5 Things Creditors’ Rights Law Firms Should Do to Foolproof Their Compliance Framework
- December 1, 2022
- Category: Compliance Management
If you are a creditors’ rights law firm, foolproofing your existing compliance framework may come down to shaking up your day-to-day activities completely or fixing just one compliance control, depending on the latest rules and regulations. Whatever the case may be, compliance should be your number one priority to stay attuned to the CFPB rules, state regulatory laws, and the scope mentioned in your SLA with the creditor – something you can achieve by following the below-mentioned tips.
1 – Maintain an effective document management policy
The core of any compliance program is a proper set of documentation of the policies and procedures. Documentation not only helps a company in the event of legal or regulatory risk but also acts as training material thus greatly helping with audits. Hence, a well-defined process for document management is as important for your business as the documentation itself. Any law firm probably has strong internal policies for bankruptcy scrubs, but if these policies are not laid out in black and white to employees, non-compliance uncovered during a bankruptcy audit may place liability on the entire firm, even if it was due to employee error.
Document management and compliance activity tracking can be time-consuming and complex processes with significant implications. Consider leveraging technology to help enforce your standards and automate manual tracking that can help save more than 35% of the time currently spent.
2 – Conduct risk assessments, quality assurance programs, and audits regularly
Identifying the risks involved in your internal processes as well as vendor relationships through a robust risk assessment exercise can help you identify the potential areas of compliance frauds. Rather than waiting for external audits to uncover problematic issues, proactively establish a system for inspecting and testing policies and crucial compliance controls. Hiring an external auditor to do a bi-annual review can immensely help you clean the house and create an objective baseline, other than making client audits less stressful. A comprehensive compliance program includes audits like letter audits, call monitoring, licensing and insurance checks, vendor audits and oversight, etc. Many vendors also have access to your data or facility, though their access to NPI may differ depending on their security rating. Auditing your vendors and their suitability to access certain types of information is as important as auditing your internal processes. Due diligence covering their licensing, data security, and practices need to be done.
3 – Trickle-down security awareness and privacy concerns
When your company is dealing with Non-Public Information (NPI) or financial data, it becomes very important to keep this data safe. Data theft or data loss is quite rampant in the post-COVID economy through socially engineered cyberattacks or ransomware. Hence, leave no room for any IT security issues and have a strong system in place to ensure that your client’s data is safe with the implementation of multi-factor authentication, anti-phishing training, VPN, etc. This will help you stay aligned with the FTC Safeguards Rule that requires financial institutions (under federal trade commission jurisdiction) to have measures in place to keep customer information secure.
4 -Create effective corrective action plans and training
Small and medium-sized law firms struggle to allocate resources to compliance audit and remediation of non-conformities because these are cost centers. The hope is that the small sample size of data during audits will work in your favor. But this rather leaves your law firm open to serious litigatory risk, should matters come to light. A better solution is to work with an external firm that can not only perform the audit but also suggest remediation techniques.
5 -Have a top-notch complaint resolution program
If complaints are not resolved quickly, consumers typically turn to regulatory bodies. A regulatory complaint can not only affect your company’s reputation but can also invite a lawsuit, sometimes costing you more than the actual face value of the account.
With the new requirement to record all complaints, including those resolved within 3 days at the frontline, choose a complaint resolution platform that can be integrated into your current CMS (without disrupting your current workflows) to ensure accurate recording of all the details and top-notch response to all complaints.
Message from Provana: Are you a small or mid-size creditors’ rights law firm yearning to scale and increase your account volume? Our Compliance Management System, IPACS, can arm you with the right technology and people to compete with the industry leaders. With pre-loaded policies, audit scorecards, and training content, IPACS can help you kick-start the process of building a solid compliance framework. If you would like to know where your compliance framework stands, click on this link to fill out a simple form.