Great Debate: Does "Too Small Succeed" Mean "Too Small to Comply"?

Joann Needleman of Maurice & Needleman wrote a compelling thought piece on how the concept of Too Big to Fail was leaving a lot of agencies Too Small to Succeed. As all agencies try to leverage themselves in this space, it’s a worthwhile topic to think about.

What was interesting, though, is the conversation that happened in the comments of that story. Rather than a discussion about the challenging economics of the industry, it instead became a conversation about compliance.

Namely: whether or not small agencies care at all about compliance — or if compliance is, instead, an impediment to profit. As one commenter suggested, “Very rarely do collectors go with the ol’ ‘catch more flies with honey’ motto” because “smaller debt collection agents are extremely goal oriented, thus encouraging them to meet the tier of monthly goals (being incentive driven) often by using unlawful tactics.”

This incredibly subjective position was given a lot of scrutiny by subsequent readers. “Most of the debt in this country is collected by reputable companies that do everything possible to comply with myriad state and federal regulations. Companies that employ hundreds of thousands hard working AMERICANS,” one reader wrote.

Another suggested, “As a CCO, I see the exact opposite in terms of standards and requirements for agencies. Look at the metrics required for the major sellers, they care a great deal what an agency, large or small, does in order to collect. While $$ is still important, there is a balance.”

The question might be worth more consideration: Do larger agencies have a competitive advantage over smaller ones when it comes to compliance? What is the cost of compliance to an agency when compared with the cost of lawsuits?

Interested in carrying on the conversation? We thought you were.