The Consumer Financial Protection Bureau (CFPB) expects Accounts Receivable Management (ARM) organizations to monitor relationships with service providers to ensure compliance with federal laws. The purpose of these laws is to protect consumers from harm. But companies must do more than fill out a form and distribute copies of vendor or supplier certifications. You need to know service providers are effectively managing compliance with applicable consumer data security and privacy laws and regulations. Businesses must complete proper due diligence and implement controls that ensure safety and compliance. A strong, effective program from an independent third-party data security expert protects your Accounts Receivable Management organization from risk and ensures employees are trained on the correct procedures to limit exposure.
FTC and CFPB Expectations
The FTC and CFPB expect:
- Companies have effective processes for managing the risks of third-party relationships.
- Consumers aren’t exposed to risks and vendors comply with federal consumer law.
- Unfair, deceptive, or abusive acts or practices have not – and will not – occur.
Accounts Receivable Management companies can meet these expectations by doing the following:
- Verifying vendors comply with federal consumer financial laws.
- Auditing vendor training and confirming processes for oversight of their employees.
- Establishing contracts that guarantee long-term compliance.
- Supervising vendor compliance efforts to ensure alignment with federal laws.
- Implementing procedures for timely response to risk exposures and consumer protection concerns.
Your Accounts Receivable Management company can successfully oversee vendor compliance by applying the following best practices:
- Create a Process for Data Flow – Show vendors how you expect data to flow from them to your organization. Establishing a process helps to eliminate unforeseen areas of concern.
- Notification of Audit Plans – A vendor compliance management program must include periodic audits. Notifying customers of your intent to audit their compliance measures prior to the event enables ensure appropriate resources are available for your audit and shows you value the partnership.
- Build Relationships Face-to-Face – Scheduling on-site visits is of the most effective ways to solidify vendor compliance.
- Learn Their Processes – How do vendor processes flow into your Account Receivables Management company’s methods? Understanding how their business model works ensures compliance and smooths out workflow.
Are you ready to learn more about you RevSpring can support your vendor compliance efforts? Click here to contact us today.