The idea for TrueAccord began with a late payment on Ohad Samet’s Macy’s card. It was the end of 2012, and Samet, who was working as the chief risk officer for Klarna, started getting phone calls at random times from a number he didn’t recognize. It was a debt collection agency, and for the first time, Samet was on the wrong side of a due payment.
“Something is really broken in that experience,” he says. So he launched TrueAccord, which aims to make the process of debt collection more transparent and customer friendly. It’s a big market, and TrueAccord is one of a growing wave of companies that’s aiming to apply principles from the tech industry to all aspects of the financial services sector.
“Collection agencies make $13 billion to $14 billion in the U.S. alone,” says Samet. “You have about 6,000 different firms, the majority of whom are really small… There’s a lot of money involved and it’s a really negative experience.”
Since its launch last year, TrueAccord has rung up around 18 customers. “We want to bring transparency, ease of use and personalization, and that’s why our customers use us,” Samet says. “A business can sign up and start uploading debt that they want to help us recover.”
Against the litany of billions of lost dollars from unpaid invoices, complaints from customers and lost business, TrueAccord leverages data intelligence, machine learning and behavioral psychology to reach out to debtors and help them set up payment plans to get back on track and get their debts paid off, says Samet.
There are roughly 77 million Americans whose debts are in arrears and they’re at the mercy of an industry that has very little interest in servicing them. “As soon as we get an account in from a creditor, the system builds a profile around the user and tries to get an informed guess on what could be causing the person to be late on payment. Based on that decision, we will send an email and reach out to the person,” says TrueAccord co-founder and CTO and former Google engineer Nadav Samet, Sr. (no relation to Ohad).
The vision that Ohad and his team laid out was attractive enough to draw Khosla Ventures, serial entrepreneur Max Levchin, Braintree founder Bryan Johnson and Hunter Walk and Satya Patel’s Homebrew investment fund to invest $5 million into the company. [Update: TenOneTen Ventures is also an investor in TrueAccord.]
“TrueAccord’s automated and user-friendly solution enables consumers to pay or dispute their financial obligations through an easy-to-use online interface,” said Ben Ling, partner at Khosla Ventures, in a statement. “They set out to treat people fairly, so companies can maintain an on-brand approach.”
The team also includes Nadav Samet, Jr., who worked on the 8200 Intelligence Unit of the Israel Defense Forces.