go a long way toward getting us out of the dog house with the regulators and back in the good graces of shareholders.

To assist with this, we've published a white paper Compliance by the Numbers: Six CFPB Rules That Impact Borrower Communication. It provides a summary of the bureau's requirements for borrower outreach and suggestions on how to meet these within an operational budget already stretched thin.

Powering up to deal with winter storms


We’re barely 60 days in to 2014 and we’ve already seen two Polar Vortex storms and widespread weather-related outages around the country. The National Weather Service has issued multiple winter storm warnings and advisories from the central Appalachian Mountains north to southern New England, including all of the Middle Atlantic States. The severe weather has caused at least 21 cold-related deaths across the country since Jan. 5. 

With temperatures reaching their lowest levels in 20 years, utilities across the country have been reeling as thousands have lost power. And demand spiked to record levels across much of the East. For these companies, it’s been nothing like business as usual.

Record Power Demand during the Polar Vortex

Company New Record Previous Record
Duke Energy Indiana  7,214 MW 6,975 MW (2009)
Duke Energy Ohio/Kentucky  5,105 MW 4,599 MW (2009)
Duke Energy Carolinas  20,246 MW 18,985 MW (2009)
Duke Energy Progress  14,190 MW 13,884 MW (2010)
PPL (Pennsylvania ) 7,784 MW 7,577 MW (2007)
Southern Company Georgia Power  16,859 MW 15,806 MW (2010)
Southern Company Gulf Power  2,694 MW 2,634 MW (2007)
Dominion Resources Virginia Power  19,730 MW 18,079 MW (2007)

Source: Duke Energy, PPL, Southern Company, Dominion Resources news releases

When super storms strike and the power starts to go out, the first thing that happens is a massive increase in inbound calls to customer service lines, typically within 15 minutes. Customers are demanding timely answers to why their power is out and what the estimated time of restoration (ETR) is. Call centers can quickly become overwhelmed and wait times grow.

Utilities need to proactively reach out to affected customers with customized messaging to address service disruptions. Any failure to communicate quickly and clearly puts customer satisfaction ratings at risk, something no utility company wants. Varolii, now part of Nuance Communications, has worked with a number of regional utilities to help them adapt to fast-changing circumstances and keep customers happy with timely updates.

Pennsylvania–based PPL Electric serves about 1.4 million customers across 29 counties. PPL leveraged automated outbound technology to send voice blasts to all its customers during Hurricane Sandy, the largest Atlantic hurricane on record. During their outreach efforts, they opted-in more than 60,000 customers for outage alerts in a multi-channel effort spanning voice, SMS, email and social media.

In spite of the terrible impact Sandy had, PPL customers came through the event expressing 80-90% satisfaction rates with the company’s alerts system. PPL continues to rely on us today to help them communicate effectively during these winter storms.

Our platform leverages Outage Management System data to provide a personalized message on ETR.  It enables utility management to conduct proactive, large-scale outbound efforts and combines the best in automated outreach and self-service capabilities.

By combining voice and text in a cross-channel integration, customers get the information they need, through the channels they prefer, leading to higher satisfaction with their utility provider. And automated solutions that deliver messages you can customize on the fly help reduce costs and the headaches that come from managing outage communications.

These solutions can also be used for the kind of unplanned, recurring notifications that utilities are often required to send. For example, if severe weather is disrupting life all around town, you may want to extend billing due dates.  Cost effective, on-demand outreach is the answer.

On Feb. 20, I'm hosting Planning for the Unpredictable: Mastering On-Demand Outreach. This webinar will discuss strategies for just this kind of situation and will let you experience on-demand outreach from your customer’s perspective.  Reserve your seat now.

We know that customers have high expectations for staying informed during an outage. The storms will keep coming. Are you ready to deliver?