Chris Swansiger

Regulation Guidelines for Your Financial Services Contact Center

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The financial industry is unique for many reasons. Among the primary differentiators is the substantial amount of regulations that have been put in place to protect consumers seeking financial services. One of the fundamental responsibilities of any financial services provider is to avoid potentially risky activities and to ensure that there is regulatory compliance at every level, including the customer-facing contact center.

In fact, many regulation breeches happen at the contact center level by agents who are unaware of guidelines or who are not properly trained. This is why it’s important to ensure every agent who speaks with consumers has the knowledge necessary to avoid putting an organization at risk.

General Data Protection Regulation (GDPR)

The most talked about regulation just recently put into place in May 2018 is the General Data Protection Regulation. Also known as GDPR, this European law is a game changer for financial services contact centers. Not only will financial services companies have stricter rules regarding customer consent and the ability to erase personal data, but the companies will also have to resolve breaches within 72 hours or pay hefty fines (up to four percent of the company’s global revenue / up to €20 million, depending on the type of non-compliance).

Keep in mind that this law affects any company who uses and stores EU citizens’ personal data regardless of where the company resides. This personal data includes customers’ names, email addresses, locations, IP addresses and additional customer behavior, as indicated on the GDPR site.

With GDPR already enacted, financial contact centers need to regularly check on how their customer data is being used and take proactive measures to prevent being left scrambling to address a data breach.

Consumer Financial Protection Bureau (CFPB) Regulations

The CFPB is focused on implementing and enforcing many federal consumer financial laws to give every consumer access to markets for fair, transparent, and competitive financial products. This governmental organization not only helps financial services providers comply with consumer financial protection law, they also help consumers who want to complain about a financial services organization.

Within the contact center, service agents must be aware of specific regulations that need to be followed. These include:

  • Equal Credit Opportunity Act
  • Fair Debt Collection Practices Act
  • Privacy of Consumer Financial Information Act
  • Fair Credit Reporting Act
  • Truth in Lending Act
  • Truth in Savings Act

It only takes one service agent to make a questionable comment to a potential customer to put a company at risk of enforcement action in federal court or through an administrative adjudication proceeding. One of the fundamental roles of the CFPB is to stand up for consumers to ensure they are treated fairly in the financial marketplace. This is why the organization welcomes whistleblower tips and orders violators to remedy harm to consumers by compensating victims financially. In other words, it’s wise for every financial services provider to become highly familiar with the many aspects of federal consumer financial laws.

Financial Crimes Enforcement Network (FinCEN) Regulations

As part of the United States Department of the Treasury, FinCEN was put in place to stop illicit use of the financial system and to prevent money laundering. All financial services providers must file specific forms to report potential money laundering or terrorist activities. This includes depository institutions, money services businesses and mortgage brokers. At the contact center level, processes must be put in place to collect data to enable the flagging of suspicious activities.

Other Regulations

There are plenty of other governmental regulations that impact financial service providers’ contact centers. Yet, these aren’t the only regulations that need to be followed. There are also state and federal regulations that all industry contact centers must follow.

Telephone Consumer Protection Act (TCPA)

Financial services providers that have outbound contact centers have to abide by specific guidelines established by the Telephone Consumer Protection Act.  For example, TCPA guidelines restrict contact centers from calling residential numbers before 8 a.m. or after 9 p.m. As well, callers must clearly disclose information to recipients, including the name of the business and phone number. Those who are on the do-not-call registry cannot be called.

Fair Debt Collection Practices Act

For financial services providers that collect debts, there are even more specific guidelines that must be followed. Enacted in 1977, the Fair Debt Collection Practices Act was designed to stop aggressive and unethical third-party debt collection agencies, as well as those that hire them. The set of laws in the act are designed to protect consumers from abusive practices, such as harassment, including excessive phone calls, abusive language, misrepresentation or threats of violence, harm, or arrest. As well, the laws allow consumers to access proof that they owe the money that a debt collector wants. Many customers of financial services providers have complained about practices that violate this act which has led to a number of highly publicized class action lawsuits.

Contractual Regulations

Every customer of a financial services provider represents an individual contact. Along with state and federal regulations, the contact center must abide by any set contract requirements or service level agreements. Often, these contracts stipulate that calls must be answered within a certain time frame or that they are answered live instead of going through an IVR system. To continuously meet specific guidelines, it’s important to closely monitor agent resources as well as system infrastructure, which can dramatically impact the flow and quality of interactions.

Department of Labor Regulations

Besides meeting guidelines that protect consumers, financial services providers must also comply with Department of Labor regulations. The majority of contact center employees work for an hourly wage. The Fair Labor Standards Act, enacted by the Department of Labor, includes several specific provisions impacting hourly workers. This includes the employer paying at least the national minimum wage, unless there is a higher state minimum wage. Hourly workers, who work more than 40 hours per week, must also receive pay equal to one and one-half time their regular hourly wage.

Regulation guidelines go hand-in-hand with financial services providers. Not only do they protect consumers, they can also provide those who serve them. By making sure your financial services contact center stays on top of the latest updates to these guidelines and ensuring compliancy, it’s possible to avoid costly and time-consuming consumer litigation and brand damage.