The Role & Importance of Compliance in Collections Services

In today’s highly regulated business environment, pressure to comply with regulatory requirements is on the rise. The debt collection industry has undergone seismic shifts to keep pace with changing requirements, as more business decisions now require further examination to adhere with all rules and regulations. As a result, businesses are now making process compliance a top priority.

In a corporate environment, Compliance refers to following all legal laws and regulations regarding how businesses, employees and consumers are managed – all done to avoid fraud, abuse, discrimination, waste, and other practices that disrupt operations and put businesses at risk. The primary objective is to ensure everyone acts responsibly and ethically, and implement safeguards with all parties involved in business processes.

According to Ernst & Young, it is important for compliance professionals to remember that success is not only about interpreting regulations and providing guidance, but also balancing responsibilities, adapting to shifting business environments and becoming agents of change.

In the collections industry, the role of Compliance is to uphold policies and procedures, and provide stability to protect clients and their customers from potential ethical threats. Compliance regulations also help to maintain confidence in the sector and lower the possibility of a crisis.

Vervent’s wholly owned third-party collections agency – Activate Financial – works closely with our clients to effectively manage compliance risk. To ensure that all staff, processes and documentation meet the highest standards and audit requirements, we implement comprehensive safeguards, including:

  • Comprehensive oversight and detailed process documentation to ensure policies, procedures and other enforced compliance initiatives are effective and properly executed
  • In-depth training for all employees to promote understanding of internal standards, procedures and requirements
  • Tight focus on due diligence and third-party relationships
  • Continual monitoring and auditing of program effectiveness
  • Development and enforcement of stringent data privacy and data security standards

Enforcing compliance for our clients enables us to detect and stop rule violations, protect the integrity of their business and their employees, ensure their customers are treated fairly, earn trust and credibility, and save their business from unnecessary fines and lawsuits.

To make this happen, professional collections agencies, like ours, rely on compliance programs that integrate external (federal and state laws) and internal (company policies) guidelines. These guidelines dictate procedures for employees and clients to follow as they work to implement best practices, adhere to all rules and regulations, and avoid actions that put the company at risk.

Corporate compliance is promoted among employees to:

  • Facilitate responsible behavior
  • Enable employees to reach their career goals
  • Promote a good working environment
  • Help employees stay focused on company goals
  • Increase understanding
  • Adhere to internal standards, procedures and requirements
  • Motivate recognition and reporting of any unethical or illegal action

To ensure effectiveness of compliance programs, organizations should make sure:

  • The scope of each is understood by all employees
  • The program has clearly defined objectives
  • Ongoing analysis for risk, controls, adherence & program understanding is regularly conducted
  • The entire program is reviewed at regular intervals to assess opportunities for improvement
Importance of Compliance
Importance of Compliance

Safeguarding customer information – such as personal, financial or contact details – throughout the customer experience is also a critical element of compliance. This is a tall order for most companies as rules are constantly changing and those companies are accountable for more client organizations.

Reputable collections service companies must keep pace with all the rules and regulations mandated by:

  • CFPB – The Consumer Financial Protection Bureau: Ensures banks, lenders and other financial companies treat clients fairly.
  • TCPA – The Telephone Consumer Protection Act: Regulates telemarketing calls, auto-dialed calls, prerecorded calls, text messages, unsolicited faxes and the National Do- Not-Call List.
  • FDCPA – The Fair Debt Collection Practices Act: Governs debt collection practices and prohibits debt collection companies from using abusive, unfair or deceptive practices to collect debts from clients.
  • EU GDPR – The EU General Data Protection Regulation: Harmonizes data privacy laws across Europe to protect and empower all EU citizens data privacy and to reshape the way organizations across the region approach it.

Compliance regulations are in place for good reason, and failing to adhere to them can expose businesses to risks that go far beyond just a fine. However, when appropriate care is taken and procedures are closely followed, compliance programs help protect organizations, their clients and their businesses against most types of legal and ethical violations.

At Activate Financial, our commitment to compliance enhances our credibility, integrity and process, and enables our clients to focus on growing their business.

To learn more about how Activate Financial compliance programs can benefit your collections processes, please contact us at 877.492.8750 or sales@activatefinancial.com.


  • CFPB (2018). CFPB. Retrieved from https://www.consumerfinance.gov/
  • CFPB (2018). FDCPA. Retrieved from https://www.consumerfinance.gov/ask-cfpb/are-there-laws-that-limit-what-debt-collectors-can-say-or-do-en-329/
  • Ernst & Young (2013). Financial services regulatory compliance: Changing demands require the right perspective. Retrieved from HTTP://www.ey.com/Publication/vwLUAssets/Managing_financial_services_regulatory_compliance/$FILE/1303-1044554_FS_Compliance_Bro_V12.pdf
  • (2018). EU GDPR. Retrieved from https://ec.europa.eu/info/law/law-topic/data-protection/reform/what-does-general-data-protection-regulation-gdpr-govern_en and https://www.eugdpr.org/
  • (2018). TCPA. Retrieved from http://www.experian.com/regulatory-compliance/consumer-information/tcpa-telephone-consumer-protection-act.html
  • FSCJ, (2014). The importance of financial sector regulation. Retrieved from http://www.fscjamaica.org/downloads.php?doc=zg9jdw1lbnrzl3nly3rpb25zl0ztqy1db21wyxnzluphbi0ymde0lnbkzg==
  • Gasior, M., (2018). What Is Corporate Compliance and Why It’s Important? Retrieved from https://www.powerdms.com/blog/what-corporate-compliance-is-why-compliance-is-important/
  • Kral, R. (2010). Effective Corporate Compliance Programs. Retrieved from http://www.corporatecomplianceinsights.com/effective-corporate-compliance-programs-ron-kral-candela/
  • Lexis Nexus (2018). Debt Collection Industry Faces Evolving Compliance Regulations. Recover from https://www.prnewswire.com/news-releases/debt-collection-industry-faces-evolving-compliance-regulations-300605703.html
  • PowerDMS (2018). What is corporate compliance and why it’s important. Recover from https://www.powerdms.com/blog/what-corporate-compliance-is-why-compliance-is-important/