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Personal Credit Collection Process

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Personal Credit Collection Process Powered By Docstoc
					Cornerstone Credit
  Services, LLC
INTRODUCTION TO
COLLECTION
MANAGEMENT
SEMINAR
Goals of the Seminar
• Improve efficiency

• Improve collection knowledge

• Improve relationships

• Improve the bottom line
Cornerstone Credit Services, LLC
•   Professional Collections
•   Skiptracing
•   Legal Options
•   Credit Bureau Reporting
•   Check Verification
Technology
•   Voice Information Center
•   Predictive Dialer
•   Footprint
•   FastCheck 2000
•   Check by Phone
Payment Statistics
           Consumer Trends

• In the last 5 years,
  approximately 65 % of
  Anchorage residents
  moved locally.
  – Approximately 32,000
    people moved within
    the Anchorage area.
  – Nearly 10,000
    residents move within
    the state.
           Consumer Trends
• In the last year, approximately 17% moved or
  changed residence nationally.
• In Alaska, almost 8,000 residents move to a
  different state
• Approximately 1,500 move overseas
             Why People Move
•   Housing reasons
•   Marriage or Divorce
•   Birth of Children
•   Financially Motivated or New Job Offers
•   Corporate or Military Transfers
•   Closer to Relatives
•   Different Climate
 Fair Debt Collection Practices Act
               Enacted March 20, 1978

        Findings
Abundant evidence of the
use of abusive, deceptive,
and unfair collection
practices.
  Fair Debt Collection Practices Act
                Enacted March 20, 1978


• These practices
  contribute to the
  number of personal
  bankruptcies, marital
  instability, loss of
  jobs, and the invasions
  of individual privacy.
  Fair Debt Collection Practices Act


          Purpose
To eliminate abusive debt
   collection practices by debt
   collectors.
To insure that those debt collectors
   who refrain from using abusive
   debt collection practices are not
   competitively disadvantaged.
To promote consistent State action
   to protect consumers against
   debt collection abuses.
Fair Debt Collection Practices Act
           Provisions
                  Skiptracing
                      (Sec. 804)
• Locating people
• Correcting & confirming
  information
• Collector may
  communicate once with
  any 3rd party:
      -Relative
      -Employer
      -Landlord
      -Neighbor
          Communications
                   (Sec. 805)




• The collector may communicate with the
  debtor/consumer between 8:00 am & 9:00 pm
  local time of the debtor.
             Communications
                        (Sec. 805)

• The collector may communicate with the debtor at work,
  except when the collector knows or has reason to know
  that the employer prohibits such communication, or when
  the debtor requests no contact.
Communications
    (Sec. 805)

          • The debtor must
            communicate in
            writing if they refuse
            to pay or wants
            communication to
            stop.
          • *CCS honors a verbal
            request
           Communications
                            (Sec. 805)

• Cannot contact via post card
• Cannot contact using any form of mail with
  company emblems or logos
• Cannot contact third party if debtor has an
  attorney.
               Cornerstone
               Credit Services
                  Harassment
                       (Sec. 806)

• A collector may not
  harass, oppress or abuse
  a debtor in any way not
  specifically mentioned in
  the law.
• May not use or threaten
  to use violence or other
  criminal means to harm
  the physical person,
  reputation, or property
  of any person.
             Harassment
                     (Sec. 806)


• May not publish a list
  of names
• May not call over &
  over to annoy or let
  the phone ring
  excessively
• May not call without
  meaningful disclosure
  of caller’s ID
Misleading Representations
              (Sec. 807)

                   Collectors may not use any false
                     or deceptive representations
                     when collecting debts. For
                     example:
                   • Cannot express that you
                     represent the US holding a
     US              badge / uniform.
   MARSHALL        • Cannot misrepresent the
                     debtor’s character, amount
                     owed, or legal status.
  Misleading Representations
                      (Sec. 807)


• Cannot say that you are an
  attorney.

• Cannot imply imprisonment,
  garnishment, or litigation
  when not intended.
     Misleading Representations
                         (Sec. 807)

• Cannot threaten action that can’t legally be taken.
• Cannot imply that a crime has been committed.
• Cannot threaten credit damage when debt is disputed.
     Misleading Representations
                        (Sec. 807)



• Cannot distribute false
  documents that create
  false impressions.
• Cannot say that you’re
  somebody you aren’t to
  get extra information
  (deceptive means).
• Cannot use a business
  name other than your own.
                  Unfair Practices
                              (Sec. 808)

It is unfair to do the
   following:
• To collect money that is not
  agreed to or permitted by law
  (interest, late fees, collection
  charges).
• To take a post-dated check
  and not follow the
  requirements.
• To ask for a post-dated check
  to threaten criminal charges.
• To threaten early deposit of a
  post-dated check.
              Unfair Practices
                       (Sec. 808)

• To make collect phone
  calls.
• To threaten to take
  property through non-
  judicial means.
• To communicate via post
  card.
• To use language or
  symbols that
  communicates “debt
  collector.”
Validation of Debt
      (Sec. 809)

            • Must send a notice
              within 5 days of initial
              communication.

            • Must send a validation
              within 30 days if debt
              is disputed.
Validation of Debt
      (Sec. 809)

            The following is necessary
              to validate a debt:
            •   The amount owed.
            •   The creditor.
            •   The statement of services.
            •   The name & address of the
                original creditor if
                requested.
    Penalties for Violating the
             FDCPA

• Fine up to $1,000
  plus actual damages

• Class Action
  Lawsuits
           Identifying Bad Debt
A. Obvious Indicators
1. Mail Return            RETURN TO SENDER




2. Disconnected / Wrong
   Phone Number
Identifying Bad Debt
          B. Not-So Obvious
            Indicators
            1. Slow paying
            2. Financially
            Immature (denies
            responsibility)
          Identifying Bad Debt
3. Unfounded
   complaints about
   service.
4. Screens phone calls.
5. Doesn’t return phone
   calls.
6. Post-dated checks.
7. Bounced Checks.
               In-House Policies
A. Greet / Acknowledge
  Customer

B. Acquire Complete
  Customer Information
   1. Full or Legal Name
   2.   Mailing Address
   3.   Phone Number
   4.   Social Security Number
   5.   Employment Information
   6.   Emergency Contacts
              In-House Policies
7. Name of Referral
8. Keep Information
  Current
   – First time of service
   – Upgrade at each contact

*Never assume that
  information is always
  current.
In-House Policies
         C. Financial Policy
         Define payment
           expectations -
         • Payment in full at time
           of service.
         • Monthly payment
           arrangements.
         • Special arrangements.
              In-House Policies

4. At the time of payment:
 -Maintain the dignity and
  satisfaction of your
  customers.

-Assume your customer has
  the money and be positive.

-Define customer expectations
  regarding their debts.
In-House Policies
         • Be simple in dialogue; get
           feedback.
         • Respond in a non-defensive
           manner.
         • Work with appropriate staff
           to ensure that problems are
           resolved quickly.
         • Treat customers with
           courtesy.
                 In-House Policies
D. Billing
  1. Establish a system
      a. Statement at time of service.
      b. Monthly statement.
      c. Final notice.
      d. Consider adding “Address
  Service Requested” on envelopes.
              In-House Policies
D. Billing
  2. Enhance system
  performance.
       a. Be consistent with
  staff.
      b. Return calls and
  requests ASAP.
      c. Stay on schedule.
      d. Provide accurate
  information.
             In-House Policies
E. Collections
1. Determine the past
  due cut-off
a. Critical review point is
   0-90 days
b. The older the account,
   the more difficult it is
   to collect.
                  In-House Policies
E. Collections
  2. Seven steps to a
  collection call:
      a. Identify the responsible party.
      b. Identify yourself.
      c. Identify your business.
      d. “Demand” balance / listen.
      e. Upgrade information.
      f. Make arrangements.
      g. Close the call.
         In-House Policies

E. Collections

 3. Referring accounts
 to collections
  a. Be timely
  b. Be consistent
             In-House Policies
F. Communication
1. Smile (set the tone).
2. Name (personalize).
3. Ask “May I help you?”
4. Parting comment
  (“Take Care”)
            Did you know?...
• 70% of all complaints
  come from a lack of
  communication.

• The root of most
  complaints is not
  meeting expectations.
           SUMMARY
•   IMPROVE EFFICIENCY
•   IMPROVE COLLECTION KNOWLEDGE
•   IMPROVE RELATIONSHIPS
•   IMPROVE BOTTOM LINE

				
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