Debt Collection & Recovery
As government organizations resume collections, and collection agencies are permitted to resume collection activities, organizations will need to determine their “ramp up” strategy. Instead of immediately rushing to heavy-handed collection activities, they will need to think through a stepped approach to reach out to consumers, and try to re-engage them in re-payment. This will include reminding them about the consequences of not entering a re-payment plan if initial actions do not have a positive result.
Pushing too hard and too fast in the collection process will have negative implications for both consumers as well as the debt holders who could face negative pushback. Strategies that provide flexible options for re-payment, including deferrals where permitted, are much more likely to result in positive outcomes. In addition, through analytics organizations can focus their energies on the most collectable cases, where the consumer can afford some level of re-payment.
There are many lessons we can take from the past economic downturns as we think about what collections will look like going forward. Not all consumers are the same and collection strategies need to be varied. Many people are out of work, or otherwise financially distressed, and won’t be able to make repayment immediately. Some consumers wouldn’t owe money, but for the pandemic.
As collections begins to ramp up, organizations will be faced with more accounts than ever, and due to work-from-home or social distancing restrictions, may be required to collect those cases with fewer staff per account.
This is the time for new tools, new strategies, and new approaches to customer service in order to be successful. Challenges create opportunities, and opportunities can lead to innovative thinking and approaches.