All posts by Carol Byrne

Collections & Recovery Outsourced Collections – Get Your ROI and ROO


Did you know that almost half of all credit issuers – including banks, telecoms, government agencies, healthcare organizations and other credit issuers — place delinquent debt with third-party collection agencies? It’s easy to see why. Creditors often don’t have the capacity or time to devote to recovery activities. Collection agencies focus on effective data use, and are adept at analyzing, identifying and segmenting consumers as part of the recovery process. They’re focused on the compliance front as well, having faced more headlines and court decisions on this topic in 2015 than ever before, with no slow-down in sight. Larger participants are growing ever larger, and the focus is 24/7 on the consumer. We’re seeing the dynamics within the third-party space change from family-organized to corporately-owned. Mandated audit capabilities are driving collectors to communicate more skillfully in a consultative manner in a variety of channels. The times, they are a-changing. But... [Read More]

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Collections & Recovery In Debt Collection, A Is for Agility

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I could start out today by telling you all about Cabot Credit Management. About how they’re a market leader in debt purchasing, contingency collections, process outsourcing and litigation, supporting 600 users over five sites in the UK and India. Or how recent mergers – with Cabot Financial, Apex Credit Management and Marlin Financial Services – created a long list of complex challenges.  I could mention how growth was accelerating, with plans for additional acquisitions, using different currencies and languages. But forget all that. The theme today is one word:  Agility. Their challenge was how to retire an aging collections platform and become more efficient in their debt collection. How does one align the troops, when many of their staff members were new to this merged environment?  Or keep up with ongoing regulations and requirements from the Financial Conduct Authority?  Historical data and information was uneven and it was hard for... [Read More]

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Collections & Recovery FICO Optimization Helps Toyota Keep Customers in Cars

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In a recent post, my colleague Martin Germanis talked about the importance of optimization in collections. Toyota Financial Services has put this into practice with dramatic results. Toyota’s Collections Treatment Optimization program integrates decision management, reporting and advanced analytics to provide a data-driven, scientific and customer-centric approach to collections. During its first year, the program helped more than 6,000 customers avoid repossession and stay in their cars, and prevented 50,000 customers from reaching a stage of delinquency that would affect their credit. “Working with delinquent customers to keep them in their cars while working out payment options has helped Toyota avoid millions of dollars in losses,” said Jim Bander, national manager for decision science at Toyota Financial Services. “It’s a win for our customers, and a win for Toyota. Furthermore, it reduced our operating expense ratio by allowing Toyota to grow our portfolio by roughly nine percent, without adding collections... [Read More]

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Collections & Recovery Analytics is the Antidote to Collections Complaints – and Much More


As I noted in my last post, for the 23rd consecutive month, the CFPB handled more complaints about debt collection than any other type of complaint.  This represents 31% of complaints submitted in July of this year. Compliance is the single most influential component within collections, and organizations that continually question processes and create strategies that improve the consumer experience – while following the regulations — will succeed. For this group, compliance will serve as the springboard to reducing costs, staff turnover, litigation and legal fees, and lastly, complaints. Compliance will migrate to less of a cost center and more of a business driver. Analytics will play a major role. But many in the industry continue to ignore this powerful tool. The use of analytics, including predictive scores and models for determining account treatment, is much more common in other phases of the credit lifecycle, including origination and account management.... [Read More]

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Collections & Recovery CFPB on Debt Collection: What Consumers are Complaining About


Last month, the CFPB issued the first in a new monthly report focusing on consumer complaints. The report covers complaints by product, state and company, and each issue includes a specific product spotlight and geographic focus. This first report showcases debt collection. Debt collection represents 32% of complaints submitted in June 2015, and this is the 22nd consecutive month the CFPB handled more complaints about debt collection than anything else. The debt collection complaints for June 2015 fall into six categories:   You might be surprised to learn the greatest month-over-month percentage decrease (-4%) came from student loan complaints. What does this mean for members of the accounts receivable management industry? You’re expected to mitigate risk areas. You’re expected to respond to complaints within 15 days and if the complaint can’t be closed within this time period, document work in progress and final resolution within 60 days. Anything done outside... [Read More]

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Collections & Recovery Debt Placement Success Depends on Visibility in Agency Management

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Use of external collection agencies can dramatically improve collection and recovery success, but only if organizations placing debt have deep visibility into, and control over, agency results. Collections staff overseeing debt placements often spend an inordinate amount of time chasing down issues versus completing analyses and making business improvements. And it’s not getting easier. A groundswell of negative press and penalties has altered the course of debt collection and agency placements. First parties need to increase their visibility into the information and actions taking place at agencies working their debt. The benefits of what third parties deliver haven’t gone away – scalability and better performance for less cost – but first-party accountability for the vendors they engage has increased. Only when full visibility is available over the entire operational process can risk be mitigated and full performance achieved. It helps with forecasting recovery cash flow, too. How can you predict... [Read More]

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Collections & Recovery How Smart Government Agencies Collect More Debt (Video)

Collections video leader

Declining revenues, customers who won’t pay, overworked collectors — government agencies face the same challenges as anyone else collecting debt.  One agency that found a good solution is Shelby County, Tennessee. As Debra Gates, chief administrative officer for Shelby County Trustee, explains in this video, the department decided to close a revenue shortfall not by raising taxes but by going after accounts receivable. “The reason that we chose FICO was, first of all, their experience with government,” Gates says. The flexibility and open architecture of FICO Debt Manager were also important points.” And the results? “During the first 120 days of our collection activity for 2013, we collected an additional $6 million, which was about 80 basis points above what we’d collected in prior years,” Gates says. “The employees have really bought into FICO Debt Manager. It has made our staff more efficient and more effective at what they do,... [Read More]

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Collections & Recovery Is a Great Debt Collection Experience an Oxymoron?

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Debt collection is at the intersection of two very popular news stories: the continuing shift of global wealth, and the rise of customer experience as the defining characteristic of successful companies. Here’s where debt collection comes in. While the world’s richest are getting richer, many consumers have not. Many formerly affluent and middle-class people are struggling financially.  Many of them are, for the first time, finding it a serious challenge to make timely payments on debt obligations. Still, consumers expect every experience to be a great one – including collection efforts. Banks and other credit issuers have gone to extraordinary lengths to create mobile apps that let customers deposit checks with just a photo, have enabled ApplePay, and more. Card providers alert consumers with a text message when they suspect a fraudulent transaction. Consumers love it. So why do so many debt collection efforts consist of calls from an automated... [Read More]

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Collections & Recovery Debt Collectors: Don’t Overlook Vicarious Liability


What was the most important debt collection issue for you in 2014? The most common answer to this question is compliance. It holds top-of-mind awareness for the majority of debt management professionals across all markets, from both first and third party organizations collecting debt. One of the most interesting conversations I heard on this topic took place on at the end of the year, when David Kaminski, partner at Carlson & Messer LLP, spoke at a webinar presented by Collections and Credit Risk and FICO.  David specializes in defending banks, collection agencies and creditors in all areas of financial services litigation, and is a recognized authority regarding consumer litigation laws. He routinely defends clients in investigations and proceedings initiated by the CFPB, FTC and FCC, as well as other federal, state and regulatory agencies. When asked what issue or topic he sees as most important from a compliance standpoint, David... [Read More]

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Collections & Recovery Your Collections Message — If It’s Long, It’s Wrong

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Let’s say you’ve sent a customer who is behind on their payments one or two reminders and have gotten no response. It seems the customer just isn’t getting the message. If the debt’s been charged off, this situation becomes more prolonged, expensive and serious. Whether it’s a collection or recovery effort, the fact remains: You’re being ignored. So what do you do? Talk louder? Communicate more frequently? Use more channels? Any seasoned collector will tell you this doesn’t always work. In addition, regulators such as the Consumer Financial Protection Bureau (CFPB) are looking to identify any collection efforts that don’t fall within regulatory guidelines. Despite the fact that people are more likely to read and respond to short messages, regulations and the need to clearly state the case to overdue borrowers means that messages are getting longer — often much longer. One organization taking a different approach is Lloyds Bank.... [Read More]

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