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Debt collection agencies are going for a softer approach

Jun 17, 2015 Phil Burgess

Debt collection agencies are going for a softer approach

Debt collectors are typically not very popular with their consumers. Historically, the industry as a whole has an undeserved reputation of being aggressive and off-putting. In response, agencies have recently started to prioritize customer service as a strategy to see higher rates of compliance.

Creating a friendly, positive vibe can facilitate smooth transactions

Debt collectors are turning over a new leaf to create less stressful interactions with debtors, Yahoo! Finance said. Startup agencies, such as San Francisco-based TrueAccord, are implementing new strategies that emphasize positivity and a more casual approach. The company recognizes that people from all sorts of backgrounds can fall into debt, and that these are sensitive issues that should be treated with caution. By sending slightly amusing - but still assertive - messages to the debtor, TrueAccord aims to open a constructive dialogue and receive an affirmative response.

The source noted that by being clear and upbeat, collectors can be more effective in their efforts. In many instances, debtors become confused by the situation at hand, especially when an agency gets involved. The public image of the industry as a whole is not favorable, so it is important for collectors to do their best to try and alter this perception. Creating an overall amicable experience for customers is a good way to achieve higher response rates and levels of compliance. By working to change the culture of debt collection, agencies can open up new and better opportunities for themselves and their peers down the road.

Regulations require collectors to inform debtors of their rights
States around the country have been implementing regulations on the debt collection industry in recent years, a development that has changed the way agencies operate. For example, in New York, a recent ruling deemed that collectors will now be required to inform debtors of their rights upon making initial contact, according to NPR affiliate WSHU. This new requirement is intended to alleviate potential confusion before it occurs. It also protects debtors from potentially invasive communication, an issue that can cast a negative light on debt collection.

In many cases, those involved in a particular industry are not thrilled when it has additional regulations placed upon it. However, in this instance, debt collectors have been receptive of the new rules. WSHU interviewed industry experts and found that the reactions were generally positive. The source stressed that clarity will lead to increased levels of responsiveness among debtors and create relationships that are less tense. Interactions with customers should go as smoothly as possible, and new regulations are designed to help facilitate that.

While paying off debt is usually not a fun experience, there are steps that can be taken by collectors to ensure that the process is as painless and stress free as possible. By recognizing that these situations are delicate and require careful handling, agencies can start to promote a more positive perception about the industry as a whole. Recent regulations are helping to provide clarity and fluidity for debtors, a development that can ease the process for both sides and contribute to a favorable end result.