Collections Best Practices

Print or Stamp "Address Service Requested" on Direct Mail to Obtain Updated Customer Addresses

Best Practice (Good)

Print or stamp "Address Service Requested" on any direct mail (typically on statements or invoices) sent to delinquent customers who have moved without informing the company before committing to the use of a skiptracer. This not only has the potential to save the company money, but it helps keep address files up-to-date without the need to wait (potentially forever) for recalcitrant delinquent customers to contact the company.

Typical Practice (Bad)

Use skiptracers and increase the use (within guidelines determined by law) of other contact platforms (i.e., phone calls, emails, etc.), if a delinquent customer has moved without informing the company of their new whereabouts. If delinquent customers do not voluntarily provide you with their new address a reasonable time after any warnings or information acquisition attempts are issued, skiptracer investigations should be relied upon to provide the necessary information.

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Benefits:

One of the most difficult collection problems out there involves tracking down a delinquent customer who has "skipped" (i.e., moved without informing the company of their new address). Instead of immediately turning to a skiptracer, which can cost a pretty penny, and increasing contact attempts (which can be perceived as harassment by customers), businesses should take advantage of a special service offered by the Post Office. If a statement or invoice is sent to a customer who has moved without informing the company, print or stamp "Address Service Requested" on the envelope. Once the Post Office sees those words, they will research this information and return the envelop to the company with a yellow sticker that gives the new address or other updated information. If the customer has placed a "forwarding order" with the Post Office, the Post Office is required to forward the envelope to the customer and give the company form #3547 with the new address (the Post Office, in this instance, will charge the company approximately 50 cents). Such a practice has the potential to not only save the company money, but it helps keep address files up-to-date without having to rely on recalcitrant delinquent customers.

Develop an FAQ Manual that Answers Common Drivers of Collections-Based Issues to Improve Customer Experience

Best Practice (Good)

Enhance or develop an easily searchable collections-focused frequently asked question (FAQ) manual to provide answers to the top drivers of collection-based issues/reasons/resolutions segmented by specific products, services or lines of business (typically includes payment disputes, etc.). Ensure that collections employees have easy access to FAQ manuals presented within online knowledge bases (online portals, Intranet based resources, etc.) so as to impose set standards for all written procedures and policies for collection activities.

Typical Practice (Bad)

Provide each collections employee with a standardized physical checklist that has clear and concise responses to the most frequently experienced customer attitudes, problems, or needs. Ensure that any issues collections employees are unable to resolve are quickly escalated to the most available manager, subject-matter expert or escalation representative within the Collections Department to ensure efficient and satisfactory issue resolution.

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Benefits:

Developing and/or enhancing easily accessible FAQ manuals reduces call handling times and first call resolution rates by providing answers to the top drivers of collection-based issues/reasons/resolutions segmented by specific products, services or lines of business (typically includes payment disputes, etc.). By distributing the FAQ through online resources (the organization's online portal, Intranet-based resources, etc.) management is able to ensure that collection employees are kept up-to-date on standards for all written procedures and policies for collection activities. Furthermore, by setting standards for collection employee responses to certain types of customer attitudes, problems or needs, managers, subject-matter experts and escalation representatives working within the Collections Department are freed up to work on higher-valued tasks.

Implement an Online Collections Self-Service Program to Improve Customer Experience

Best Practice (Good)

Develop and implement an online collections self-service program, which enables customers to research their collections options, interact with the Collections Department and monitor their payments. Work with delinquent customers to make it easier for them to pay back loans (this can include adjustments in interest rates, loan lengths, payment installments, loan terms, etc.) and inform them to seek free or low-cost consumer credit counseling services.

Typical Practice (Bad)

Periodically contact delinquent customers (through email, phone calls, etc.), taking priority levels into account (i.e., accounts nearer to default should get more frequent calls, etc.), in order to obtain the amounts owed to the company. Ensure that customers are provided with all relevant information (i.e., collections options, payment status, etc.) only upon contact.

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Benefits:

The implementation of an online collections self-service program not only provides customers the ability to interact with the Collections Department on their own time, but it also frees up collections employees to perform other tasks (such as contacting delinquent customers who are on the cusp of default). Such online services, furthermore, allows customers to research their collections options and work with numerous parties (i.e., the Collections Department, a third-party consumer credit counseling service provider, etc.) in a low-stress environment to figure out how to best pay back what they owe before their delinquent account is considered defaulted.