Collection agencies play an important role in helping consumers recover from financial distress. Balancing compliance requirements with clients’ recovery expectations is certainly not always easy. Because of the complexities of a successful debt collections practice, it is important that collection agencies have efficient and effective strategies for maximizing their recovery efforts.
Below, Jefferson Capital Systems reviews seven tried-and-true techniques for efficient debt collection that can help agencies maximize recoveries.
Utilize Automated Collection Workflows
Automated collection workflows are highly effective for streamlining the collection process, from initiating contact with consumers to tracking payments and more. By using automated workflows, collection agencies standardize the handling of accounts to ensure all accounts are worked in a timely and compliant manner.
Develop a Passion for Compliance within the Collections Industry
It is essential for agencies to constantly stay up to date on the laws and regulations governing debt collection. Compliance concerns are ever changing as new statutes, regulations and case law develops. As compliance expectations evolve, collection agencies must adapt their policies and procedures to address those needs. Developing a passion for staying abreast of changes helps minimize regulatory and litigation risk.
Implement Technology Solutions
Technology is an essential tool for collection agencies to satisfy consumers’ communication preferences and meet client expectations for recovery rates. From AI-enabled contact centers to online payments, text messaging, and automated reminders, technology makes the collection process more efficient and effective. As technology evolves, agencies must stay up to date on the latest trends, and the corresponding compliance impacts.
Offer Multiple Payment Solutions
Collection agencies should offer consumers multiple payment solutions to resolve a debt. Most consumers genuinely want to repay the money they borrowed, but need flexibility in the repayment terms. Providing consumers repayment options helps to de-escalate the collection interaction and opens the door to negotiation between the debt collector and the consumer.
Connect with Consumers on an Emotional Level
Connecting with consumers on an emotional level is essential to successful debt collection. By showing understanding of the consumer’s circumstances and providing support, agents can more effectively negotiate a solution that meets the consumer’s needs and the client’s expectations.
Leverage Debt Collection Vendor Expertise
Through utilizing vendors that specialize in debt collection services, agencies gain access to invaluable resources for the collection process. Whether it is licensing, skip tracing, or IT solutions, vendors play an essential role in a modern debt collection practice. Vendors frequently have extensive expertise and experience navigating technical aspects of the collection process and the compliance concerns of highly specific areas of the law. In addition to potential cost savings, the use of vendors helps free up internal staff to focus on other areas of the operation as an organization grows.
Take Care of Your Employees
It is of utmost importance for agencies to invest in their employees. Regardless of how much technology an agency utilizes, employees are an organization’s most important asset. Judging by the help wanted ads, the collections industry generally has a high rate of turnover. However, organizations that retain employees reap numerous tangible and intangible benefits. The tangible benefits include a reduction in hiring costs. Hiring recruiters, sign-on bonuses, human resource head count and training staff costs add up quickly. The intangible benefits of employee retention help develop a successful corporate culture. Retaining institutional knowledge, continuity in processes and systems, and nurturing loyalty are all intangible benefits of employee retention that play an important role in an organization’s success.
Debt collections is an art, not a science. Debt collection companies implement a wide variety of collection techniques to varying degrees of success. The debt collection techniques discussed in this article by Jefferson Capital Systems increase the odds of collecting debts in a respectful and compliant manner that empower consumers to resolve their delinquent debts, while also meeting clients’ recovery expectations.