Compliance in the old days of the credit and collection industry used to be a lot like the carnival game. Whac-a-mole. An issue would pop up, the company would correct it — whack it, if we’re following the rules of the game — and then move on until another issue popped up. But that model doesn’t work anymore, John Bedard argues in his latest episode of “Ask The Compliance Expert” podcast.
Now, the industry runs more like a Swiss watch, with gears interlocking and running at different speeds, yet everything moves smoothly and seamlessly.
“The more I talk with clients about how they are managing that risk, the more I see how sophisticated the systems are getting,” Bedard says during the episode.
Looking at the differences of risk assessments and audits, but how those two functions need each other to be effective, Bedard discusses the compliance management system and how they have matured. Risk assessments are vehicles to ask the question – what should my policies and procedures be, Bedard says, while audits measure whether a company is doing what it says it’s supposed to be doing.
“The government,” when conducting an investigation, “looks at what you say you do and compares it to what you actually it do,” Bedard said. “And then they compare both of those things to what you are actually doing. It is the culmination of all three of those questions -that I think are the hallmark of a mature compliance management systems.”
When assessing the effectiveness of a given policy or procedure, such as whether a company says the mini-miranda on every call, there are two types of controls, Bedard says — preventive controls and detective controls. Preventive controls are the training that companies put into place to teach agents to say the mini-miranda on every call. Detective controls, meanwhile, can come in the form of using tools like speech analytics and call recordings to make sure the mini-miranda is being recited.
Check out the latest episode of “Ask the Compliance Expert,” sponsored by Arbeit Software, here:
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