Author: Cali Thompson

Who’s on First (and Who’s on Third) for Your Debt Collection?

By on September 1st, 2022 in Customer Experience, Industry Insights, Product and Technology, User Experience

What is your core business? It probably isn’t chasing down delinquent accounts—and it shouldn’t be. Attention, resources, and bandwidth should be dedicated to what drives revenue and pushes your company’s goals forward.

But delinquencies are a reality for any business that handles payments. And when a customer misses a payment on the due date, you shouldn’t let their delinquency slide for too long, otherwise before you know it, that delinquent account will eventually get charged off and considered a loss.

While charge offs aren’t completely unavoidable, ineffective recovery efforts on those defaulted, post-charge off accounts (typically handled by a third-party partner) are completely avoidable. Effective pre-charge off (also known as first-party) collection efforts are just as important as well. For today’s consumers, that means engaging with them in more innovative ways outside the traditional call-and-collect methods and moving into a more digital approach.

But without a consumer-centric strategy for both pre- and post-charge off accounts, digital outreach can stumble just as easily as an inexperienced call center rep on their first day—ineffective or even damaging to customer relations.

So what do effective strategies look like for first-party and for third-party debt collection? Let’s first take a look at the nuances to consider between first-party and third-party collections.

First-Party vs Third-Party Collections—What’s the Difference?

First-Party
First-party refers to using the creditor’s brand in customer communications. The focus is on remediation of newly delinquent accounts and getting the customer back on track. The communications address the part of the loan that is late, which is often not the whole amount, and refer the customers back to the creditor’s call center, payment portal, or online account system.

Third-Party
Third-party refers to outsourcing collections through a third-party partner on the entire balance of the account. At this point, many creditors believe the customer relationship has been lost—but this does not have to be the case with the right digital strategy!

First or Third—Customer Engagement is Key to a Homerun in Collections
For both first- and third-party collections, success hangs on reaching each customer with the right message, through the right channel at the right time. This can be no small feat for smaller in-house teams attempting to recoup pre-charge off debts. And how can you trust that your third-party partner is actually engaging with customers in the best way possible?

So Who’s on First and Who’s on Third for Your Debt Collection?

It may seem like a silly question: who is on top of your first-party, early delinquency collection communications? Many companies assume that they must handle pre-charge off collection efforts completely by themselves or by outsourcing with a first-party company, but there are communication alternatives such as TrueAccord’s Retain. Retain is the client-branded pre-charge off digital engagement product, directing customers back to you enabling your customers to choose the right time, place and channel to contact you. Improve your cash flow, reducing losses and allowing you to spend more time and energy on core business objectives.

Learn more about first-party communications, including the top 10 questions to evaluate your current strategy, in our new eBook the Buyer’s Guide to Digitally Engage Your Past-Due Customers»»

While third-party, post-charge off collections may feel more “out of sight, out of mind” than first-party since organizations outsource to third-party vendors, it’s still crucial to have a comprehensive digital communication strategy that aligns with individual business standards. TrueAccord goes above and beyond with Recover, our late-stage collection solution that proves digital-first delivers: 96% of consumers who resolve with Recover do so using only self-serve digital tools.

Learn how to evaluate your third-party collection partners, including the top 10 questions to ask vendors, in our new eBook the Buyer’s Guide to Effective Third-Party Collections»»

TrueAccord’s mission to help organizations recover more (from happier consumers) is comprehensive for both first-party, pre-charge off and third-party, post-charge off, whether using one or both intelligent digital-first solutions together.

How Buy Now, Pay Later is Transforming Online Shopping With Gen Z

By on August 24th, 2022 in Industry Insights, Product and Technology
How Buy Now Pay Later is Transforming Online Shopping With Gen Z

Buy Now, Pay Later (BNPL) plans have taken over as a popular financing option for consumers, partly due to an increase in online shopping demands during the pandemic. In 2021, Americans spent more than $20 billion through BNPL services, taking up a bigger part of the $870 billion-a-year online shopping market. From laptops and airline flights to clothing and furniture, BNPLs make it simple to pay for almost anything in small installments. Since the start of the pandemic, millions of international consumers, especially Gen Z (10-25 years old), have gravitated toward using this service. According to a study by Forbes, BNPL use among Gen Z has grown 600% since 2019. The rise of interest in BNPL is also likely influenced by increased financial uncertainty, high-interest rates and a downward trend in credit card approval. As consumers show preference for digital financial services, BNPL continues to grow and become available at more retailers. 

Why are BNPLs Popular with Gen Z?

Services like Afterpay, Klarna, Affirm and others have gained a lot of popularity in recent years, especially among younger generations who may struggle with cash flow. With BNPL, the first payment is due at the time of purchase, with subsequent interest-free payments usually due within a few weeks or months. 

More and more, BNPL providers are reaching these younger audiences through influencers and brands on TikTok, and the variety of goods and services you can purchase with the service continues to expand. Some popular buy now, pay later items include clothing, concert tickets, cosmetics, electronics, furniture, groceries, hotels and flights.

But, like credit cards, missing payments can result in late fees and other penalties. With Gen Z, there’s already a pattern of missing payments. A survey conducted by Piplsay showed that 43% of Gen Zers missed at least one BNPL payment in 2021. 

Gen Z Favors BNPL More Than Other Generations

Debt types and payment preferences constantly change along with technology. The traditional credit card debt is being replaced by BNPL, specifically when we look at Gen Z. For one, it’s easier to be approved for a BNPL application since the process only requires a soft credit check, unlike a hard credit check that most credit card issuers require. When looking for an alternative to high-interest credit cards, BNPL installment payment plans are a popular option. BNPL consumers know upfront what will be expected of them, and the possibility for large debt build-up is replaced with a finite number of payment installments. This transparency and manageability make it easier to understand. And it’s one that has the potential to continue to evolve for the better by providing consumers with more inclusive credit and payments options.

When it comes to both luxury and essential purchases, younger consumers are more likely to take advantage of BNPL to afford them. A survey from TrustPilot found that 45% of consumers between the ages of 18 and 34 were likely to use such services for basic essentials while 54% would use them for luxury items. For those aged between 34 and 54, these results were 33% and 38% respectively. And for people aged 55 and up, the results were 16% and 24%. 

Since it’s quite easy to sign up for one or more BNPL loans, the likelihood of losing track of payments or overspending is real, especially for Gen Z. According to a report from J.D. Power, about one-third of younger consumers said they spent more than their budget allows with BNPL. And since different retailers offer financing through various BNPL services, it can also be a challenge to track multiple accounts at once. This isn’t surprising as some of the younger generations do not have the financial literacy or experience that older generations have and they’re more likely to face consequences and penalties like missing a payment.

Meet Gen Z Where They Are to Effectively Recover More

The good news is that the outlook for Gen Z BNPL customers that end up with accounts in collection is different than for those who default on credit card debt. On average, BNPL debts see higher and faster repayment rates than similar-sized credit card debts. Higher engagement leads to better repayment rates. According to TrueAccord data, the percent of BNPL customers who make a payment is more than double the like-size credit card accounts at 30 days post placement and 50% higher at 90 days. 

As a debt collection platform that engages digital-native consumers where they are and with a priority on customer experience, many leading BNPL providers partner with TrueAccord to address both early delinquencies and charged-off accounts. After these BNPL customers repay their loans and have a positive experience, they’re able and likely to use the service again, and this time with some experience about how it works. By using this information, TrueAccord can help find the most optimal ways to reach the younger audience and help them pay off their debt from BNPL. 

Want to learn more about how to engage with consumers of any generation in whatever stage of collection they might be in? Schedule a consultation to see what TrueAccord’s digital solutions can do for your debt recovery strategy. 

Further Reading: 

National Financial Awareness Day: Why Financial Literacy is Beneficial For Everyone

By on August 11th, 2022 in Industry Insights

August 14 is National Financial Awareness Day, making it an appropriate time to shine a spotlight on initiatives that can help improve consumer financial awareness in the collections space. Financial literacy is an essential life skill that benefits people throughout their lives, but is often overlooked when it comes to what happens if a payment is late or missed. Financial literacy during delinquency is just as important as planning for the future—and can even play a big part in financial future-planning.

Whether it’s taking out a loan, buying a house, saving for retirement or purchasing goods on a credit card,, people are constantly being asked to make decisions that affect their personal finances. As reported by the Milken Institute, only about 57% of the American population is considered financially literate. In order to address this gap, lenders are in a unique position to help provide customers with educational content that not only improves customers’ financial literacy but helps with their own retention and acquisition strategies by building and maintaining customer trust and loyalty. Providing consistent outreach—especially in early delinquency—will give customers more opportunities to engage, understand, and resolve debt.

Debt levels are on the rise again: according to the New York Federal Reserve, between the national student loan debt topping $1.6 trillion in 2022 and household credit card debt also climbing, we’re seeing the largest quarterly increase in 22 years at $860 billion. And individuals become more susceptible to going further into debt if they don’t have a solid foundational understanding of what happens when they first fall behind. Overall, lower levels of financial literacy end up contributing to increased rates of bankruptcy, defaults, and foreclosures.

As financial services leaders know, maintaining customer relationships—including accounts in early delinquency—is more profitable than writing off bad debt due to ongoing loan and credit losses, and then having to start the acquisition process for a new customer all over again. The Receivables Management Association International (RMAI), a non-profit trade association for businesses in the financial services industry, understands this gap and the need for increased literacy created a website with many useful literacy resources for consumers offering free education on topics like managing personal finance, money, and investing. By sharing tools like this or taking on an array of education initiatives and implementing financial literacy as a component of your debt recovery strategy, businesses can help their customers regain their financial health.

TrueAccord is a certified business through RMAI’s Certification Program requiring an independent audit to confirm compliance with a set of rigorous uniform industry standards of best practice which focus on the protection of the consumer. Interested in learning how TrueAccord can help create a customizable user-beneficial experience for your customers? Schedule a consultation to see what TrueAccord’s digital solutions can do for your debt recovery and education strategy»»

What are We Seeing in Consumer Credit Trends Today? A Video Interview with Ohad Samet

By on August 9th, 2022 in Industry Insights, Industry Interviews, Webinars

The financial landscape for both consumers and businesses is particularly uncertain right now. Many new fintechs and neobanks are experiencing their first delinquency surge and others soon to follow. This year, the challenges of managing delinquencies and navigating an uncertain economy will compound, making it imperative for companies to critically think about their strategy to collect from consumers in debt.

But from the perspective of a seasoned veteran of the financial services industry, what are we really seeing in consumer credit trends today? And what should businesses really be preparing for tomorrow?

We sat down with TrueAccord co-founder Ohad Samet to get his insights on what we’re seeing in consumer credit trends today, managing delinquencies, and how to navigate in this economy. Watch our interview or read the transcript below»»

What are we seeing in consumer credit trends today?

OHAD SAMET, TrueAccord co-founder:
I think we all notice that we’re dealing with a lot of lagging indicators in terms of consumer capacity to pay. Of course, one leading indicator is demand for credit. But in terms of what consumers are able to do—meaning their sentiment—are they willing to pay? Are they able to pay? Do they have enough disposable income? So many of these numbers are trailing indicators.

However, consumer net worth is still high. Why is that? It’s because stocks in primary, the value of primary residences, is calculated in the net worth of consumers. And so if you believe there was a bubble or just a run up in prices because of a lot of demand and very low supply, then that would artificially inflate the net value or net assets of consumers, and we will only discover how consumers are faring realistically in a few months.

Even if from a trailing indicator perspective, meaning delinquencies, net worth and so on, we are not seeing a drop yet. We’re only seeing banks increase their loss reserves in anticipation for losses.

We are definitely seeing a change in consumer sentiment. It can be because they’re running out of money. It can be because of general sentiment in the market. Inflation is up, risk is up, consumers start saving more—but we are definitely seeing that. And that, to me, is a leading indicator that we all need to be aware of.

Interested in learning how you can get ahead and prepare for delinquencies before they happen? Schedule a consultation to learn how TrueAccord can help you get started on your collection strategy»

Elevate Your Collection Strategy with Machine Learning and HeartBeat

By on July 7th, 2022 in Industry Insights, Machine Learning, Product and Technology

Debt recovery and collection look quite different in 2022 than it did ten, five, even just a year ago: new channels to reach consumers, larger data sets to analyze, complex regulations that can vary state by state, and so much more.

So when it comes to deciding the best way to engage consumers and effectively recover debt, has your strategy evolved to keep up? Machine learning, artificial intelligence, data science—these terms are thrown around a lot, and for good reason.

But how does it tactically improve the experience for both lenders and members?

Decoding Machine Learning for Debt Collection and Recovery

To help decipher real differences between a machine learning strategy versus the traditional call-and-collect, we have designed a highly visual guide to cut through the jargon and help you understand the basics of machine learning in collections. Decoding Machine Learning for Debt Recovery and Collection provides straightforward definitions, clear diagrams, and bottom line benefits make this eBook your at-a-glance guide to machine learning in debt collection.

Download your complimentary copy of the new eBook Decoding Machine Learning for Debt Recovery and Collection here»

From delivering a better experience in-line with what consumers expect from businesses to streamline communications, machine learning has gone from a “nice to have” to a “must have” for collection efforts.

Upgrade Debt Recovery & Collection With HeartBeat

Although this type of technology is a step in the right direction, it’s only one step forward—your debt collection strategy can go even further with TrueAccord’s patented decision engine, HeartBeat.

Integrating machine learning into your practice is certainly important—but how does this technology know what the best choice is to engage all of your delinquent accounts now and in the future?

Say hello to HeartBeat, our intelligent decision engine, and say goodbye to missed debt recovery opportunities left on the table by basic machine learning models. See exactly how HeartBeat upgrades your collection strategy in our new eBook, Upgrade Debt Recovery & Collection With HeartBeat—the more in-depth companion piece to our visual guide to machine learning (detailed above).

While HeartBeat utilizes machine learning in its decision-making process, it is not limited to it. This decision engine is continuously evaluated for performance, and adjusted to align with the current economic situation, changes in consumer behavior, and updates to compliance rules.

If you are switching from a more traditional outbound approach then a basic machine learning model can provide a short-term lift in recovery rates, but will hit a dead end when it comes to optimizing, adapting, and improving over time. HeartBeat is set up for the long game and recovers more because of it.

Download your complimentary copy of the new eBook Upgrade Debt Recovery & Collection With HeartBeat to learn how to start recovering more»

Elevate Engagement, Recover More

Together, these two companion eBooks, Decoding Machine Learning for Debt Recovery & Collection and Upgrade Debt Recovery & Collection With HeartBeat, serve to be the ideal introduction into machine learning in debt collection and then a deeper look beyond the basics to see what even more advanced technology can do for your recovery operation.

Discover how an intelligent, digital-first collection strategy drives overall improved performance, better member experience, and the more effective recovery of delinquent funds—without implementing more manual processes or adding headcount to your team.

Schedule a consultation today with one of our experts today to learn more about how you can elevate your debt collection practice today.

Bridging the Gap Between Machine Learning and Human Behavior with HeartBeat

By on June 27th, 2022 in Industry Insights, Machine Learning, Product and Technology

When it comes to engaging consumers in debt collection, behavioral science helps us to understand and respond to an individual’s situation, motivations, and contact preferences.

For example, we know that consumers don’t like being called by debt collectors. With that knowledge, behavioral science then helps us determine the optimal way to meet consumers where they are, contact them when they want by using their preferred channels, and lastly sending a message that resonates with them enough to engage.

It starts with a lot of engagement data. At TrueAccord, we’ve been collecting data about how consumers engage with us for nearly 10 years to determine the optimal ways to engage with consumers, and then use that data to generate a special collections experience just for them – from best time, best channel, and best language to engage that individual consumer.

Take content for example, each person is unique and different people respond differently to different communications. They are driven to action by different words and are convinced for different reasons. In writing content, it’s our goal to write content that responds to these individual needs.

There are 2 things we consider when writing content for collection communications: content type and content dimensions.

  • Content type is what we send based on a user’s actions. As an example, following up on a page view—if a consumer is viewing a payment plan, disputing a debt, or thinking about unsubscribing but drops off the page, we will try sending a follow up email or SMS with other plan options, information about the account, a description of how to unsubscribe or dispute for them to view. We will continue to try different content types until we find the right one that engages the consumer.
  • Content dimensions are more established behavioral science frameworks used to ensure that our communications vary in style and tone so that we are speaking to consumers in a unique way that will motivate them to engage. Everyone responds to different motivations so we use a variety of different frameworks until we find the one that connects with the individual

Each piece of content is tagged depending on the content type and dimensions so it can be easily used by HeartBeat, our powerful and intelligent patented-machine learning engine. Good content will lend itself well to automated, data-driven prioritization done by HeartBeat to present customers with the best possible content item at each given time.

How can technology personalize the debt collection experience?

By using technology and behavioral science to determine the best way to communicate with consumers, we are able to personalize each user’s unique experience. Our patented machine learning engine mentioned above, HeartBeat, allows us to do just that. HeartBeat collects engagement data and then, after analyzing multiple solutions, suggests the best possible treatment depending on the individual and their engagement. HeartBeat also uses a real-time feedback loop so the technology can adapt to a consumer’s engagement right as it happens.

Instead of relying on data like age and location, HeartBeat uses engagement data to personalize the communication process. The engagement data is collected every time a consumer engages in a certain way, whether it’s clicking on an email or SMS, visiting a webpage, and/or viewing payment plan options. Our system learns what motivates the consumer and responds with content or payment options that will resonate with them.

For example, if the consumer clicks on an email that uses likable content mentioning “short term cash flow,” our system may determine to send a friendly follow up email letting them know that they can set up a payment plan that starts on a later date when they’ll have the ability to make a payment. We know what motivates an individual may change from day to day depending on their circumstances, so we treat them based on their active engagement and behavior with our system rather than construct a specific profile for each consumer and treat them based on that basic account profile.

By combining behavioral science and machine learning, the best-possible payment options are offered to customers based on their debt situation, previous communication, and engagement data. Whether their actions show that they would benefit from a long-term payment plan, or if it shows that they’d prefer to pay in full, HeartBeat will suggest the best option for that customer. The power of using behavioral science and machine learning is anticipating the needs and preferences of our customers and using that to help them as seamlessly as possible.

Overall, there is no one way of communicating that will work for everyone across all situations, and tailoring communication and collection strategy to align with consumer preferences is better for both the consumer, lenders, and our business. That’s why building the bridge between machine learning and human behavior is essential.

Discover how HeartBeat can help humanize your collection process in our new in-depth eBook, Upgrade Debt Recovery & Collection With HeartBeat, available for download here»

Learn more about behavioral science from TrueAccord’s User Experience Director, Shannon Brown in a new interview in Collector Magazine here»

How Making the Switch to Digital-First Helped Recover $17M with TrueAccord’s Retain Platform

By on June 6th, 2022 in Industry Insights
How Making the Switch to Digital-First Helped Recover $17M with TrueAccord's Retain

When COVID hit in 2020, one Fortune 500 company needed to find an effective way to communicate and collect from the rising overdue accounts, with many of their customers falling into financial hardships. While the company had previously relied on old-school communication tactics like direct mail and an in-house call center to reach customers who had delinquent accounts, they knew a better solution was needed. 

The company had already observed firsthand a rise in customers’ preference for digital communications between mobile apps and online bill pay options, making it clear that this was the best route to go. Rather than build from scratch in-house—which would’ve been costly and time-consuming—the company evaluated third-party options before choosing TrueAccord and implementing Retain, the client-labeled early-stage collections solution. 

Once implemented and customized to fit the company’s needs, TrueAccord helped them collect over 63,000 payments to recover over $17 million. 

Retain’s digital outreach strategy made a significant impact on customer engagement and resolution beyond just payments with improvements across their paid in full rate, overall collections rate, average amount collected daily, and more. And with the help of HeartBeat, TrueAccord’s powerful machine learning decision engine, they were able to observe behavior data and optimize digital touch points and engagement in real-time. In just a few weeks, this digital collections approach caused a major transformation that only continued to improve. 

Discover all the astounding results in our full Case Study and learn more about how Retain helped the company implement the successful solution. 

Want to see how much more your company could recover with Retain? Request a demo! 

CFPB Issues $4M in Penalties and Permanent Bans Against Predatory Collection Ring

By on May 26th, 2022 in Industry Insights

On May 23, 2022, the Consumer Financial Protection Bureau (CFPB), in partnership with the New York Attorney General, filed a proposed judgment against a debt collection enterprise with a history of deception and harassment to pay $4 million and be permanently banned from the debt collection industry.

This follows the September 2020 Federal Trade Commission (FTC) initiative “Operation Corrupt Collector” to protect consumers. The FTC, along with more than 50 federal and state law enforcement partners, focused on several predatory collection methods, including “phantom debt collection,” a practice where companies were trying to collect debts they cannot legally collect or that a consumer does not owe.

According to federal regulators in the 2022 case, the group of debt collectors in upstate New York went after their targets by calling friends, family and employers and orchestrating “smear campaigns” against people they claimed owed money—only one part of the predatory practices the debt collection ring employed.

Predatory Practices in Debt Collection

The collection industry has long been scrutinized for the methods used to engage and recover debts, but technology and social media have created new avenues for predatory practices to evolve. In addition to the smear campaigns, other illegal tactics to collect debt outlined in the CFPB lawsuit include:

  • Falsely claiming arrest and imprisonment
  • Lying about legal action
  • Inflating and misrepresenting debt amounts owed
  • Harassing people with repeated phone calls
  • Failing to provide legally mandated disclosures

Contacting to Collect Via Social Media

As of November 30, 2021, debt collectors can now contact consumers on social media. This change to the Fair Debt Collection Practices Act (FDCPA) did include specific rules for social media communications:

  • The message must be private
  • The debt collector must identify themself
  • The debt collector must provide a way for the consumer to opt-out of social media communications

In addition to these new rules under the FDCPA, collectors who abuse or harass consumers via social media violate the Dodd Frank Act’s prohibition against unfair deceptive abusive acts or practices (UDAAPs). The CFPB and FTC through Operation Collection Protection, also look to prosecute UDAAPs in their protection of consumers

Compassion Collects More (and Protects Against Penalties)

Although the majority of collectors do not go as far as committing “emotional terrorism,” as one social media smear campaign victim described in the 2022 lawsuit, finding the appropriate way to connect with today’s consumers to recover delinquent funds can seem nebulous—and nerve-racking with the potential for hefty penalties.

Even as communication channels expand and new regulations are handed down, best practices to engage with consumers remain the same: friendly, humane messages will empower and motivate customers to pay more effectively than aggressive outreach and threats. TrueAccord has proven that this compassionate approach works with more than 16 million customers served, 4.7 on Google reviews, A+ rating with the BBB, overwhelmingly positive customer feedback, and industry-leading recovery results.

Discover how you can flip the script on your collection communication with TrueAccord and protect your business and customers. Schedule a consultation today to get started»

Technology in Collection: 21 Must-Know Buzzwords

By on May 24th, 2022 in Industry Insights, Machine Learning, Product and Technology

Your Guide to Key Terms for Today’s Debt Recovery Strategy

Reaching consumers today requires a more sophisticated process than simply dialing the phone or sending a generic email, especially when it comes to debt recovery and collection. But reviewing potential strategies can often leave you lost in a sea full of acronyms and buzzwords. Between terms like AI, machine learning, and data science, it can be difficult to keep up with the different definitions—and understand how they impact your business and bottom line.

To help keep this word salad straight, we’ve compiled a glossary of helpful terms, definitions, and examples to help differentiate them:

  • Accounts per employee (APE), account to collector ratio (ACR): The number of delinquent accounts that can be serviced by an individual recovery agent – often used to measure cost effectiveness.
  • Artificial Intelligence (AI): AI is a blanket term describing a range of computer science capabilities designed to perform tasks typically associated with human beings. Machine learning (ML) is a subset of AI. Through AI, processes like debt collection can become more efficient by developing better outreach and deployment strategies.
  • Big Data: This term means larger, more complex data sets . Big data can save collectors a lot of time by using many variables for analytics-based customer segmentation, insert, insert..
  • Coverage: The percentage of users for whom organizations have digital contact information, such as email addresses or phone numbers.
  • Customer Retention Rate: Measures the total number of customers that a company keeps over time. It’s usually a percentage of a company’s current customers and their loyalty over that time frame.
  • Data Science: ‍A cross-discipline combination of computer science, statistics, modeling, and AI that focuses on utilizing as much as it can from data-rich environments. Data science (which includes machine learning and AI) requires massive amounts of data from various sources (customer features such as debt information or engagement activity) in order to build the models to make intelligent business decisions.
  • Deep Learning (DL): A subset of machine learning. Deep learning controls many AI applications and services and improves automation, performing analytical tasks with human intervention.
  • Delinquency rate: The total dollars that are in delinquency (starting as soon as a borrower misses as a payment on a loan) as a percentage of total outstanding loans.
  • Deliverability: The percentage of digital messages that are actually reaching consumers (e.g., as opposed to ending up in email spam filters).
  • Digital engagement metrics: A range of KPIs that capture how effectively digital channels are reaching and engaging consumers.
  • Digital opt-in: The percentage of users who have indicated their preference to receive digital communications in a particular channel.
  • Efficiency: Measures a company’s ability to use its resources efficiently. These metrics or ratios are at times viewed as measures of management effectiveness.
  • Machine Learning (ML): Technology that uses algorithmic modeling techniques to observe patterns and trends, reassessing the best approach to achieve a goal, and adapting behavior accordingly. It continuously, automatically learns and improves at a massive scale as more data is observed. With the help of machine learning, companies can make sense of all their data and take on new approaches to debt collection processes from better customer experience to more efficient delinquent fund recovery.
  • Net loss rate: The total percentage of loan dollars that get charged off (written off as a loss).
  • Open rate, clickthrough rate: The percentage of users who are actually opening and clicking digital communications.
  • Predictive Analytics: Predicting outcomes is one specific application of machine learning. It allows companies to predict which accounts are more likely to pay sooner and allows them to better plan operations accordingly.
  • Promise to pay kept rate: The percentage of delinquent accounts that maintain a stated commitment to pay.
  • Promise to pay rate: The percentage of delinquent accounts that make a verbal or digital commitment to pay.
  • Right party contact rate: The rate at which a collections team is able to establish contact with the consumer associated with a delinquent account.
  • Roll rate: The percentage of delinquent dollars that “roll” from one delinquency bucket (e.g., 60 days past due) to the next (e.g., 90 days past due) over a given timeframe.
  • SMS: An acronym that stands for “Short Message Service” referring to text messages on cellular devices.

For more information on how to get started integrating innovative technologies into your debt recovery strategy, schedule a consultation today.

Reaching Consumers Beyond Outbound Calling: Insights and Learnings from Collection Experts

By on May 16th, 2022 in Industry Insights, Webinars

If transforming the way you reach customers to recover delinquent accounts isn’t on your radar in 2022, a year where projected delinquencies are expected to soar, you’re at risk.

Fortunately, we recently rounded up a panel of experts to share their insights and experiences taking those first steps away from outbound calling and toward better consumer communication in our webinar “What Labor Shortage, Wage Inflation, and Regulatory Restrictions Mean for Your Call Center”—available to watch on-demand now»

Heather Bentley, Citizens Bank | John Craven Sr, Cox Communication | Jennifer Masterson, PNC | Richelle Rocazella, TrueAccord
Heather Bentley, Citizens Bank | John Craven Sr, Cox Communication | Jennifer Masterson, PNC | Richelle Rocazella, TrueAccord

Below are some of the top questions, answers, and first-hand accounts from our discussion (plus some attendee poll results):

What percentage of contacting consumers is done via phone vs other channels?

Heather Bentley [HB]: Overall a little bit above 50%, but that includes outbound calling from live agents and interactive self-serve calls, which really is more the digital channel.

John Craven Sr [JC]: Live agent we’re at 0%. We do use a virtual agent, so I would say we use that virtual agent probably 40% to 45% of the time.

Jennifer Masterson [JM]: We’re close to 50/50. We will always be taking phone calls, but we are doing a lot more now in the digital space trying to contact people.

Richelle Rocazella [RR]: Less than 1% of our communication is via phone. And that is all inbound when we do engage with our customers. We will only make an attempt to reach a customer via phone if they have requested a call.

What does outbound calling versus an omnichannel strategy look like at your organization? 

JM: An omnichannel strategy triggers customers to get them to self-serve and frees up our agents to talk to customers that need more help or more assistance. That’s really where the more valuable conversations happen. 

HB: It’s really about putting the two pieces together [outbound and other channels], and trying to find the sweet spot of customer experience and collection effectiveness. Pulling those two things together – so if we find customers who are responding to a specific channel like text, but then if they go past the point we would normally see in delinquency, we can say, “Wait a minute, something’s different. Now we need to call this customer.” 

JC: When you take a person that’s spending a good portion of their day making outbound calls, and you turn them into an inbound agent where they’re talking to a customer almost every time that the phone rings, the maximization of your employee’s time puts you into a completely different realm of being able to perform.

Was COVID or labor shortage and wage inflation a driving factor in the shift to a more digital approach and self-service approach? 

JM: We started before COVID because consumer behavior was dictating it. It’s really hard to get someone to pick up the phone. The number of times that you actually connect to somebody live on dials is really low. That’s really what drove us to start going down the digital path. Now, I think there’s a ton of benefits to be gained from that, things like when COVID happened, this labor shortage. Once you have the channels in place, it becomes easier to ramp them up or down depending on what’s happening in the economy. 

Once you have the channels in place, it becomes easier to ramp them up or down depending on what’s happening in the economy. 

Jennifer Masterson, Executive Vice President, Retail Lending Solutions, PNC

How did you get started?

HB: We started individual channels at times with easy things like virtual messages, then interactive messaging and email and text, and then moved into two-way in those channels. And we’re still working so that you could have the same experience in that digital space that you’d have with an agent on the phone.

JC: In 2014 [Cox Communications] started texting customers and then we added email around 2017, but we didn’t have a digital platform at that time. We implemented a digital platform in early 2020, and fortunately we were able to go full omnichannel with integrated channels that we were able to roll out. 

What are some of the challenges to building an omni-channel strategy?

RR: Making sure all channels are integrated to develop a full customer experience journey. Also ensuring service levels are maintained as more channels are added.

HB: If you’re not sequencing [the channels] and working them together, it can be like bombing your customers again. If you’re bombing them with calls and now you’re bombing with text and with email and it’s just, “Hey, we’ll just try everything.” You quickly desensitize your customers to your communications.

JC: We set up all the channels and then we went on a journey to bring them all in and orchestrate them so they were working together. If I can suggest anything to those that are using the phone strategy, if you’re ready to start your digital journey, start with a journey that is an orchestrated journey, instead of building out the channels and then trying to bring them all together. You’ll get so much further ahead and a quicker response to digital integration.

From a self-serve standpoint for debt collection and recovery, what are some of the compliance or regulatory challenges to keep in mind?

HB: As we move to digital channels, [regulators] move their focus to what happens in email and on your website and in text messages, because before their focus has been about calling over the last 10 years. So as an industry we have to stay ahead of that and think both like a customer and like a regulator. Be a bit conservative in some of your interpretations of how far and wide your communications go.

JC: From the risk side of things, if you’re moving from an analog or non-digital traditional approach to a digital approach, think how to digitize your compliance rules that may have some risk mitigation in it. Don’t create a new reality—make sure that you replicate what you have already in place to make sure you have safeguards.

JM: On the phone side you’re dealing with agents that have to remember to say things right. But coming out of COVID a lot of the banks and other financial institutions put hardship assistance online just as an example, and I think the regulators like that because everybody’s essentially getting the same experience. I think it’s easier to be in compliance and meet all the regulatory requirements in a channel like that, than it is with agents. 

As an industry, we have think both like a customer and like a regulator.

Heather Bentley, Senior Vice President Head of Consumer Specialty Operations, Citizens Bank

What was the best way organizations should have prepared to meet the guidelines for the CFPB’s Regulation F to move to a more omnichannel approach?

RR: The best thing any organization could have done for Reg F would be to have a strong legal and compliance group that you work with. While it’s not something that drives revenue, it is a must in every organization.

Where would be an ideal place to start exploring or considering if you’re moving away from the outbound call center and looking to integrate more channels?

JC: Whatever your strategy is, you need to set yourself on a path making sure that your digital journey has a brain. Recognize that different profile customers react differently to different contact channels. As you use your omnichannel approach, having that brain mentality. Knowing what your customers’ preferences are and then leveraging those preferences will set you on a great path to performance.

JM: Every company is different in terms of what capabilities you have or don’t have. While texting and emailing made sense for PNC at first, maybe there’s another channel that a company can easily plug into. Start wherever you can because consumers don’t want to pick up the phone and call. Whether it’s the ideal option or not, give consumers another path and another option. Start somewhere and then build off of that in whatever way makes sense for your organization.

RR: For businesses in the early stages of adopting a more omnichannel approach for collections, email or text would be a good place to start.

Knowing what your customers’ preferences are and then leveraging those preferences will set you on a great path to performance.

John Craven Sr,  Enterprise Center of Excellence Call Center Director, Cox Communication

Watch the full webinar for even more insights, advice, and answers to even more audience questions»

Ready to get started on the digital transformation of your collection strategy? Schedule a consultation to learn how you can take the first steps»