While the economy presents unique collection challenges, many agencies are seeing positive results
Some of the first things new collectors learn on the job are how to actively listen to consumers, prepare for each call and stay in compliance with the law. But in the current economic environment, many collection agencies are taking training a step further.
“In today’s economy, the collection industry has had to make changes to their practices and training,” said Irene Hoheusle, vice president of collections for Account Recovery Specialists in Dodge City, Kan.
In some instances, collectors have taken on the role of financial counselors as they guide consumers through their options.
Although Hoheusle said Account Recovery Specialists’ collectors have always worked with consumers to find the best solution, they have recently adopted a “soft collections” approach, which extends the amount of time dedicated to working an account.
“We try to go above and beyond the first 30 to 90 days of working an account to investigate, resolve and explain any issue a consumer has, including helping them budget to set up an affordable payment arrangement,” she said.
Often this process includes contacting the consumer’s insurance company to find out if it can re-open denied claims.
“We hold off on any credit reporting for 90 days to allow them to get their insurance straightened out or provide voluntary payment-in-full so they don’t damage their credit,” Hoheusle said.
While many consumers face difficult financial situations, they also face fewer options for how to pay their bills as lines of credit become scarce. Because Account Recovery Specialists collects medical debt, the company emphasizes the role of third-party payers in its training.
Third-party payers include anyone other than the consumer that may owe a portion of the debt, including commercial health insurance companies, workers’ compensation carriers (which causes the accounts to be sent out of collections), auto insurance companies, crime victim compensation boards, personal injury settlements and more.
According to Hoheusle, teaching collectors to be more attentive can help resolve issues more quickly.
“We’ve spent more time training staff how to contact insurance companies and help patients get their issues resolved so they owe less out of pocket,” she said.
Terri Boettcher, vice president of collections for BC Services in Longmont, Colo., said her collectors also try to be as flexible as possible with consumers when setting up payment arrangements.
“We’ve always been financial counselors to the consumer,” she said. “We evaluate their situation and suggest the next best or most logical recourse.”
According to Boettcher, the recent economic downturn has become a common stall on collection calls, which her collectors work hard to overcome. Often when consumers provide stalls of that magnitude, collector confidence can play a major role in the ability to obtain payment.
Boettcher noted that the frequent media coverage on the poor state of the economy can be a major roadblock for collectors. BC Services teaches its collectors to overcome this obstacle by reminding consumers that paying their bills can help strengthen the economy.
“We also have successful collectors mentor struggling collectors, who may be experiencing fear or negativity regarding their ability to collect,” Boettcher said. “As one of my collectors says, ’If you think you will or won’t, you’re right.’”
Today’s collectors face new and more cumbersome stalls and objections, but that doesn’t mean agencies aren’t experiencing successes. Boettcher’s agency, for example, has seen positive results and hopes to exceed their best month.
Hoheusle agreed, noting that 2009 was the best year yet for Account Recovery Specialists, which led the company to increase its collection staff.
“We increased our collection staff to keep up with the overflow of accounts we receive,” she said. “With a poor economy there is no shortage of bad debt, but it’s harder to collect that debt.”
As collectors continue to develop new ways to help consumers in a slow economy, most would agree it helps to know that the industry is able to handle the challenge.
“Believe it or not, the down economy has helped us to be even better than we were,” Hoheusle said. “We took a good look at where we were and where we wanted to be, then put our money into our employees’ training and implemented their suggestions for improvement.”