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How to make consumers' experience with collectors positive

Mar 09, 2015 Philip Burgess

Debt collectors have to use various strategies to interact with consumers and create a good relationship with them. It's a challenge when the main goal is getting money returned to organizations debtors borrowed from. Debt collectors also sometimes have an undeserved bad reputation with the public when they're only doing their jobs.

Reactions to these professionals have spurred new regulations in the industry. The Consumer Financial Services Group at Ballard Spahr wrote a blog post that discussed how collectors will face obstacles such as sending debtors written notices before taking any other action.

Building a relationship with debtors
With heavy regulations in place for these professionals, there are strategies they have to take with consumers to make it a pleasing experience for all parties. A report on responsible debt collection by the International Finance Corporation had some recommendations for professionals making calls and interacting with debtors:

  • Transparency: The relationship between the debtor and collector should always be transparent. Debtors have the right to be aware of all the information available to them about their debt, and professionals have the obligation to provide it. The source stressed how consumers should be knowledgeable about the consequences if they default on a payment, as well as the procedures and conditions of the debt.
  • Develop healthy relationships: The report insisted on collectors using ethical practices to create strong relationships. This includes simple characteristics such as being aware of what hour of day they should be called and how many times a day. Professionals should also be conscious of the kind of language and articulation they're using on the phone, as well as avoid any threats or intimidation tactics, since these are illegal. Taking advantage of these minute details can help professionals cultivate better relationships with consumers.
  • Promote ethical practices: One of the highlights of the report was the suggestion to improve the interaction between debtor and collector by encouraging ethical practices. This means avoiding manipulating legal or political organizations to get more information about debtors, which may be illegal, depending on state regulations. Agencies should also be on top of training to ensure that debt collectors excel by applying these practices.

Making the best experience for consumers
All of these techniques can be applied before even contacting the debtor. The International Finance Corporation recommended identifying the consumer's situation and noting how many missed payments there were. This will allow professionals to estimate what debtors' willingness to pay back will be and make it easier to discuss options with them.

Additionally, there should be various "exit options" - as the source called them - available for clients. Although there are very few alternative avenues for debts, there are sometimes opportunities for restructuring or modifying payments. The source also highlighted creating contact strategies that will align with customer situations. This means making costs line up with recoveries and payment options for debtors. Again, this can be difficult - many agencies have a single payment strategy for all of them.

Working with professionals and aligning a plan that will suit their lifestyle can make it easier for professionals to collect the money. It can be difficult to apply some of these strategies, but as long as debt collectors remain positive and open with consumers, they can make a new name for the profession.