This piece originally appeared in the January 2024 edition of MortgagePoint magazine, online now.
Do you ever get the feeling that someone is always moving the goal posts? That certainly seems to be the case when it comes to servicer call center communications. Historically, regulators have determined compliance by reviewing the timing of borrower communications and the content of written correspondence.
Now, banks and servicers are being placed in a position where the overall tone of a phone call with a borrower is being tested and judged, making examinations less objective by possibly introducing more subjectivity on the part of the examiner.
While objective requirements continue to be at the core of servicer reviews, servicers are now also evaluated on how well their call centers are “handling” the calls with borrowers, who are often distraught or confused or simply do not know the right questions to ask.
In a growing number of instances, complaints are no longer at the center of discussion when talking about the quality of a call. Instead, in a “damned-if-you-do, damned-if-you-don’t” scenario, call center agents are being cited for both not asking the right questions and conversely for “leading” the borrower down a path.
Let us take a “then vs. now” look at how an examiner might evaluate a call.
Traditionally, the examiner focused on:
If an outbound attempt was made …
- Was the call placed between 8:00 a.m. and 9:00 p.m. in the borrower’s physical time zone?
- Were there any existing requests from the borrower regarding contact, and were they followed?
- Was the frequency and pattern of the contact compliant?
- Were the Federal and State Mini Miranda requirements adhered to?
- Were the presumptions contained within the Debt Collection Rule violated?
During the conversation, did the agent …
- Refrain from obscene or profane language?
- Refrain from the threat of the use of violence?
- Was Right Party Contact achieved?
Now, however, the overall tone and result of the call can also come into play with these additional questions …
- Did the agent display empathy?
- Did the agent follow the prescribed waterfall for loss mitigation activity?
- Did the agent “lead” the borrower to a solution?
- Was the agent courteous?
- Was the borrower satisfied at the end of the call?
So, what is a servicer supposed to do?
Train. Test. Repeat.
Obviously, the quality and efficiency of any function within a servicing operation depends on people, and people are fallible and predictably unpredictable. To help control this, servicers create training programs and develop scripts for agents, but no script is all encompassing and not every borrower situation is identical. Again, what is a servicer supposed to do? Going forward, servicers will need to be vigilant about these changing requirements and demonstrate the steps they are taking to help call center associates develop better “soft skills.”
Being able to demonstrate and ensure this vigilance should involve ongoing training and ongoing testing, in the form of call reviews, both by individual leaders (including managers and supervisors and potentially high-performing call agents leveraged to assist co-workers), as well as in group settings, by utilizing actual call scenarios played out during training on a regular or as-needed basis. Based on my experience, the training will not be effective without the testing, because servicing leaders will inevitably be defensive when it comes to their staff’s performance. So, it is imperative to have a third-party conduct call reviews so that the call center leaders have clear and concise feedback they can incorporate into better and continued training. Additionally, identifying thematic scenarios and documenting the varied responses and outcomes to improve existing call scripts to assist agents should be a priority.
Are Call Centers Potential Minefields?
Servicers must ensure that they adhere to Fair Debt Collection Practices Act (FDCPA), Consumer Financial Protection Bureau (CFPB), and Coronavirus Aid, Relief, and Economic Security Act (CARES Act) regulations along with any state-specific rules, laws, or requirements in order to avoid Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) violations and/or official complaints to any of the regulating bodies. While technology, like automated dialers, has been invaluable in ensuring compliance to certain rules, the dramatic shift in call volumes and the numerous rule changes that call centers must adhere to have created unprecedented challenges to servicers over the past three years. To cope, servicers have had to hire agents en masse, with many of them lacking the necessary experience. Inexperienced agents in an intensely regulated environment where rules are constantly changing is a potentially hazardous combination: the metaphorical equivalent of a compliance minefield.
To get ahead of what is coming in future examinations, a servicers’ best course of action is engaging with third-party reviewers to demonstrate to their regulators that they are taking advantage of all available resources in order to protect their borrowers.