We ask clients this question all of the time. In our view, there is a big difference between understanding the risks involved and intentionally making a business decision to accept the risk as compared to having no idea that risk is being taken.
Unfortunately, a client recently wound up on the wrong side of that contrast and didn't understand a simple business function was creating risk until it ended up in a nasty lawsuit. The issue surrounded contacting references after an account has become delinquent. We've preached in the past that this practice can carry risk. There are strict rules about what can be said and asked on such calls, and the law books are filled with many examples of references that have successfully brought claims against creditors under the Telephone Consumer Protection Act and theories.
The issue with this client is that someone in its organization decided that the company would begin texting references if they didn't answer a phone call. Needless to say, their luck was bad and they sent a text to a reference that was familiar with this type of litigation. In my opinion, the reference manipulated the company representative into a series of texts, knowing full well how to create a legal claim. Now this company is being targeted by a law firm that has a successful track record in these matters.
This is only one example of danger often lurking just below the surface of your business. We've provided plenty of other examples in our weekly tips and webinars: payment waterfalls, credit reporting, Article 9 letters, advertising, the list is long.
How do you defend yourself? Engage us to examine your various functions and processes. Allow us to help you "build a better mouse-trap", or at least help you understand where risk truly resides. Don't wait, reach out today
If you have any questions please reach out to Ignite at info@ignitecp.com