News & Resources

Virtualization is making debt collectors' lives easier

Dec 11, 2018 Phil Burgess

Virtualization is making debt collectors' lives easier

Nobody ever said that a debt collector's job is supposed to be stress-free. Finding solutions to difficult and varying circumstances can be challenging and mentally taxing. But recent developments in virtual collection technology should allow collectors to breathe a little more easily.

Consumers can also benefit from these new strategies, which aim to simplify and privatize the process. Below are some of the benefits collectors are enjoying as a direct result of virtualization.

Speed up the process and increase compliance


Payments Source said that virtual collection programs allow debtors to have access to a more simple and effective form of negotiation. Instead of having to explain the intricate situation to a person - which the source noted can cause embarrassment and tension - consumers can now make payments in an automated and private setting. This reduces the amount of time the individual has to spend going through the process, and achieves better returns for collectors. Compliance becomes less of an issue for agencies, as debtors may feel more inclined to resolve their debt when it is offered in a virtual setting.

There are three main types of virtualization that collectors employ, according to Payments Source: virtual agents, settlement plans and negotiation.

Smaller businesses most commonly employ virtual agent services, which allow debtors to keep tabs on their balances online. They can make payments and view records. It's a simple, but effective, method. Meanwhile, settlement plans give users increased control over flexibility. They can structure their payment schedules to reflect their financial position, while still ensuring that the entirety of the debt is paid back over a certain amount of time. Finally, negotiation services offer the ability to reconfigure balances and formulate a plan with the debt collector to find a mutually beneficial solution for both parties. The debtor can counter the amount they are required to pay, and the automated system will decide whether or not this is feasible based on their financial circumstances.

Eliminate the risk of lawsuits or regulatory hassles with automation
Fox Business reported that debt collectors can often avoid legal issues and consumer complaints by using virtualized systems. By programming state requirements and disclosure statements into the system, confusion and gray areas can be circumvented. Also, since debtors initially contact the agency in this scenario, breach of privacy and harassment concerns tend to be alleviated.

While dealing with a machine instead of another human can be impersonal, it ensures that regulations are adhered to and that debtors follow set guidelines. This guarantees fair treatment among all users with no chance of preferential treatment.

The process of initiating the use of virtualized collection systems begins when the debtor receives a letter in the mail providing information about the services. If they choose to partake in virtualization, they can then set up an account and customize payment strategies and automation preferences. This method is more tailored to debtors' needs than traditional practices, leading to an overall more positive experience.

Debt collection agencies should take advantage of virtual systems due to their ability to offer an easier, faster and more comfortable process for debtors. The use of such technology may also decrease an agency's chance of violating regulations or having debtors prolong payment without being noticed, since it uses automation tools to prevent such occurrences.

It is easier to achieve higher levels of compliance when the debtors can interact with an automated system, as opposed to a human representative. When consumers are more comfortable with the collection process, they are more likely to be amicable toward the situation, which makes debt collectors' jobs less stressful. The goal for collectors is to create a positive experience with seamless transactions, and the best way to supervise and enforce that is to virtualize.