Tag Archives: Collections

Collections & Recovery Three Top Regulatory Themes Emerge from Debt Collection Panel

Three Regulatory Themes
Apr102017

I recently moderated a regulatory panel discussion before a group of nearly 100 collections and recovery (C&R) professionals at the FICO® Debt Manager™ User Group Forum. The esteemed panel consisted of a mix of veteran policy and business leaders, including: Maria Wolvin, Vice President and Senior Counsel of Regulatory Affairs at ACA International; Terry Collins, Collections and Recovery Manager at Trustmark National Bank; and Lucia Lebens, Vice President of Government Relations and Public Policy at Navient. Much of the discussion focused on what C&R professionals can expect in the new US regulatory environment that has emerged in the wake of the November elections. While our experts spoke on a number of hot-button topics, three main themes emerged. CFPB Debt Collection Rulemaking Will Likely Move Forward The panel discussed the CFPB’s continued focus on developing new debt collection regulations. The CFPB has indicated that its next pre-rule action will be the... [Read More]

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Collections & Recovery IFRS 9 and Collections – The 31-Day Time Bomb

IFRS 9 as digital clock display
Apr052017

IFRS 9 may just be a new accounting standard, but accountants aren’t the only people scrambling to meet the January 2018 deadline. If you’re involved with consumer debt in any way, this regulation is going to change your world. (Unless, of course, you’re in the US – the name of the game for you will be CECL.) I recently presented a webinar on how IFRS 9 will impact collections, and in this post I’ll share two changes that will have a massive impact on everyone in debt collection, from in-house collectors to DCAs to debt purchasers. At 31 Days, Everything Changes When accounts roll from Stage 1 (low risk) to Stage 2 (impaired risk), it’s a big deal. 31 days is a hard trigger that sends an account from Stage 1 to Stage 2. Impairment for Stage 1 accounts is 12-month expected credit losses. Impairment for Stage 2 and 3 accounts... [Read More]

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Collections & Recovery Why GDPR Is a Four-Letter Word for Collectors

GDPR logo
Mar202017

Collectors in Europe who have been ignoring GDPR because it was risk’s problem, or the CIO’s problem, or the compliance team’s problem should think again. GDPR could well be a four-letter word for collections. You’re probably familiar with the General Data Protection Regulation, Europe’s attempt to create a single, enforceable standard to protect the freedom and rights of EU citizens. But you might not have thought much about it from a collections perspective. I just presented a webinar on GDPR in collections, so I’ve got an hour’s worth of material if you want to listen to it. However, I’ll keep it brief here and just give you 11 takeaways to ponder: 1. It applies from 25 May 2018. You have a year to get comfortable with it. 2. It’s not just about social media data. That’s how it started, but it broadened into an all-encompassing piece of regulation by the time it... [Read More]

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Collections & Recovery What We Heard When UK Collectors Sat Down

Word balloons with key themes
Feb082017

Last week I sat down with around 20 executives who manage collections for both lenders and debt collection agencies in the UK, to discuss what’s happening in the industry and how analytics — FICO’s specialty — can help. I will discuss my takeaways from this meeting in a separate post, but first I want to share some of the statements made during this meeting. If you ask me, the diversity of opinions in this group, and the participants’ clear desire to improve collections and customer relationships, show how much the industry is changing. This was not your father’s back-room chat on how to squeeze people for cash. This was a group of highly engaged professionals who understand regulations, customer needs and technology as well as anyone in the lending industry. Here are some quotes that should get anyone in the collections industry thinking. Regulation “The FCA is asking, ‘Are we... [Read More]

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Collections & Recovery How Thames Water Cut Bad Debt by 11% in a Year

Thames Water logo
Feb072017

Think of collections and most people think of angry phone calls and repossessed cars and homes. But what happens when you provide an essential service you can’t switch off? That’s the case for Thames Water, the UK’s largest provider of water and wastewater services, which uses technology to increase results. Thames Water has reduced bad debt by 11% in the last 12 months by innovating its collections process using FICO® Debt Manager™ solution. For its achievement, Thames Water has been awarded the FICO Decisions Award for Debt Management. “The introduction of Debt Manager 9 has allowed us to design our treatment strategies from the bottom-up — rather than building strategies to the system limitations, we built them to the business and customer needs,” said Ross Betts, Thames Water’s collections system, strategy & segmentation manager. “This program has been hugely successful, not least because it managed to implement several ambitious goals... [Read More]

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Risk & Compliance Medical Collections Rates Highest for Consumers Aged 24-46

Medical-Collections-by-Age
Jan112017

Since medical costs often increase as we age, one might expect that the rate at which medical bills are unpaid and then sent to collections companies would also increase with age – at least until age 65 when US citizens qualify for Medicare. New FICO research shows that not this not the case. Looking at credit bureau data as of July 2016, medical collections reporting – both paid and unpaid collections greater than $99 – breaks down by age as follows: While the peak of this curve occurs at age 27, the rate of consumers with medical collections is uniformly high for ages 24 to 46. Over a quarter of consumers in that age range have at least one such collection showing on their bureau report. After age 46, we see the rate slowly drop, and as expected, it drops substantially after age 65. Part of the issue stems from... [Read More]

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Collections & Recovery FICO Survey: APAC Consumers Taking Longer To Pay Bills

Dec222016

It’s Christmas time again and apart from the jingling of bells it’s also a time for the juggling of bills. And apparently, that’s getting harder than ever in Asia Pacific. That was the firm message we got from our Asia Pacific collections managers when we polled them about what had been happening with their customer base over 2016. Three in five respondents from banks, telcos, and utilities revealed that their customers have taken longer time to pay their bills in the past year. The 60-days past-due segment has seen the highest growth according to 41 percent of respondents. 72 percent of collections managers also registered an increase in the number of first-time delinquents. This is in keeping with figures out earlier this year from Moody’s that reported household debt in Asia has grown at an average of 13.5 percent a year. Our survey, conducted last month at our FutureCollect event... [Read More]

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Fraud & Security FICO Blogger Scott Zoldi Named to Analytics 50

Analytics 50 award
Oct062016

One of the key contributors to this blog, Dr. Scott Zoldi, has just been named one of the winners of the first Analytics 50 Awards by Drexel University’s LeBow College of Business and CIO.com. The awards program honors 50 executives who are using analytics at their organizations to solve business challenges. Scott, who is FICO’s chief analytics officer, received the award for his leadership in developing new analytic technologies to reduce payment card fraud, by detecting rapidly changing criminal methods. He led the development of a patented adaptive analytics technology and multilayered self-calibrating analytics, deployed in the company’s FICO® Falcon® Platform, which protects 2.6 billion payment cards worldwide. This solution can leverage a client’s fraud experience in near real-time to adjust model weights, without the need for time-consuming off-line training. FICO also created a patented technology called behavior-sorted lists, which identifies an individual cardholder’s specific spending patterns at preferred merchants and... [Read More]

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Analytics & Optimization Video: Protecting Drivers and Toyota with Optimization

Toyota Optimization Video Image
Aug232016

Ever wonder how Toyota Financial Services keeps 10,000 drivers from hurting their credit? When delinquencies spiked after the 2008 financial crisis, Toyota Financial Services realized it needed a markedly different approach to collections. As Jim Bander of Toyota Financial Services explains in the video below, the company turned to FICO prescriptive analytics and optimization, allowing it to become more flexible and scientific about collections decisions. Now, Toyota Financial Services can reach financially strapped customers sooner and have a conversation that makes a difference. The resulting benefits have been numerous, including helping many customers avoid repossession and stay in their cars, and preventing thousands from reaching a stage of delinquency that would affect their credit. For more information on this success story with Toyota Financial Services, read the following blog posts: Toyota Financial Drives “Data Science for Good” with FICO Analytics Toyota FS Wins InformationWeek “Best in Analytics” Award FICO Optimization Helps Toyota Keep... [Read More]

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Analytics & Optimization Toyota Financial Drives “Data Science for Good” with FICO Analytics

Aug022016

An unabashed data geek, I’m fascinated by every facet of analytics and data science, including the growing movement to apply commercial data science techniques for social good. That’s not normally what people think about when the topic turns to debt collection. But using “data science for good” is exactly what Dr. Jim Bander did at Toyota Financial, implementing FICO Decision Management Suite to optimize the automotive lender’s practices, and keep more drivers in their cars and their credit history clean. “We have two core values here at Toyota: respect for people and continuous improvement,” Bander says. “Going into debt collections is a hard time for a lot of people, but our goal is to respect them throughout the process and to keep them as Toyota and Lexus drivers. We want them coming back as future customers.” Continuously improving decision models Toyota Financial began emphasizing collections after the 2008 financial crisis,... [Read More]

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