A shift in collection tactics

The year I entered the debt collection industry was 1980. The year that FDCPA was enacted. Over the next few years, I watched as the company I worked for (an industry leader) struggled to comply with a new business model. One time we lost 5 major clients in one day because we ended up on the evening news. This was the result of one collector that came to work on a Saturday morning and threatened someone. I am not saying it wasn't justified. It was just difficult to get all those employees to comply without technology. New training programs were implemented, floor monitors were employed, but change was slow. The company on the whole embraced the change but it was difficult with 120 offices and thousands of employees to get experienced collectors to comply with new regulations. People don't like change. Back then the approach was simple; 1). Call the debtor 2). Make a demand for the balance 3).Give the debtor 5 days to get the balance in your office 4). Hang up on the debtor 5). Keep calling every 2-3 days until you got their attention. 6). If they resisted, talk louder. 7). Make the debtor prove that they exhausted every possible friend and relative, life insurance, retirement account, etc. If that did not work, drop to a payment plan as a last resort.

Not All Clients Embraced Change

I am often reminded of "Morty" in "Goodfellas". "Jimmy, I want my money". Most of my clients in the 80's felt that way. They did not have to embrace my regulations. In the collection business, you are only as good as last months remittance check. As a result, there was always lots of pressure to collect more than your competitor to keep your client. At the end of the day, managers would look the other way as long as you didn't get caught. When you did get caught, you got fired. Someone would give everyone a speech about the importance of collecting without complaints and then the next month your client would call, put more pressure on you and the process would start all over again.

Collections Evolve

Since those early days in 1980, I have watched as most of the 2000 companies in our business have worked tirelessly to evolve into a sophisticated business. Phone calls are recorded, training is ongoing, certification is available, everything is documented. That being said, we still deal with a minefield of regulations every day that many times have conflicting goals.

Today, agencies are evolving in a difficult environment. That being said, we still have thousands of complaints. I have to laugh when I hear that complaints to the FTC and State
regulators are at an all time high. These statistics are never compared to the volume of accounts handled, just the number of complaints received. In 1980, the largest company in the collection industry received about 500 million in placements per year. Compare that with the hundreds of billions of dollars placed for collection in 2010. If you did the math, you would find that the percentage of complaints is significantly lower over the last 30 years.

The New Shift in Collections

The average debtor today thinks that not paying their bill doesn't really carry the stigma it used to. People say all day long "I don't care about my credit". In order to be successful, we need to become more salesman, less collector. I applaud the ACA for their ASK Doctor Debt Website. Today, successful collections is about educating, counselling and selling the debtor on the benefits of paying their bill. The phone calls are longer, the good collectors are way more savvy and management spends every day trying to figure out how to do the best job possible for the client, stay out of trouble and keep moving forward. I'm proud to be part of this industry. Regardless of what outsiders say about us, I am proud to be a debt collector. This is the future of debt collection. It's doing the right thing even when everyone else criticizes you regardless. Oh, one last thing, the upper management of most companies have realized over the years that bad press and complaints are not worth crossing the line. Most are now equally concerned about results and professionalism. The ones who cling to the "get results at any cost" can take you down with them. It's not worth it.