Collectors-Minute.com

This is Not a Drill! These economic times are the Real Deal! As mentioned before, I have been in Consumer Collections since 1982. Interest rates were high and times were tough. But, I have seen NOTHING like the times we are in now. Yesterday, I listened to a webinar where the speaker quoted several statistics meant to give you an idea about consumers and the tough times we all face. Here is a only a partial list of the stats.

• There are 9 MILLION families facing negative equity in their homes.
• There will be an estimated 1.9 MILLION repos this year- up 15% from last year.
• 34% of consumers with a scoreable credit report have at least one collection item.
• Mortgages made after Jan. 2005 to prime consumers already have an 8.5% delinquency rate. That is up 491% from mortgages made previous to that time frame.

So, what must we do in our “collections” world to be ready for what may come next? 2008 has been full of tumult, no one really knows what will come in 2009. I began to look at things I have been doing and realized it has helped. I will list some of these things and a few others that we all should consider.

First: Look at every area of the collection process within your group. Ask these questions; What can we do better and/or with less resources? Can we eliminate a step or two and make the process faster? What are we doing that is really not giving us a return? No payments/money coming back for the effort expended? If you can’t track it and it is not “required” – you may want to modify or stop it.

Second: In order to apply individual pre-planned collection action to each account as needed, consider segmenting your list by assigned risk levels. You may already do this by name and known payment habits. But consider assigning a user field with a service level code that will immediately indicate what step of the collection process is taken when the member/debtor goes past due. Read the rest of this entry »

Technorati Tags: Collection Techniques, Review Your Process, Save Time/Money

Move the fence…. Many of us do not realize we have a “fence” for members. The fence I am talking about is the number of days past due we will allow a member before we make calls or send a personal letter. For many of us the fence may be thirty (30) days or it may be forty-five (45) days past due. We know we get judged on accounts over sixty (60) days, so that is “our fence”. We do not want members to get that far past due for sure.

The phrase “move the fence” means to move the line back a few days. If at 35 days you start looking at accounts, then start looking at 28 days. If you don’t even get serious before an account goes 45 days, the move your line back to 30 days and start working accounts sooner! My goal is to look at every account that is 12 to 15 days past due to spot trouble and get ahead of it. There are many ways to do this and it may take a combination of several of them to accomplish the goal. You may have to reassign duties to other collectors. You may have to work one more night a week or a half day on Saturday. You could start sending the personal collection letters sooner and drop one of the automated notices. You could use automated phone calls through our website – www.auto-dialer-solution.com But, the entire process will be good for you and the Credit Union/Financial institution as a whole. Here is what you can expect as some of the benefits for moving the fence and start working accounts sooner…

• The Speaky Wheel Gets the Grease! It is true! When you squeak earlier and longer you get the member’s attention and their payments.
• You must train your members to pay you sooner. You teach them by your attitude and sense of urgency. When your attitude of what is acceptable changes, then they will know and act accordingly. Remember, people are predictable in groups not as individuals.
• Major Benefit: if you “rehab” a member so they start paying under 15 days past due and something happens to their finances, you have more time to help them than if they were floating at 45-50 days past due. 

The extra effort is always worth it. Avoid the last minute collections on the last day of the month that make the job so much more stressful. Start moving the fence first in your thinking and then in your actions. Make a list of steps to retrain your members to pay on time and start making the changes- today. Get help. Pull others in and help them see how the entire Credit Union will benefit from these steps. We often need to train front line staff to properly convey the importance of paying loans on or before the due date. Do not train your members to relay on the grace period before they pay!

It is important to take these steps now. As volatile as 2008 has been, who really knows what will happen in 2009? Please, don’t ignore this advice and regret it in July or August of 2009…..

Technorati Tags: Attitude, Collection Techniques, Evaluate

Today, we bring you another Collector’s Minute. This time, we take up the need for “attitude enhancement”….
View text version here. | Listen to audio version here.

Technorati Tags: debt collector attitude, debt collector manners

Today, we will discuss – Attitude. This is so important because we are most always talking to people under financial stress…
View text version here. | Listen to audio version here.

Technorati Tags: debt collector attitude, debt collector manners