The Permissibility of Fees in ARM: Information You Don’t Want to Miss

Last week, we sponsored an industry webinar on The Permissibility of Fees in ARM, and it garnered remarkable turnout – from agencies to our fellow payment providers looking to sort through the sometimes-muddled world of convenience fees in ARM. 

Thanks to some industry leading legal and compliance experts, we were able to engage in a cohesive discussion on the permissibility of fees in our industry, including tangible steps to take in your payment processing strategy.  Here are few highlights from the discussion, and a link to the full recording – a must-watch for agency and operations leaders.

#1: Define Your Strategy

Partnering with your clients in all aspects of your strategy, including payment processing, is the first step in determining whether a No Cost to Biller model is a viable solution to supporting your overall profitability.  You can educate your clients when you are able to influence their agreements with consumers, and work with their compliance leaders to align on risk tolerance as it relates to the use of fees.  

Also, you’ll want to consider when and where different payment options make the most sense for your specific business types.  Even implementing a fee model in a small portion of your collections can make a significant impact on profitability. 

#2: Remain Faithful to the Rules

Fees are not untouched by the FDCPA, CFPB and State Laws; however, much of the language used is based on collection agencies charging fees internally.  What if the collector is not collecting a fee?  It’s regulated quite differently, if at all, and while some states have clear regulatory considerations, you can still successfully navigate risk for a comprehensive payment strategy. 

Additionally, you’ll want to ensure proper disclosures are in place and alternative payment options are clear to the consumer.  These are areas both your vendor and legal counsel can help to navigate. 

#3: Know Your Core Competency

What’s your core competency?  Many agencies consider their tech stack, client relationships, or niche service areas to be at the core of their success; and its likely payment processing isn’t on the list.  That’s why having strong legal counsel and a payment processing partner with depth of understanding as to successfully deploying a No Cost to Biller model is critical.  Find partners where this IS their core competency and they are constantly monitoring and enhancing solutions based on industry opportunity, client requirements and the regulatory environment. 

The bottom line is that transformative payment processing solutions are now within reach - and adoption is steadily increasing.  If you aren’t considering adjustments to your payment processing strategy, now is the time. 

Special thanks to John Bedard of the Bedard Law Group, Mike Frost of Malone Frost Martin, and David Whitely of Xcelsior Payments for speaking on this panel.

We hope you’ll listen in to the Webinar Recording and let us know what you think.

Michael McDonnell