Collectors may want to consider different approach

The debt collection industry has been booming for some time now, primarily because of student loan defaulters. This boost in business probably will see no drop in the foreseeable future, as the amount borrowed by Americans for education purposes hit $1 trillion at the end of 2011. In order to successfully secure missed payments, recovery agents may want to consider changing their strategies. InsideARM suggested revamping the methods used to collect academic debts owed. The source reported current tactics, including threatening vague further action and relying on strict policies, are not working, so collectors should consider working with former students. Recovery firms may want to provide an incentive to those who have overdue student loan accounts. InsideARM gave the example of informing delinquent payers about the advantages of a solid credit report, which would be strengthened if they respond to a collector's advances. Collectors are increasingly using various modes of communication when trying to settle a debt, including phone calls and social media. They may want to consider using the mediums when informing consumers about the advantages of choosing a payment plan with a recovery agent, according to InsideARM. It is important that agents working for the collection industry always be kind and courteous when communicating with a consumer. InsideARM proposed working with a consumer, because clearer communications often result in finding a solution that works for both parties involved. The Huffington Post reported the situation from the opposite standpoint, and said that when consumers are respectful and willing to work with collectors, recovery agents often work harder to make the experience simpler. If communications are civil from both sides, the process of recovering a missing payment is often easier and quicker. According to a recent statement by Maryland-based collection firm Access Receivables, the company implemented policies that involve training, awards for customer service and an increase in monitoring calls. Because of these measures, called the Nice People Collect More strategy, the collection agency saw higher recovery rates.  Between November 1, 2011 and March 31, 2012, the company experienced an increase of 40 percent in recovery rates. Seventy-one percent of all debts recovered were overdue student loan payments. Additionally, zero consumer complaints were lodged against the firm during this time.