When it comes to government debt collections, having the right account work strategy out of the gate is the difference between marked success and utter failure. While there is an abundance of opportunity in the government debt collection vertical, it is important to ensure the debt collection agency has adequate experience in working government debt. One of the biggest mistakes made relating to working government debt is thinking it can be handled like standard consumer debt; it can’t. Understanding the intricacies of various types of government debt relating to the local, state, and federal level is very important as well.
If you have successful experience with government debt collection then you ultimately have an advantage on even the most seasoned debt collector without it. For those without experience in government debt collection, the importance of spending time researching and developing an account work strategy customized and focused to the specifics of the government debt collection project can’t be overstated. While some may say all debt is created equal, how that debt is collected may not necessarily be. Therefore, an approach clearly outlining the plan and measurables prior to engaging in the first call will pay large dividends.
Location Identification
From an operational standpoint, one of the most singular important elements in the development of a successful account work strategy with government debt collection is location identification methods. A lot of government debt comes with little to no demographic information and the limited demographic information is also hampered by inaccuracies as well, which makes identifying the individual being collected from even more difficult. It is imperative to develop sophisticated and systemic processes which assess the provided account location information and develop new location information for those accounts in which it is inaccurate or missing.
Confirm Data Accuracy
The next step is to confirm the accuracy of the data on the accounts. New technology is available to assist debt collectors in confirming the accuracy of addresses and phone numbers as it relates to the individual from which they are attempting to collect. Match point data looks at various elements with the individual demographic information and combines available phone company records along with address matching to help debt collectors determine the probability of the contact information belonging to the individual for which they are looking. Traditional skip-tracing methods tend to focus solely on providing multiple possible phone numbers and addresses for the individual. While still valuable and needed, it should be mirrored in importance of returning accurate contact information as well.
Account Segmentation
Since government debt is primarily not credit-based in the traditional sense, using non-traditional scoring methods will assist in appropriate segmentation. Proper account segmentation is very critical with government debt, especially when dealing with substantial account volume. Where credit-based, propensity-topay scores might not be as useful, demographic-based scoring models which consider nonpersonal credit factors may be more beneficial. Regardless of the chosen method of segmentation some form should be utilized to assist in determining a solid account work strategy to focus on those accounts with the highest probability to establish contact and ultimately repay.
In the end, working in the government debt collection vertical can be feast or famine. So much of that determination can be attributed to the onboarding of the project(s) and how well the initial plan was prepared and executed. While in some instances agencies have succeeded in this market after first experiencing failure, most agencies simply are not able to overcome an inability to get out of the box on the right foot at the onset. When it comes to working government debt, just remember that more important than working the accounts, is understanding how the accounts will be worked.
Nick Jarman is COO at Delta Outsource Group, Inc. He also serves on the Board of Directors for ACA International.