Machine learning built for debt collection can help your business recover more by spending less for better results. One example of this is Retain debt collection software, which specializes in sending digital communications and using machine learning to give businesses the ability to use personalization at scale. Let’s dive into how your business could use Retain’s machine learning to boost debt collection.

What is Machine Learning for Debt Collection?

Machine learning is a subset of AI that learns and improves its core function over time. The technology does this by analyzing large amounts of data (in Retain’s case, engagement data from digital debt collection communications). These algorithms learn from the insights it gathers to make better decisions. The more data is observed, the more machine learning algorithms will improve. 

Retain uses a patented machine learning algorithm called “Heartbeat” to automate digital communications for debt collection. Heartbeat’s intelligence dynamically selects the time, message and channel that are most likely to be engaged with by each individual consumer. Plus, it becomes more effective as it gets to know the unique preferences of the customers you’re serving.

Machine Learning Makes Personalization at Scale Possible

More than ever before, consumers expect businesses to adhere to their preferences. Retain’s machine learning makes debt collection personalization at scale possible through: 

• Content Selection: Based on the content templates your business has built, the machine learning feedback loop figures out what content will resonate based on data points related to that customer. 

• Expert Timing: Machine learning helps your business reach customers at the right time while staying compliant within client-defined parameters, applicable law and legal guardrails. 

• Channel Selection: The machine learning algorithm also decides which digital channel to use, email, text or voicemail drop, for each communication based on predictive models and dynamic engagement feedback.

• Resource Optimization: Through data, Retain’s machine learning dials in the amount of effort to put towards each account. It builds an outreach strategy that’s focused on optimizing operational efficiency and recovery outcomes. 

Machine learning technology leans into personalizing the process, which leads to a better experience for consumers. When businesses scale their collections through technology, it helps them attain better margins while putting consumers first. It goes beyond simply having a generative AI tool create a message or content template. Machine learning is making informed decisions based on the nuances of your business and behavior of consumers.

Debt Collection Strategies Benefit from Testing

At its core, debt collection is about engagement, and one of the best ways to maximize that in digital communications is through testing. Let’s start with content. Retain’s machine learning helps to optimize your debt collection strategy by analyzing which of a business’s approved message will resonate best with consumers. It facilitates data-driven A/B testing which offers insight into the most effective tone and call-to-action for better personalization at every step of the experience. 

For example, let’s say a customer hasn’t been responding to a strictly informative email outlining their debt. Machine learning could try a more upbeat message (chosen from your approved content library) to get attention. This variable (i.e., message tone) could make the difference between getting a repayment and being left unread. Retain actively tests not just content, but also times, communication channels, call to actions (CTAs), subject lines and many more variables all happening concurrently. Machine learning acts faster than any human being and can incorporate several changes in one iteration. 

Machine Learning Supports a Consumer-Centric Experience

In the debt collection industry, empathy is essential. Customers want to feel understood by businesses and that starts by honoring their preferences. Retain’s machine learning does the work to better understand each individual customer to help get their attention for a path forward. 

Retain’s approach to using machine learning for debt collection focuses on enhancing the experience customers have with your business. When customers feel their preferences are respected, they’re more likely to engage with your message and make a repayment.

See Retain in Action – Schedule Your Demo Today!

If you’re ready to collect more by spending less using machine learning, Retain is here to help. Schedule a demo with our team today and get a hands-on look at how Retain can improve your recovery rates.

From case management and collecting signatures to sending debt collection notices, manual tasks can be a major drain on resources. The good news is that there’s AI software designed to help streamline many of the essential tasks law firms carry out every day. From making it easier to train new employees to collections optimization, we’re going to share five of the best software solutions for law firms. 

1. MyCase – Legal Case Management Software

When you’re in the legal industry, you know that it can be challenging to keep case information and documents organized. Since many law firms take a more traditional approach to day-to-day case management, software companies like MyCase saw an opportunity to help. One area where MyCase can really help law firms save time is with the client intake process. 

The software lets law firms easily set up intake templates that can be customized to specific areas of law. With digital templates, law firms won’t have to worry about time-consuming manual data entry or duplicating efforts in capturing a prospective client’s details. It also helps reduce the time it takes for law firms to onboard new clients, giving attorneys more time back to work on other important tasks. 

2. Retain by TrueML Products – Debt Collection Software

If your law firm sends out debt collection notifications through traditional or digital channels, Retain can reduce your OpEx while improving performance. Retain is white-label debt collection software that uses machine learning to optimize the collections communication process. For example, your law firm can easily send branded and compliant Electronic Validation Notices (EVNs) to customers without adding more employees. 

For example, Retain debt collection software gives your law firm the ability to deliver tailored messages to your customers’ preferred channel for better engagement. By leveraging machine learning, Retain helps law firms who specialize in debt collection the ability to engage more accounts than what’s possible manually. This lets your business strategically focus employees’ time where it matters most. 

Retain is debt collection software that seamlessly integrates with your existing debt collection CRM. You won’t have to overhaul your current system to see results. Retain works alongside them to power digital communications with smarter, data-driven efficiency.

3. Loom – Screen Recording Software 

Loom is screen recording software that can make training more efficient for law firms. Instead of long in-person meetings, lengthy emails or long training documents, Loom gives law firms the ability to create a library of training videos for new employees. Instead of meetings filling up the calendar, new employees can watch the training videos at their own pace whenever they have time. This gives managers more time back in their day by cutting down on the need for one-on-one training sessions. 

This software is also great for providing detailed feedback on new employee work. For example, a supervising attorney can record themself reviewing a contract, motion or other document prepared by new attorneys. Oftentimes a quick video explanation can replace a lengthy email summary or 30-minute meeting. Plus, part of Loom’s AI capability includes removing filler words from recordings so you can record training videos in less takes. 

4. DocuSign & Ironclad – Electronic Signatures

Your law firm is likely already using DocuSign which makes it easier to get the signatures you need digitally. Ironclad is an AI software for contract lifecycle management that easily integrates with DocuSign to offer a comprehensive solution. This partnership gives your law firm access to useful AI tools like contract analysis and risk assessments across the agreement lifecycle. Ironclad will scan documents to help make sure they align with your firm’s standards and policies.  

Many law firms use DocuSign for some documents, but it is much more viable now that the software company has launched remote online notarization in some states. DocuSign wants to limit the challenges of paper-based notarization by digitizing the experience. This extension of the software lets law firms, their clients and customers connect to an encrypted video session to notarize documents. With this feature, paper-based notarization won’t slow your pace of business again. 

5. CoCounsel Legal – Legal Specialized LLM

CoCounsel is a large language model (LLM) that’s based on OpenAI technology. This AI legal assistant is specifically trained for the legal industry. It can help your law firm conduct research, analyze documents and help you create deliverables more efficiently. This tool gives lawyers the ability to spend less time on the research phase so that they get to drafting and high level strategy faster. 

Another key feature of this AI software is that it uses dedicated servers on GPT-4. Which means all the data you go through isn’t used to train the model that is public facing. This helps ensure that you’re honoring confidentiality while still tapping into the power of an LLM. 

*Disclaimer: The solutions highlighted in this post are provided as representative examples of AI applications in the legal sector. TrueML Products does not endorse or recommend any specific vendor and encourages firms to perform their own due diligence before selecting a tool.

Collections Optimization is Easy with Retain 

Is your law firm ready to scale up accounts while scaling down OpEx? Retain debt collection software automates digital communications to more effectively engage consumers and facilitate repayment. 

Our team of experts is ready to help your law firm with collections optimization so that you can collect more at any scale. Schedule your free consultation today! 

With more financial scams aimed at consumers, it’s challenging for collection communications to break through the noise. Scams are also shifting the behavior of consumers and making people more suspicious of unexpected messages. In this blog post, we’re going to break down how financial scams are impacting debt collection strategies and provide some tips that could help your business navigate the situation. 

Financial Scams Are Causing Consumers to Loss Trust and Patience

With scam messages getting more frequent and elaborate, consumers face an unprecedented attack on their financial security. Many people know someone in their life who has fallen victim to a financial scam and might have even experienced one themselves. This has led to two big consumer behavior shifts that make debt collection strategies more challenging: 

• Loss of Trust: The rise in financial scams has made it more likely for a consumer to find a communication they weren’t expecting less trustworthy. Since more scam messages are coming down the pike through more channels, it’s harder to get people to engage with legitimate collections communications. 

• Low Patience: When a scam message comes through, it’s easy to delete or ignore it. It’s a common behavior that all of us do, and financial scams have honed that behavior even more. If your collection communication doesn’t grab attention right away, chances are that the consumer will delete it. 

Financial Scammers Are Hurting the Reputation of Collectors

Unfortunately, many financial scams involve convincing consumers that they owe a debt that isn’t real. This fabrication of a new and pressing debt adds a sense of urgency for consumers. It’s a tactic used by scammers to try and get consumers to make a snap decision to send money – and every one of these scam interactions has the potential to tarnish the reputation of legitimate collector messages. 

What can make this challenge even more difficult is that scammers often pretend to be real companies. Even if your collection communications are branded, they could still face scrutiny from customers. The proof of this trend can be found on search engines across the internet. Some of the most popular searches ask whether a debt collection communication is a scam or not. These searches have broken into the top queries for many legitimate businesses. 

Businesses Need to Add More Assurances for Consumers in Debt Collection

Debt collection strategies need to put more resources into being trustworthy and proving their legitimacy. One of the best ways to accomplish this is by honoring a customer’s communication preferences and digital channel best practices. Scammers aren’t concerned with sending a message through someone’s preferred channel, at the right time, with content that has empathy and includes a clear opt-out option. 

Another good way to add assurance for consumers is to lay the groundwork for expecting digital communications and provide clear answers to questions. Preemptively informing customers that your business uses email or SMS for communications is a good way to do this. Other best practices include directing customers to an FAQ or providing detailed information on why they’re receiving this notification. It’s also helpful to avoid aggressive tactics and language that stresses immediate action, that way your collection communications are less likely to be confused for a scam. 

Threats and Intimidation in Financial Scams

A key reason why financial scams are negatively impacting digital debt collection strategies is how many financial scams use illegal threats. To add more pressure to pay off a fabricated debt, scammers often tell consumers they’ll lose even more money, face legal consequences or even face jail time. Even though they don’t have the legal authority to follow through, these kinds of intimidation tactics are cruel and often do the most reputational damage against legitimate collection communications. 

Going through or even hearing about an experience like that is sometimes enough for a consumer to ignore any type of repayment message. This can create a negative feedback loop where legitimate collection communications get looped in with scams in the minds of consumers. 

What does this mean for your debt collection strategy? It means incorporating more “human” language, building trust and giving customers the opportunity to engage with the message on their own terms. It’s also important to provide clear connections to other content (like links to your website) that add confidence in the message being authentic. 

Improve Your Recovery Rate with Digital Collection Software

Retain by TrueML Products is a white-label digital collection software that’s powered by machine learning technology. It streamlines digital communications at scale for your business and offers a personalized experience for your customers. Retain leverages data from millions of consumer interactions to send personalized communications through the right channel, at the right time and place for every customer, and with best practices that keep them from looking scammy. 

If you’re ready to limit the impact of financial scams on your debt collection strategy, Retain is here to help. Schedule a free consultation with our team to learn more about how your business can collect more from happier customers.  

Just like the current situation with student loans, the rules, policies and trends on medical debt are often in flux. Stark changes to the system often happen when a new administration enters the White House, leaving consumers and businesses to navigate the fiscal impacts. 

In July of 2025, there was a major change that made it possible for medical debt to show up on credit reports once again. Join us as we go over the current state of medical debt and the impact it could have on your customers and collection strategy. 

Insights on the Changes to Medical Debt Rules

Back in April of 2023, TransUnion, Experian and Equifax made the decision to stop medical debts of less than $500 from showing up on their credit reports. This kicked off efforts by the prior administration, which the Consumer Financial Protection Bureau (CFBP) in January of 2025 finalized in a rule that prevented any medical debt from showing up on credit reports. This move also stopped lenders from using consumer medical data in their decision to determine creditworthiness and approve new lines of credit. 

It looked like medical debt was no longer going to be a roadblock for consumers participating in the financial system. However, that changed in July when a federal judge in Texas overturned the new medical debt rule set by the CFPB (in Cornerstone Credit Union League v. Consumer Financial Protection Bureau). The judge felt that the CFPB had overstepped their jurisdiction, and there currently aren’t many indications that this ruling will be overturned. 

So, where do the medical debt rules stand? Medical debts under $500 still won’t be included in credit reports, and bills over that amount take one year to appear. While this gives consumers some time, many experts expect medical debt to grow. This ruling has left many consumers across the country worrying about how their credit score will be impacted. 

Why Medical Debt in 2025 is Expected to Grow

Many healthcare and financial experts expect medical debt in the U.S. to grow even more as 2025 continues. One of the main reasons is that recent cuts to Medicaid will leave more consumers without a reliable source of medical insurance. Reports estimate that roughly 2.2 million families are more likely to have medical debt due to losing Medicaid coverage. 

Another key factor is that the Affordable Care Act premium tax credits are expiring. This will increase the costs of private insurance coverage, and potentially lead to more people becoming uninsured. These factors together raise the risk of more families enrolling in high deductible insurance plans with lower monthly premiums, which could lead to more consumer debt when an emergency strikes. In fact, a recent Federal Reserve report found that 37% of adults can’t afford a $400 medical emergency. That’s almost $1,000 less than the average insurance deductible. 

The potential rise in medical debt in 2025 will make it more difficult for many consumers to manage their finances. Other economic factors like groceries being more expensive, shifts in inflation and student loan repayments picking back up, only add to the pressure. As a result, many collection strategies will need to adapt, or they could see a drop in repayment performance. 

What These Medical Debt Trends Mean for Your Customers and Collection Strategy

The common thread with the current state of medical debt is that more Americans are poised to be dealing with heavier financial burdens. Since the average medical debt for American families is slightly over $1,000, there could be more opportunities for smaller amounts. With larger medical debts weighing heavy on credit scores, people will be more incentivized to take care of smaller debts to improve their credit. 

Even when people are motivated to take care of their debt, it’s often still a challenge for companies to reach them effectively. The current state of medical debt is likely going to add to these difficulties. The vast majority of medical collections communicate through phone calls and physical mail. That means other creditors and collectors are going to have a tougher time breaking through all the noise in those channels. 

Experts in collection services agree that medical debt has emphasized the importance of digital communications. With phone calls and physical mail becoming an even more crowded medium, combined with more consumers preferring not to be contacted that way, companies need to adapt. Outbound calling is only becoming more difficult, which is why a digital-first omnichannel approach is one of the best ways to improve collection performance. 

To help address these trends, many businesses are turning to self-serve portals once someone engages with a digital communication. Self-serve portals empower customers by giving them more control over the repayment process and provide a low-friction way to make a payment. 

Ready to Collect Faster from Happier People?

Medical debt is going to have an impact on consumer finances for the foreseeable future, and as a result, debt collection will need to adapt. As the likelihood of your business communicating with people in medical debt increases, your collections strategy should honor their unique preferences. 

Retain by TrueML Products can automate digital communications using machine learning for better repayment results. By creating a user-friendly digital experience, your business can keep operating costs low while honoring your customer’s communication preferences. If you want to optimize the engagement of your debt collection communications, schedule your consultation with our team today. 

Roughly 7.7 million people in the U.S. were enrolled in the previous administration’s SAVE plan, which is coming to an end. Many experts believe that this change will add to the financial burden facing millions of Americans. 

This change increases the likelihood of your customers balancing multiple debts, and could have real effects on debt repayment communication strategies. Join us as we break down this landmark change, and how your business can build trust with borrowers. 

Important Changes on Student Debt That Impact Debt Recovery Services

The One Big Beautiful Bill Act is changing a lot for current and new student loan borrowers. It will likely take time to cause big impacts, but it’s important for businesses to start thinking about how to change their approach to debt repayments now. There are several key factors your business needs to know: 

• Interest for student loans on the SAVE plan will resume on August 1, 2025. This means that monthly payments for student loan debt are going to increase, and could push more student loan or other accounts into delinquency in the short term as borrowers try to manage budgets. 

• The new Bill is creating the Repayment Assistance Plan (RAP), which is an income-based plan calculated for each borrower. Compared to the old plans, RAP does waive interest and requires a longer period of time (30 years) of qualifying payments before being eligible for cancellation. 

• Under RAP, borrowers will not be able to defer loan payments in the event of economic hardship like unemployment starting on July 1, 2026. Some experts fear this could cause a domino effect for people with multiple debts, with delinquent student loans sparking delinquency for other accounts. 

How to Talk to Customers with Student Loan Debt

With student loans being one of the most common types of debt in the country, it’s likely that some of your customers hold this kind of financial obligation and may be struggling with repayment. In fact, according to an analysis done by TransUnion in April, 5.8 million people were at least 90 days behind on their student loan payments. And the new rules could raise this number even higher. It’s one of the main reasons why debt collection strategies could get more aggressive as more student loan changes take effect. 

For companies collecting on student loan debt, phone calls and physical mail are still the primary communication channels. As the new rules take effect, borrowers will likely receive an avalanche of notifications on the new procedures to follow and reminders to make payments. That means more competition for your customer’s attention through these channels. 

With your customers potentially being contacted by multiple businesses and/or creditors, communications that capture their attention and honor their preferences are more likely to earn engagement. 

Consider Using a Digital Communication Strategy for Debt Repayments

If your business is trying to improve the performance repayment communications, consider using an omnichannel approach that incorporates consumer-preferred digital channels. And to implement digital communications at scale, there are software-as-as-service (SaaS) tools that automate outreach. 

Digital communications are where most consumers prefer to be contacted about financial matters. Email continues to be the most preferred platform with people in younger generations like Gen Z and Millennial (also more likely to have student loans), prefer to get text messages for financial matters. Your business can also avoid the challenges of setting up your own digital communication delivery system by using tools like Retain by TrueML Products. 

Retain is a white-label SaaS tool that lets your business automate digital communications to customers. It’s powered by a patented machine learning algorithm that leverages data from millions of customer interactions to determine the best time, message and channel for each unique customer. 

Empathy Will Be in High Demand from Consumers

Student loan borrowers are going through a whiplash. Many of them were counting on loan forgiveness or certain payment plans, and now the rules are changing. Dealing with sensitive financial issues can be stressful, and the risk of added financial burden is adding fuel to the fire of consumers wanting more empathy from businesses they interact with. A recent Salesforce consumer study revealed that 68% of consumers expect brands to show empathy. 

When someone needs to make payments to multiple businesses, the ones that extend empathy are going to stand out. The root of empathy in this case is showing your customers that you understand their challenges. Roughly 66% of consumers expect companies to know their unique needs. This creates an opportunity for your business, since it’s common for debt repayment communications to take a one-size-fits-all approach. 

A great way to extend empathy to your customers is through the tone of content that’s used in your digital communications. Simple additions like adding more understanding language or even an animated gif to encourage a smile goes a long way. Another good strategy is to offer customers more options and flexibility for repayments. This shows that you’re taking their financial needs into account. 

Empathy is the path to building trust with student loan borrowers, and more trust increases the chance of them making debt payments. 

Talking to Customers with Student Loan Debt is Easier with Retain

Odds are, some of your customers are dealing with changes to student loans. And as the landscape surrounding student loan debt changes, Retain’s AI can learn from customer interactions to optimize for better engagement. 

If your business wants to stay ahead of all the variables that affect debt repayment, Retain’s automated digital communication platform is the answer. Contact our team to schedule a consultation today. 

Since many facets of the legal industry still happen mostly on paper, figuring out how to implement cutting edge technology is often a challenge. If your business is trying to figure out how to improve debt recovery rates, the answer can be found in AI, specifically machine learning. Join the experts at Retain as we explore how AI can boost the debt recovery performance for your law firm. 

AI Gives FTEs More Time to Invest in Business Goals

For many law firms in the U.S., the debt recovery process has full time employees (FTEs) moving things forward manually. FTEs pour over spreadsheets and print out compliant notices to send through the mail. Or maybe they are using an automation platform to send emails in an effort to digitize part of the process. 

Both of these tactics have some substantial drawbacks. The process of sending notices through the mail is tedious, and the cost of postage continues to go up. With email, law firms need to be careful to not damage their domain reputation when using an email automation platform. Without an optimized strategy, your emails could end up going to spam folders more often. One of the main benefits of AI software is that it intelligently automates the time consuming tasks in debt recovery. 

Instead of your FTEs spending hours chasing customers and trying to connect with them, an AI digital engagement platform can find the right channel, time and message each consumer is most likely to respond to. This frees up FTEs to focus their efforts on more important tasks, saving your business time and money. 

Break Free from A One-Size-Fits All Approach 

As a law firm collecting debts, you know that every consumer is different. Your approach to working with them changes based on the nuances of their case, personality and a variety of other factors. Shouldn’t your debt recovery communications follow the same logic? For many law firms, the personalized approach with consumers doesn’t translate over to debt recovery. It’s common for the business to have three to seven notifications that are sent through the same channel. 

AI fixes this issue. It offers law firms access to recovery communication content that is personalized to a consumer’s preferences. A white-label digital delivery software-as-a-service tool (SaaS) like Retain uses analytics and data from the legal industry to create communications that lead to higher debt recovery performance. Think of this application of AI as a specialized software tool that delivers content so it’s more likely to be seen by consumers. 

Debt recovery customization isn’t just about content, the channel your message goes through is just as important. In fact, contacting a consumer through their preferred channel first can increase the likelihood of them making a payment by 10%. If your law firm is only reaching out to consumers through one channel, you could be missing out on substantial revenue. 

AI Helps Law Firms Streamline Debt Recovery Compliance

When a law firm is sending out debt recovery notices, there’s no shortage of regulations and compliance rules to follow. If it’s being done manually by FTE’s, keeping track of federal and state requirements is often a challenge. One mistake or flash of human error has the potential to cost the business thousands of dollars. AI software-as-a-service (SaaS) platforms for debt recovery solutions take the hassle out of compliance. 

There are AI SaaS tools like Retain that leverage code-based compliance. That means the regulatory rules your law firm has to follow for debt recovery are embedded into your program. The AI puts up compliance guardrails that eliminate the risk of human error and can easily be updated to stay up to date with regulatory changes. Consumer laws and regulations your law firm has to comply with can be accounted for all while creating a consumer-friendly experience for your delinquent accounts.

AI Amplifies Your Debt Recovery Efforts to Engage with More Accounts

As we mentioned before, there’s only so many hours FTEs have to connect with delinquent accounts. An AI white-label SaaS tool supercharges your law firm’s efforts by continuously learning and working in the background. It’s like having a team of dedicated FTEs focused on optimizing your debt recovery strategy and communications. As your law firm scales and has more delinquent accounts, AI helps ensure that debt recovery can scale without needing additional resources. 

With some AI software, it’s important to know that by engaging more accounts, your debt recovery efforts will improve over time. The AI will learn the nuances of your consumer base and identify the right channel, message and time they’re most likely to engage with. The end result of your law firm leveraging AI in this capacity is spending less to collect more. 

Wondering How to Improve Debt Recovery Rates? Retain Can Help

The process of adopting AI to help with core aspects of your law firm’s business can feel overwhelming, but Retain makes it easy. If you’re ready to start engaging consumers more effectively and efficiently, schedule a consultation today. Together, we can automate your digital communications and lower the cost of your debt recovery efforts. 

There’s no question that AI is changing the horizon of what’s possible with debt recovery solutions. However, it’s not the only factor driving shifts in the industry. All of these factors have many people wondering what the future holds. Join us as we talk about the future of debt collection and what it could mean for your business.

Current Trends in Debt Collection You Need to Know

Before we dive into what the future of debt collection could hold, it’s important to look at the present. Here are some of the top industry trends that will likely have a lasting impact on the industry. 

Shifts in Regulatory Scrutiny

The Consumer Financial Protection Bureau (CFPB), has recently faced cuts to their staff as a result of restructuring happening with the current administration. Even though many of the CFPB’s regulations are currently in effect (including Regulation F), other arms of the agency like enforcement and supervision activities have declined. This has created a level of regulatory uncertainty that the fintech and banking industries continue to face. Some experts predict that individual states will step in to fill the void by implementing more of their own regulations.

Tech Adoption Continues to Rise

Despite some hesitancy at its inception, more companies in the U.S. are trying to leverage AI. Low level entry points like website chat bots, content creation tools and writing assistants are becoming the rule instead of the exception. With more companies adopting AI to support their business, more consumers expect the brands they interact with to use this technology to enhance their experience.

The Current State of Consumer Debt in the U.S.

Consumer debt in the U.S. is expected to rise in the future. Two main drivers of this trend include student loan debt forgiveness coming to an end and the recent Medicare cuts (if current changes hold) will likely add to the financial burden families face.

Where is the Future of Debt Recovery Solutions Going?

With the current trends as guideposts, let’s dive into our prediction on future trends that could directly affect digital debt collection strategies. 

Consumers Will Want More Choice and More Empathy from Companies

There’s a recurring trend in the debt collection industry that’s expected to continue, consumers want more payment options. Over the last few years we’ve seen consumers express interest in the ability to pay their balance with Apple Pay, Venmo and more. We’re currently seeing more consumers who want the option to pay businesses with cryptocurrency such as Bitcoin. It would not be surprising to see debt collection performance in the future be directly linked to the number of payment methods being offered. 

Another big consumer trend that will likely carry itself into the future is the desire for companies to show more empathy. Right now this is sometimes referred to as “the empathy advantage”. Brands that show understanding and compassion are more likely to get consumers to take that desired action. For the future debt collection industry, the difference between a customer making a payment or ignoring a communication could come down to the empathy extended to them. Machine learning recovery solutions are primed for these kinds of challenges, offering customer-friendly treatments and options that create better customer experiences.

AI Will Become More Advanced and Shape Digital Debt Collection with Machine Learning Recovery Solutions

While there will be a need for human guidance, AI will continue to evolve and grow in many regards, including more advanced machine learning recovery solutions. In the next few years, some experts think that this form of AI technology will gain the ability to scan consumer patterns across the country. 

It could leverage data like consumer spending habits, geography, local economies and other risk factors to alert a consumer that they’re on the path to being in debt. This potential future service is being referred to as “debt vulnerability detection”, and could spark an entire new application of machine learning recovery solutions. 

AI voice recognition technology is very likely to continue to evolve and be used for more debt recovery solutions in the future. As it advances, some experts believe that personalized content will be developed in real time to solve the current issue at hand. For this prediction to become a reality, consumer trust in AI (specifically AI customer service agents) needs to improve. Current generation chat bots do something similar with text data, but human behavior analysis is one of the emerging frontiers of AI.

More Niche Debt Recovery Markets Will Likely Emerge

AI technology is providing a stark advantage for businesses like law firms or credit unions who want to increase debt recovery performance. This combined with the likelihood of debt portfolios becoming more complex could fuel the rise of more niche debt recovery markets. Why does this matter? 

Right now, machine learning recovery solutions and other AI tools collect data on consumers they interact with and use it to better understand the nuances of the market. An example of this could be that an AI might learn that consumers with credit union loans are more likely to make a payment if the first notification is an email. The more data an AI gets access to over time, the better it will become at debt recovery. Due to this, the future of debt collection could see companies that focus on niche markets that their AI tools have accumulated the most data in.

Ready to Spend Less to Recover More with Retain?

While no one can say for sure what the future of debt recovery will look like, your business can improve recovery performance today. Retain is a white-label digital delivery software-as-a-service (SaaS) tool that is designed to keep your debt collection costs low. The software uses machine learning to study consumer behavior and determines the best channel, time and place to send digital communications to your customers. 

If you want to learn how to increase engagement with your communications and increase profitability, schedule a consultation with the Retain team. 

This means that sending your Model Validation Notices (MVNs) for debt collection is about to become even more expensive. What are the long term implications of this price increase? And is there a way for your business to lower the cost to collect debt? Join the Retain team as we discuss the answers to both those key questions.

What Are the Main Drivers for the Forever Stamp Price Increase?

The USPS is in the midst of their “Delivering for America” plan. The goal is for USPS to be financially self-sufficient. To reach that goal, they’re regularly increasing prices on high performing products, and the Forever Stamp is at the top of that list. It’s important to know that this strategy is working. In fact, the USPS is expected to increase the price of stamps at least twice a year through 2027. 

This direct impact to the bottom line isn’t the only USPS-related challenge your service operations are facing. In October of 2024, the USPS scaled back its delivery targets of first class mail. Originally, the goal was to deliver 93 percent of first class two-day mail and 90 percent of three-to-five-day mail on time. That’s been walked back to 87 percent and 80 percent respectively. 

When you have to send an MVN for each account and are likely getting more placements each month, there’s a significant cost-increase about to hit your bottom line on July 13th. Plus, there’s the added cost of a larger percentage of those notices being delivered later than planned.

How Do You Maintain Your Cost-to-Collect Ratio with Each MVN Potentially Becoming More Expensive?

The recent Forever Stamp price increase and USPS delivery targets are a challenge for your MVN strategy. In the face of debt collection costs going up and impacting profits, many businesses look to the following tactics: 

• Absorb the Cost in the Short Term: In the wake of the stamp cost increase, some businesses look to simply take the hit until their forecasts can be adjusted. The potential issue with this tactic is that it’s difficult to accurately forecast when future stamp prices are uncertain. It’s difficult for many businesses like law firms or debt buyers to add more flexibility in their direct mail budget. 

• Try to Pass On Costs or Charge Off More Debt: Another potential tactic is increasing the price of your own services to off-set the Forever Stamp increase. The issue here is that finding the right increase that aligns with your customer’s needs takes time. And charging off more debt could upset the balance of your business’s financial health. 

• Reduce Mailing Volume: Some businesses might opt to reduce mailing efforts and only focus on sending MVNs to collect from accounts that are most likely to engage with their company. However, it can be difficult to identify the higher value and more likely to pay accounts, and you still have to decide what to do with the rest. 

The good news is that there’s another option for businesses looking to navigate these market challenges. Digital debt collection and electronically sending your MVNs via email is a great way to protect the profitability of your business.

Why Your Business Should Consider Digital Debt Collection Strategies

One way to limit the impact of Forever Stamps price increases is to send some or all of your MVNs electronically. Why should your business consider digital debt collection strategies? For starters, today’s consumers prefer to conduct their financial business digitally. With the right Electronic Validation Notice (EVN) strategy, you’ll know who opened, clicked and showed interest to resolve their debt. This data not only provides an audit trail necessary for compliance but also gives your business insight into the types of messages that resonate with your customers.

Regardless of how savvy your business is with digital communications, the right partner can help your emails reach 87% of inboxes. By using email for a percentage or all of your account placements, you’ll protect the profitability of your business, unlock more first time payers and uncover which customers prefer digital communications.

Why haven’t more businesses used this method to lower the cost to collect debt? Many businesses haven’t made the switch to using email and digital strategies for two reasons. First, setting up your own email distribution system at scale for EVNs is often costly and time consuming. Additionally, it’s common for businesses to realize they lack the expertise to ensure the digital communications are being sent compliantly. However, there are partners who can make the process easy.
Retain by TrueML Products Helps You Recover More While Spending Less

Retain by TrueML Products is a white label SaaS that allows you to deliver compliant EVNs to past due customers. It’s a ready-to-use solution for law firms and businesses looking to streamline their servicing operations while protecting profit margins from outside factors. By going digital with a partner who understands compliance, you can replace stamps with email sends that lead to faster and cost-effective account resolutions. Request a consultation to learn more about how Retain can get your content seen and engaged with by customers.

The challenge for businesses engaging with consumers digitally in debt collection has become not if they should, but how they can do so at an effective and compliant scale. Artificial intelligence (AI) offers a solution to enable customized, digital communications at scale, and to do so compliantly. Let’s take a look at digital debt collection compliance, the benefits AI can bring to stay compliant, and the risks of missing the mark with requirements.

How Digital Debt Collection Compliance Impacts Your Business

Understanding the regulations that apply to your business is the first step, and the landscape is complex and can change quickly. While using a SaaS tool to enhance your in-house customer engagement for first-party debt collection does not mean you’re beholden to the same regulations guiding third-party debt collectors. By following these guidelines will help you stay ahead of  existing compliance issues and help safeguard your business against developments in future digital debt collection compliance policies.

The Fair Debt Collection Practices Act (FDCPA) and its Regulation F dictate rules for debt collection activities, along with various state and local laws, including rules for validation notices, time and frequency of communications, required message content, required disclosures, clear and conspicuous unsubscribe, monitoring deliverability, and collector identification details.

And while there hasn’t been any federal laws regarding the use of AI in debt collection yet, federal agencies have put out significant guidance on using these advanced technologies and what sort of protections businesses need to have in place over them. As digital debt collection compliance continues to gain traction, it’s likely that new rules will be enacted in the coming years. One leading driver of this can be seen with The Department of Treasury. They are is very interested in how organizations are using AI and have undertaken various initiatives to provide information to the public on AI security and best practices in the financial sector including bringing in industry members and government regulators to talk about the risks and the benefits and what sort of controls would be best to put in place.

Let’s look at the benefits AI brings to keeping up with compliance in digital communications, and the inherent risks of non-compliance and not properly vetting digital solutions or service providers utilizing AI.

Benefits AI brings to keeping up with digital debt collection compliance:

• Digital customer engagement solutions infused with AI can offer code-based compliance, but what is code-based compliance? Code-based compliance refers to the programmed rules and controls that ensure communications fall within all of the identified federal and state laws and regulations that a business needs to adhere to. When an algorithm is used to help make decisions on delinquent customer communications, compliance controls could be coded into that algorithm or work side-by-side with the algorithm to ensure that all digital communications fall within federal and state laws and regulations.
• This code-based approach powered by AI helps with several collection-related regulations that creditors, law firms, and debt buyers benefit from following (for both compliance and customer satisfaction):
  • Communication frequency restrictions: Regulation F’s “inconvenient time” rule restricts debt collectors from contacting a customer before 8:00am and after 9:00pm local time at the customer’s location. Digital automation dictated by compliance-driven AI and machine learning can help avoid violations and perceived harassment by preventing communications from being sent outside the approved times.
  • Consent & disclosure requirements: a code-driven method means that digital communications sent to individual customers contain all the necessary disclosures appended, such as out-of-statute disclosures, state disclosures, etc.
  • Digital paper trail for audits: digital communication using advanced technology can automatically capture and create a traceable digital footprint to enhance transparency and compliance with regulatory standards.
• Utilizing AI can enhance existing processes. Compliance controls in an AI-powered system can ensure compliance with these regulations, minimizing the risk of human error while code-based guardrails mentioned above can be easily updated to reflect the latest rules and best practices.

Risks of Using AI in Digital Debt Collection Communications:

• Non-compliance with regulations opens your business to risk—even if the violations come as the result of using a SaaS solution not up to date with the rules and laws your organization must adhere to. Consequences of non-compliance are very vast: fines and penalties, increased consumer complaints and lawsuits, erosion of consumer trust, and more.
• Precaution: Always perform rigorous due diligence when considering any software or service provider that offers AI-based solutions. This means including not only your procurement team, but compliance and any technical and information security teams available to vet the solution based on your business’s risk appetite.
• Did you know that tech fads can quickly turn into tech debt. Even if advanced technology is implemented and adopted it can be hard for in-house teams to keep up with fast-evolving compliance requirements. As mentioned above, there is no comprehensive federal law or regulations regarding AI yet, but the Department of Justice (DOJ) recently revised their Evaluation of Corporate Compliance Programs​ guidance and placed significant emphasis on the need for companies to implement structured processes to assess and manage risks tied to AI and other emerging technologies.
• Precaution: These updates to the DOJ’s guidance underscore the need for organizations subject to compliance requirements to have a competency level when it comes to artificial intelligence and all of the various tools and solutions that may be used or inadvertently used through vendors.
  • Which leads to the risks of skipping the vetting process and due diligence of digital solutions and partners, especially for debt collection. Code-based compliance isn’t “code it and forget it.”
• Precaution: Organizations should check that providers of debt collection SaaS solutions design their processes so that they promptly and effectively adapt to new regulations and are proactive with cybersecurity and data privacy.

It’s important to keep in mind that most digital debt collection compliance rules were written for the benefit of consumers. The better we comply, the safer—and often happier—customers are. As the saying goes, “it is a poor workman that blames his tools”—don’t risk compliance violations, customer complaints, or worse simply because your business did not properly vet an AI-driven solution.

Does Your Business Need Help with Digital Debt Collection Compliance?

If your business needs help ensuring that electronic notifications being sent to customers are following digital debt collection compliance best practices, Retain can help. Retain’s debt collection software has built-in digital communication compliance features. 

It’s tailored to your business’ unique needs by easily restricting your messages by state with safeguards for sending emails and texts that meet compliance standards. Connect with our team to learn more about Retain’s digital compliance controls for debt collection.