A fresh approach to debt collections
Jun 10, 2013 Phil Burgess
Some debt collection agencies have taken a new approach to practices in an effort to improve the reputation of the industry and cultivate stronger client relations. Though all debt collectors must follow federal regulations such as the Fair Debt Collection Practices Act, many go above and beyond the call of duty to ensure the most customer-centric procedures can pay off in a short period of time.
The industry has become the subject of much scrutiny in recent years, especially as activities have intensified in light of the record-level of outstanding debts currently held by consumers and businesses in the United States. However, the actions of newcomers to the industry have tarnished the name of longer-standing, seasoned professionals.
Debt collection agencies were among the most complained-about entities in 2012, according to data from the Federal Trade Commission. However, this does not need to perpetuate in 2013 and beyond, as debt collectors seem to be focusing more on refining operations to develop healthy and professional relationships with debtors.
One novel method in Delaware
The Wilmington News Journal recently reported that a debt collection agency in Delaware, Philips and Cohen Associates, has decided to create a desirable incentive program for employees who provide exceptional services to clients. Instead of having a results-oriented process characterized by stronger returns that lead to higher rewards, the company recognizes staff members who follow collection laws closely.
According to the source, the agency's executives would pay out as much as $400 in incentives for employees who follow internal and external best practices flawlessly. This includes everything from the FDCPA to the firm's internal guidance related to greeting those on the other end of a call and helping the consumer in question through the repayment process.
The news provider explained that this effort has been so successful that the agency was voted the fifth best place to work among mid-sized companies in the Wilmington, Delaware, area. What's more, the firm holds regular employee appreciation days, and focuses on creating the best possible workplace for its staff members in an effort to strengthen overall operations.
The Wilmington News Journal noted that the firm's executives have seen increases in employee productivity, though this has not yet translated to higher collection rates. The executives told the source that better productivity is desirable, but many debtors simply do not have the money on hand to payoff outstanding loans. Regardless, the collection agency continues to grow and remains committed to improving the relationships it has with clients and debtors.
Beware new legislation
InsideARM recently reported that the Massachusetts state government is now warning debt collection agencies of doing business with unlicensed short term lenders. According to the news provider, one agency from Nevada was working to collect debts that were created through unlicensed, illegal lenders in Massachusetts. The state's Office of Consumer Affairs and Business Regulations ordered the firm to terminate efforts immediately.
Debt collectors should always do adequate research to ensure that the loans they are purchasing and seeking out were made in a legal and defensible fashion.