New Technology to Aid Debt Purchasers with Media

A technology firm in San Francisco says its new program gives ARM companies access to all-important consumer credit transaction documents, helping collection agencies cut down on frivolous lawsuits by consumers, and allowing debt purchasers to evaluate portfolio deals more effectively by tracking a portfolio’s chain of title.

The documents, commonly called “media” in the accounts receivable management industry, have traditionally been a sore spot with debt purchasers and collection agencies. Media is often required to validate a consumer’s debt when they ask for it and media is also required in court if a dispute makes it that far.

Collectors also find media useful in the collection process. Certain files, like previous account statements, can help a collector understand the payment patterns of a debtor. In order to obtain the media, manual requests have to be made along the chain of title of the account, eventually landing on the original creditor’s doorstep.

So Gary Portney, CEO of Convoke Systems and a software and technology veteran, saw an opportunity to create a system that allowed end-users to access the media in a more direct way. “I saw that the industry needed a link between issuers, purchasers, and collectors,” Portney told insideARM.

Currently, Convoke focuses only on credit card debt. The system goes to work when a credit card issuer sells a portfolio of accounts. When the accounts are transferred over to the buyer, the seller then goes into Convoke and uploads digital copies of all media. The right to access that media is then transferred to the buyer. When a collector with the buyer, or one that was contracted to collect on the account, needs a piece of media, they request it in the Convoke system. Instead of waiting days or even weeks to obtain the documents, the media is available instantly within the system, according to Convoke.

The buyer pays per piece of media under the system — typically $5 to $15 — the same way the process currently operates, though buyers using Covoke will have instant access to the files. Convoke keeps a percentage of the media fee as its revenue.

It’s not just media that is being tracked by the system. A clear chain of title is another intentional byproduct. Since each seller must grant and accept access rights, there is no ambiguity surrounding who has previously owned the accounts. Portney said that this will help debt purchasers evaluate deals, especially further down the chain.

“The further you move away from the issuer, the more excited [the debt purchasers] are getting about this system,” said Portney.

The system is also helpful to issuers who want to know where their accounts currently reside. “This also gives creditors downstream visibility,” said Portney. “They can run a disposition report if they ever need to know who owns a particular account.” Portney said this can be helpful if a debtor ever sends payment directly to the creditor after collection efforts by a third party.

The Convoke system was designed with data security in mind. Access to the system is controlled through an access control list – only those on the list have the ability to log on. And only the current owner has access to individual accounts.

Mike Merritt, Convoke’s vice president of engineering, noted that the system was designed with compliance regulations and standards in mind. He said that the system complies with new PCI standards, Gramm-Leach-Bliley privacy rules and technical data standards such as SAS70 and ISO 17799.

Merritt said that Convoke’s youth was an advantage when it came to building a fully-compliant system. “We were creating a new product and that helped a lot,” said Merritt. “We didn’t have to retro-fit new standards onto an existing platform, we just built them in.”

Merritt said that they are currently working on HIPAA compliance as the system is pitched to the healthcare ARM market.

Portney commented that the next step for Convoke is to bring all the major credit card issuers on board. "Once we start announcing that the issuers are in the system, we should see heavy use among the ARM industry," he said.