Auto loan delinquency rates are at the highest level since the 2007 financial crisis, which is why auto lenders are investing more time in debt collection best practices. As such, refining and bolstering training for debt collectors has become increasingly important.
Auto Finance News spoke with a few experts in the field about tips for training debt collectors. Here are three best practices:
1. Educate Collectors on Compliance Issues
A qualified debt collector should — first and foremost — be familiar with debt collection rules and regulations, said Brad Emerson, president of CAC Services, a debt collection company based in Irvine, Calif. Therefore, it is important to educate debt collectors about compliance issues before they start the practice. For example, the Fair Debt Collection Practices Act (FDCPA) — a federal law that provides limitations on what debt collectors can do when collecting certain types of debt — is something debt collectors should always keep in mind, he said. In light of the law, debt collectors should protect debtors’ confidentiality and never disclose the existence of debts to others who are not authorized to know about the debts. These concerns should be addressed during the training.
2. Continually Monitor Collectors for Quality and Efficiency
CAC Services quizzes its agents quarterly to assess their understanding of debt collection, Emerson said. The company also gives out new assignments from time to time to test debt collectors.
“We offer one-on-one debt collection services to auto lenders,” he said. “Therefore, we require our agents to have an in-depth knowledge of our customers as well as the debtors in order to carry out the tasks properly.”
It is important for lenders to “continually” train staff members, monitor call quality, and ensure collectors are licensed in the individual states and are “abreast of their policies,” said Brandy Bissett, business process outsourcing services product manager at Fiserv. Many associates at Fiserv have transferred from customer services to debt collection services, so they are already familiar with using a friendly, customer-service approach to deal with debtors.
Fiserv trains debt collectors “professionally,” Bissett said, and all Fiserv agents are licensed. The training usually lasts two weeks. Fiserv uses automated dialers — a combination of humans and artificial intelligence — for debt collections, which is commonplace in the realm of customer service.
“Transition staff members [who are] performing well in certain areas to tougher accounts and portfolio,” Bissett said. “If staffing is an issue, leveraging outsourcing services that specialize in collection strategies and loss mitigation is beneficial,” she added.
3. Work to Enhance Their Communication Skills
Among all channels of communications, a one-on-one, interpersonal conversation with debtors proves to be the most effective, Emerson said. Therefore, he encourages auto lenders to aim at improving debt collectors’ interpersonal communication techniques during training. CAC Services, for example, offers field contacts — such as “door knocks” and “delinquency interviews” — for debt collection services, Emerson said.
Instructors should always be aware that collection is a “practice act” and that training debt collectors’ behaviors is crucial, he said. Debtors will be contacted only when he or she has been receiving late notices and phone calls for a while; therefore, it is important to remind debt collectors not to use brash language when talking to debtors.Like This Post