campus aca
By Rachel Remley
The New Problem Solvers
Today’s challenging economic environment has spurred many collectors to reinvent themselves
Before the economic downturn, collection professionals could suggest consumers tap into their
home equity lines to pay their debts,
particularly in light of how accessible
credit was at the time.
However, according to John
McNamara, co-founder and director of
Fidelis Recovery Solutions and chief
marketing officer for LiveVox in
Roswell, Ga., collectors have had to step
up their game to remain successful in the
current environment.
“If you look at nonmortgage debt
paid with home equity, it took off in
2005, peaking at around $52 billion a
year that consumers were taking out of
their home equity lines to pay other
things,” McNamara said. “It hit me that
collections didn’t require a lot of
negotiation in those days.”
Although collectors have always
needed to be skillful negotiators,
McNamara said that when credit was
more prevalent, collectors often acted as
“order takers” on the collection call,
directing consumers through various
payment options.
“The perceived ‘good’ collectors
could call a consumer and say, ‘You have
a balance of XYZ and I see that you have
a number of home equity loans you
could use to pay this off and have some
left over cash,’” McNamara said. “It was
a pleasant conversation.”
Unfortunately, times have changed.
“We’ve always faced recessions and job
loss, but this is the first time as collectors
that we’re facing such a crushing
withdrawal of credit,” McNamara said.
The economic recession created a
new demographic of consumers who had
never before experienced financial
difficulties. Add to that fewer credit
options and collectors unaccustomed to
DEVELOPMENT
Campus ACA Training Opportunities
Take advantage of training your collectors can do from their desks with Campus ACA’s online seminars, teleseminars and computer-based training opportunities.
more difficult collection conversations
with consumers, and you have the
perfect storm.
A more challenging collection
environment can often weed out those
not collecting effectively. According to
McNamara, collectors who have
remained successful have had to reinvent
themselves. They have been forced to go
back to basics and work on everything
from sharpening listening skills to
getting complete information.
Effective listening can help collectors
determine how much consumers can
afford to pay down their debt each
month.
“The right way to collect debt—no
matter the economy—is to be a helpful
problem solver,” McNamara said.
Collection agencies have also turned
to scoring and skills-based routing to
give their collectors an edge in the
market. Skills-based routing programs
match accounts with collectors most
likely to obtain payment. Coupled with
scoring, the account will not only go to
the right collector, but that collector will
also know more about the consumer’s
ability to pay.
“The economy has forced
organizations to accelerate the speed at
which they increase technology at their
organizations,” said McNamara. “More
agencies are using scoring than ever
before.”
Scoring accounts can also help
consumers get to the right collectors.
According to McNamara, if data shows
a consumer has a high likelihood of
paying a bill, the account should be sent
to a more experienced collector.
“An experienced collector knows
how to read the credit report, how to
solve the situation and get the most
payment,” he said. “You’re really selling
the consumer on taking a positive step
toward more stable financial footing.”
McNamara believes the current
economic environment will lead to a
bright future.
“With each recessionary situation,
businesses get smarter and continue to
improve their processes,” he said. cm
Rachel Remley is manager of Campus
ACA marketing communications.
