Hi,
Let's discuss how an account is handled once it reaches a collection agency. After the account is entered into the system, an initial letter is generated notifying the debtor of the obligation, and the necessity to resolve the matter as soon as possible. Many collection agencies have collectors that specialize in a particular type of collection. This allows the collector to become knowledgeable about documentation supporting certain types of debt which enables the collector to communicate clearly with the debtor and develop a good working relationship with the client/creditor. After an account is received by a collector, he or she reviews the financial information provided by the creditor and any previous communications with the debtor. This allows the collector to become familiar with the debtor's capabilities and to formulate an approach suitable to that account. Caller ID has made it necessary for a collector to be as effective and efficient as possible on the initial call, as in many instances, it might be the collector's last verbal contact with the debtor. Unlike many other types of negotiations that take days, weeks, and in some cases, months, a collector needs to go from start to finish in one phone call. This is the reason collectors prefer to receive a lump sum payment on an account rather than a long drawn out monthly payment arrangement. This is not to say that when the need is apparent for monthly payments on an account, a collector will not be more than happy to accept the arrangement. It is important to remember that if a payment is broken with a collection agency, that the full amount will become due with no further payment arrangements accepted. Resolving a debt with a collection agency might prevent legal action against the debtor, or at the very least, significant damage against the debtor's credit report. Tomorrow, I will continue talking about the collection process.
Until then,
Alan
Showing posts with label collectors. Show all posts
Showing posts with label collectors. Show all posts
Wednesday, March 14, 2007
Tuesday, March 13, 2007
Entering the World of a Collection Agency
Hi,
In yesterday's blog, I discussed some of the types of people collection agencies deal with on a daily basis. Now let's look at the mission statement of a collection agency and examine some of the common misconceptions about collection agencies. The mission statement of a collection agency is to recover as much money as possible on any account given to them by their clients. Their goal is to achieve this under any means possible allowed by the Fair Debt Collection Act. Some of the common misconceptions about collection agencies are:
1) Collectors enjoy harassing people at home and at work. Fact: Every collector on the planet would like to resolve an account with one phone call. The only reason for additional phone calls on an account are due to broken payment arrangements.
2) Collectors are unreasonable when it comes to accepting settlement offers on accounts. Fact: Creditors have already lost anywhere from 15%-50% on their bill, and as a result are much more unlikely to accept low settlement offers. As collectors are paid a small salary plus commission on the amount they collect, they are highly motivated to take any reasonable settlement and offer it to the creditor.
3) Skip tracers practice unethical business behavior. When skip tracing professional deadbeats, skip tracers on occasion might represent themselves to neighbors, coworkers etc., as a friend of the debtor to obtain pertinent contact information.
4) Collectors are hard nosed and inflexible. Fact: Due to the nature of the business, collectors are constantly under a lot of stress. Certainly they have their bad and good days as do all of us. But, they are primarily paid on commission and are very interested in resolving accounts as quickly and efficiently as possible.
It's important when dealing with a collection agency to remember that the collector you are talking to is used to broken arrangements, broken promises, and in many cases, verbal abuse. If you communicate honestly, he or she will be more than happy to resolve your account as quickly as possible to your mutual satisfaction. Tomorrow, I'll write in detail about the collection process.
Until then,
Alan
In yesterday's blog, I discussed some of the types of people collection agencies deal with on a daily basis. Now let's look at the mission statement of a collection agency and examine some of the common misconceptions about collection agencies. The mission statement of a collection agency is to recover as much money as possible on any account given to them by their clients. Their goal is to achieve this under any means possible allowed by the Fair Debt Collection Act. Some of the common misconceptions about collection agencies are:
1) Collectors enjoy harassing people at home and at work. Fact: Every collector on the planet would like to resolve an account with one phone call. The only reason for additional phone calls on an account are due to broken payment arrangements.
2) Collectors are unreasonable when it comes to accepting settlement offers on accounts. Fact: Creditors have already lost anywhere from 15%-50% on their bill, and as a result are much more unlikely to accept low settlement offers. As collectors are paid a small salary plus commission on the amount they collect, they are highly motivated to take any reasonable settlement and offer it to the creditor.
3) Skip tracers practice unethical business behavior. When skip tracing professional deadbeats, skip tracers on occasion might represent themselves to neighbors, coworkers etc., as a friend of the debtor to obtain pertinent contact information.
4) Collectors are hard nosed and inflexible. Fact: Due to the nature of the business, collectors are constantly under a lot of stress. Certainly they have their bad and good days as do all of us. But, they are primarily paid on commission and are very interested in resolving accounts as quickly and efficiently as possible.
It's important when dealing with a collection agency to remember that the collector you are talking to is used to broken arrangements, broken promises, and in many cases, verbal abuse. If you communicate honestly, he or she will be more than happy to resolve your account as quickly as possible to your mutual satisfaction. Tomorrow, I'll write in detail about the collection process.
Until then,
Alan
Thursday, March 8, 2007
The Evolution of the Collection Department
Hi,
The collection departments of most companies have gone through very similar changes to their credit departments. In the past, when a problem existed on an account it was handled by someone who had the authority to deal with it and solve the problem. Today in many instances when one calls a collection department, one is talking to a customer service representative who has limited authority and is operating under generic guidelines on how to handle each call. It is often necessary to contact collection departments and talk to three or four customer service representatives before one finds someone willing to deal with the particulars of a specific situation. This often results in in the customers becoming frustrated and just paying the bill. Another method employed by corporations in order to save money, is to make access to collection departments very difficult. This is done by setting up a myriad of electronic options, giving the customers a multiple of generic choices, many times of which none apply to their situation. The frustration customers feel when treated this way often results in the customers ignoring their bill, and in the process, damaging their credit. Often time when customers make their way through a maze of generic electronic choices and finally get to a live person in the "collection department" they end up talking to a customer service representative who does not have the authority or ability to deal with their particular problems. The goal of the callers is to make satisfactory payment arrangements for a past due bill. If customer service representatives don't have the flexibility to work with the callers to achieve that end, it is imperative that the callers ask to talk to a customer service representative/ collection supervisor and hope that the supervisor can help find a solution to the problem. On occasion, it might be necessary to request to talk to their supervisor. In the past, when one talked to a collection department, all representatives had the ability and authority to deal with problems. As a cost saving measure, companies replaced most collection people with customer service phone representatives and only kept collection people as their supervisors. This change evolved over the last 25 years as a direct result of the increase in bad credit. Tomorrow I will talk about the effective way collection, credit and sales departments can work together.
Until then,
Alan
The collection departments of most companies have gone through very similar changes to their credit departments. In the past, when a problem existed on an account it was handled by someone who had the authority to deal with it and solve the problem. Today in many instances when one calls a collection department, one is talking to a customer service representative who has limited authority and is operating under generic guidelines on how to handle each call. It is often necessary to contact collection departments and talk to three or four customer service representatives before one finds someone willing to deal with the particulars of a specific situation. This often results in in the customers becoming frustrated and just paying the bill. Another method employed by corporations in order to save money, is to make access to collection departments very difficult. This is done by setting up a myriad of electronic options, giving the customers a multiple of generic choices, many times of which none apply to their situation. The frustration customers feel when treated this way often results in the customers ignoring their bill, and in the process, damaging their credit. Often time when customers make their way through a maze of generic electronic choices and finally get to a live person in the "collection department" they end up talking to a customer service representative who does not have the authority or ability to deal with their particular problems. The goal of the callers is to make satisfactory payment arrangements for a past due bill. If customer service representatives don't have the flexibility to work with the callers to achieve that end, it is imperative that the callers ask to talk to a customer service representative/ collection supervisor and hope that the supervisor can help find a solution to the problem. On occasion, it might be necessary to request to talk to their supervisor. In the past, when one talked to a collection department, all representatives had the ability and authority to deal with problems. As a cost saving measure, companies replaced most collection people with customer service phone representatives and only kept collection people as their supervisors. This change evolved over the last 25 years as a direct result of the increase in bad credit. Tomorrow I will talk about the effective way collection, credit and sales departments can work together.
Until then,
Alan
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