SAN JOSE, Calif.—September 11, 2014 —Contrary to popular belief, the kinder, gentler approach to debt collection usually turns out to be the smartest. A new infographic from FICO (NYSE:FICO), a leading predictive analytics and decision management software company, shows why many collectors are replacing challenging calls with friendlier, automated contact.
The FICO infographic, The Customer-Centric Collector Rises, illustrates the challenges facing debt managers today. Some 35 percent of US adults with a credit file have debt in collections. About 20 percent of delinquent debt is collected, down from 30 percent a few decades ago. And some collectors’ tough tactics generated 200,000 complaints to federal agencies last year, which is one reason why the Consumer Financial Protection Bureau has stepped in to protect consumers.
Collectors seeking better relationships with debtors — and to increase the amounts collected — are turning to automated contact systems that let people pay by text message, set up payment plans online and respond to recorded voices, rather than interacting with live collectors. According to FICO research, 30 percent fewer people feel the need to speak to a collector when an automated phone call or text has a friendlier message and tone. This, in turn, improves both response rates and collector productivity. In addition, 11 percent more debtors will make a payment immediately when contacted by friendly, automated systems, and 80 percent more are prepared to set up a direct debit plan.
“Respect and understanding are the keys to success for collections,” said David Lightfoot, who oversees FICO’s debt management solutions. “That means using a respectful tone, complying with the latest regulations, knowing the debtor’s situation in detail and having an accurate record of past payments, problems and promises. The mindset that overdue debtors are ‘deadbeats’ has long been outmoded.”
FICO is at the forefront of customer-centric collections. FICO® Debt Manager™ Solution, the company’s end-to-end, cloud-based collections system, is integrated with FICO® Risk Intervention Manager, which enables collectors to connect with customers over the right channel—whether mobile, voice, SMS, or email—at the right time to drive resolution.
For more information on customer-centric collections, see FICO’s white paper on “Taking Your Collections Performance to the Top” at www.fico.com/be-a-superhero.
FICO (NYSE: FICO) is a leading analytics software company, helping businesses in 90+ countries make better decisions that drive higher levels of growth, profitability and customer satisfaction. The company’s groundbreaking use of Big Data and mathematical algorithms to predict consumer behavior has transformed entire industries. FICO provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations. Many of our products reach industry-wide adoption. These include the FICO® Score, the standard measure of consumer credit risk in the United States. FICO solutions leverage open-source standards and cloud computing to maximize flexibility, speed deployment and reduce costs. The company also helps millions of people manage their personal credit health. FICO: Make every decision count™. Learn more at www.fico.com.
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