Are you using the right collection agency for your brand? Is the collections company you are using compliant with Federal rules and regulations?
Your “partners” are very important to your “brand”. You prioritize your partner choices based on the importance of the service required. Collections is a process. It impacts your revenue stream directly on the balance sheet as well as to your Member Retention rate. You could recover upwards to 30% of lost revenue and re-introduce membership to nearly 45% of your lost member base with the proper programs. How important is your collection agency choice?
There are nearly 3,000 collection agencies in this country. They come in all shapes, sizes, and specialties. However, no matter the dimension or service specialty, all abide by the same rules (FDCPA: Fair Debt Collections Practices Act) and report to the same Federal Regulatory Agency (CFPB: Consumer Financial Protection Board). The rules that govern collection agency activity are too many to list in this short blog, however every agency – at the very least – is required to be properly licensed and adhere to specific consumer protection laws including but not limited to; telephone etiquette, process documentation (Compliance Management), and Data security (PII).
Your members are keenly aware of “your obligations” to them. Their expectations are high and their awareness is acute. Every interaction has liability – positive and negative.
The term “collections” is generally considered “negative”. Most people that fall “delinquent” on their financial responsibilities are a victim of a circumstance that may have been out of their control. Professional collection agencies face these situations every day and nearly in every communication they have with a “delinquent” customer or member. It is the responsibility of the collections company to treat the situation and individual with dignity and respect. Most agencies – like, First Credit Services – adhere to the “Collectors Pledge”; “I believe every person has worth as an individual. I believe every person should be treated with dignity and respect. I will make it my responsibility to help consumers find ways to pay or resolve their just debts. I will be professional and ethical. I will commit to honoring this pledge”.
Is your collection agency choice protecting your brand by treating your (former) members respectfully? Are you confident that the agency of choice has all the policies in place to ensure your member is contacted legally? Is the agency you have chosen transparent with their strategy regarding collections and member retention programs? Are you recognizing a fair return on the amount of accounts and dollars placed with that partner agency?