Hi,
Over the next few blogs, I will be investigating various aspects of collection agencies. First it is necessary to get a general idea about the types of accounts collection agencies receive from their clients. About 10% of the accounts received consist of debtors who have overlooked, ignored, or forgotten to pay a small bill and have the means to pay it. 25%-30% of the people who have bills sent to collection are folks that have some financial difficulty and have chosen to ignore these particular bills due to frustration, lack of being able to arrive at a suitable payment arrangement with their creditor, and naivete about the collection process. The next 35%-40% are people that have severe financial difficulties, and in most cases, no ability to service their debts. These people need long term work- outs, and or settlements. Repeated attempts by creditors to deal with these people have resulted in numerous payment arrangements which have not been kept. The remaining 15%-20% are, in most cases, "professional deadbeats." These people have intentionally run up as much credit as they could with absolutely no intention of repayment. In most instances the addresses, phone numbers etc., provided to the creditor are not valid, and, in fact, accurate information was never given in the first place. When creditors send accounts to collection agencies, usually they also send comprehensive payment histories which include all communication with the customers and any broken repayment arrangements. Tomorrow I'm going to start talking about how a collection agency operates.
Until then,
Alan
Showing posts with label past due bills. Show all posts
Showing posts with label past due bills. Show all posts
Monday, March 12, 2007
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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