Collectors have been searching for a softer collection method for decades. Many have been false promises. Virtual collections debuted with great promise in 2006. It has taken 10 years to show effectiveness. I saw a new hopeful solution to soft collections this past year at annual conventions for DBA International, ACA International and ACA of Texas. A few new companies and one well-known company offered email and text messaging to remind customers of payments due. This method is gaining ground when servicing first party accounts, and with proper permissions is utilized by early adopter third party agencies as well.
When the TCPA rule from telemarketing was applied to collection calls a huge groan could be heard from sensible business people. Now, after several years of obtaining permissions to use cell phones and email messages as collection reminders, the process is beginning to make sense again. This comes at a good time. Several countries use cell phones predominantly. The U.S. is following suit. According to industry veteran, Rob Fite, “50% have mobile phones instead of landlines and 94% of households have mobile phones.” Fite spent significant time with FICO and LexisNexis. Fite says, “75% have smartphones, which means web access to a payment portal.” This enables sending a test message to a customer so they may self-cure their debt.
Speaking of London Bridge, I ran into Jim Crawford, from London Bridge software before it was acquired by FICO. Crawford has joined VoApps, which is another TCPA solution gaining traction. The VoApps product drops the collection call phone number on a voice mailbox, which does not reside on a cell phone. Customers then return the call. What was considered controversial has gained traction and imitators have begun to pop up.
Call recording and call analytics are advancing to the point where the system can understand the debtors comments and “suggest the next statement a collector should make,” according to Anne Pacifico with Castel Communications. When compliance auditors arrive, you are able to show how a collector deals with a situation, and even, “provide a real-time score of a call,” says Pacifico.
Electronic payment is an essential tool for collections. Even though NACHA approved one-day settlement for ACH payments, it will only speed up payroll this year. “ACH may not improve other payments until 2018,” according to Dave Yohe, VP at Billing Tree. Every couple of years some agencies lose their ability to process payments because of a decision made by a payment vendor or payment portal. A solution to this is to work with a payment processor who is, “settlement agnostic and can settle with almost any acquirer,” according to Autoscribe CEO Rob Pollin. The problem of companies being denied payments for arbitrary reasons, sometimes referred to as operation chokepoint, appears to have ended, or as Pollin noted, “what only theoretically existed is not over.”
A fascinating application was demonstrated by Albert Rookard, president of Applied Innovation. PayStreamZ enables debtors to settle debts and pay the fee themselves. Because the amounts are paid separately, the dollars received are whole dollars and not dollars discounted by 3% or more for credit card transaction fees. Applied Innovation also presented a portal where debtors could negotiate payment amounts online.
It has been said that the basis of philosophy before and after Socrates has been “know thyself.” The bottom line on electronic payments and all facets of collection technology is know thy vendor. I received a handling fee for paying a vendor (Guru.com) in the UK out of my cash account recently. These charges were never agreed to or authorized by me. For 36 hours they made no payment at all to a vendor waiting to be paid. They essentially held me hostage until I added money from Paypal. After placing several phone calls and sending emails, no one ever responded. I was disturbed to find the same danger among collection vendors. There are reps at tradeshows, there are websites, but there is no person responsible there. They have no address, no phone number and no officer of the company you can speak with if a problem arises. I looked up a couple at the Secretary of State websites where they purported to be located and they weren’t there either.
Collections needs the highest caliber collection technology vendor. Collection Advisor continues to only cover companies where a responsible party is accessible. Text collecting and payments enhances collections just make sure you know with whom you are dealing.