How to Be an Effective Collector
Tips for new collectors, and reminders for the veterans
A professional collector’s day is a grueling one. It’s eight hours of listening to debtors’ problems, complaints, and excuses; dealing with management’s demands for “faster and more”; and essentially, asking everyone you talk to for money. What collections does offer is a potentially lucrative bonus check at the end of the month (depending on the employer), a job that is always in high demand, and a position that doesn’t usually require a college degree.
So, now that you’re a collector, how do you achieve management’s promises of Golden Bonus Checks and random merchandise given to you as incentive for your hard work? Below are some basic rules and tips that can boost your “receivable management” skills and get you into the top collection seat.
Know Your Product
Inside and out. Up, down, and across. Above and beyond. There is no excuse to not know everything about the thing you’re collecting on, whether it be credit cards, student loans, mortgages, or furniture. Within each collection niche there are loads of rules, laws, and intricacies that surround the product. Knowing about them will help you devise your own collection patter (or talk-off), answer any questions the debtor has, and give you the edge that you need to succeed. Learn the legal side of collections. A common debtor question is “What will happen if I don’t pay?” Know the answers. If you can explain the legal consequences of non-payment, you’ll have a very compelling reason why someone should pay you – today.
{} WANT to Collect
There is no reason to go through the stress and frustration of a collector unless you commit to collecting. That means having a potentially uncomfortable conversations about finances, personal issues, and excuses with up to 100 people a day. You need to resolve yourself to a simple fact – people owe money, and you need to get it from them. If you are not comfortable with collecting valid debts from people, than it’s not worth becoming a collector.
Understand the Situation
Once you have your target on the phone, you want to make every moment count. This may be the last time you speak to the debtor. You may only have one shot. Look at the history of the account. How many calls were placed before this one? Who did you speak to in the past? Are there unresolved disputes, and are they really related to the debt? How long has the debt been outstanding? There is no room for passiveness when on a call with a debtor. Take the time to profile the account (get a broad picture of the situation), and be able to build on prior conversations, instead of rehashing the same things time after time.
Communicate
Communication is a two-way street. Ask questions, and LISTEN to the responses. People don’t always tell the truth, but an experienced collector can usually pick up on verbal clues to be able to challenge the debtor and obtain factual information. “The check is in the mail” is a common clichÃ?©, but it’s still being used, and it’s still being believed. Find out the Who What Where When and How. If you are not sure of how and when you’re getting your money, and the Reason for Default (RFD), then ask more questions. If you are unsure of how the debtor is getting the money to pay you, then ask more questions. Remember that a debtor’s responsibility is to give you the answers to the questions. They disclosed that information when applying for the debt, and they need to give it to you in order to rectify it.
{} Empathize
Do not sympathize. Understand the debtor’s situation, but don’t let that be an excuse for non-payment. Many people fall on hard times, and are unable to pay their bills. Some stories may make you want to cry. But, at the end of the day, you need to collect the money. Don’t be afraid to offer a kind word, but don’t end the conversation there. “I feel awful that Fluffy was injured in a yoga accident Mrs. Smith, but we need to talk about your past due mortgage.” Above all, realize that you’re speaking to a person, not a disembodied voice, and people have issues and problems that arise. People want to be respected, and will respond much more favorably to professionalism than to an angry voice and threats.
Don’t Ask – Tell
The worst thing a collector can say is “Can you send in any money now?” You know the answer already. “When can you send that money in?” Later. The answer will always be “Later”. A collector needs to dictate terms and times of payment according to the guidelines of the employer or client. This should be done after a thorough discussion about RFD, assets, income, and the present situation of the debtor. Once a collector has the facts, they should be able to assess the situation and lay down a repayment plan. Since the collector is the expert, they should be able to walk the debtor through the repayment scenario, make them believe in it, show the debtor how repayment really is the best option, and let them know exactly the steps to take, even giving them directions to the local Western Union if necessary. This gives the debtor peace of mind, clear direction, and something they may not have had in a while – a plan.
{} Explain Urgency
“Why should I send it today?” As a collector, you should prepare for that question. Know the answer. “Because your debt has been overdue since ___, and my company is now demanding it in full. Otherwise (and use this one carefully) collections efforts will continue.” As a collector, you need the payment to reach a goal, or hit your quota, or to appease your ill-tempered supervisor. NEVER say that to a debtor. Give them the reason why it’s in THEIR best interest to send it. Interest penalties, legal fees, and continued calls and letters are excellent motivators to get a debtor to comply with a repayment plan.
Follow Up
Assuming you laid out a flawless repayment plan, follow up should be easy. Calling the day a payment is due is fair game. You have every right to make sure your company’s money will arrive on a mutually agreed upon day. If a payment does not arrive on the day, place a call the day after. Never let a missed payment go without a call. If you don’t have urgency, why should the debtor? Make sure the debtor knows that any partial payment plans are null and void after a missed payment, and the entire amount can be called due. This is the time to call out the heavy guns of Consequences and remind the debtor what could happen if no payments are received. No more Mr. Nice Company.
Quick Tips:
– Stay calm: Professionalism is expected and required at most companies. The Fair Debt Collections and Practices Act (FDCPA) disallows verbal harassment, and so should your conscience.
– Be the Expert: Know what’s going on, and what to do next. Your confidence in your own knowledge and in yourself will inspire trust, and give you an edge in the conversation.
– Know Everything: (or find out the answer) DON’T make up facts just to sound like a professional. It will come back to bite you when you least expect it. You never know when the Jane Jones you’re talking to is actually Atty. Jones.
– Care: Do the right thing at all times. Respect disputes, and handle them correctly and properly. Want debtors to succeed, and take pride in helping people overcome their bad position.
– Respect the Debtor: “Sir” and “Ma’am” the debtor until it hurts. At a time when a person may not feel great about them self, show them that they have your respect. They are potentially customers down the road.
– Be Firm: Wishy-washy people don’t get respected or get listened to.
– Don’t Lie: EVER. It’s not worth it.
– Follow the Law: ALWAYS. It’s not worth not doing it.
– Follow your Morals: Don’t do something you know or think is wrong. Bring up issues to management. They’ll either agree with you and fix it, or let you go. Both are better options than going against your beliefs.
– Be Pleasant: When the only connection you have to someone is your voice, you need to make it comfortable and pleasant to listen to. No monotone, yelling (check your headset volume), or distracted-sounding voice. Don’t do crossword puzzles while talking to a debtor, or eat chips while on the phone. It’s just good manners.
– Treat people how you want your grandmother to be treated – you’ll never go wrong.
Follow these rules, and you’ll be on your way to collection success. Remember to ABC: Always Be Collecting.
