I'm consulting for a debt buyer and one staff member asked why I was up in arms about abusive collection practices. We decided to do a little role playing. It went kind of like this...
"Hello, Mrs. Williams?"
Yes
This is Mr. Stevens from ...., This is an attempt to collect a debt for ABC Payday company and any information obtained will be used for this purpose. .. Are you aware of your obligation?
Yes, but...
No, BUTS Mrs. Williams. Do you remember taking out this loan?
Yes, but...
Mrs. Williams, the balance is $300. Will you make good on this today?
No, I can't
Can't or WON'T? Mrs. Williams did you borrow this money? Did you promise to pay it back??
Yes, but...
No buts Mrs Williams. It is past due and you should pay it today
but..
Mrs. Williams, did you INTEND to not pay this back??
Uh..
Did you mean to just KEEP the money? You signed a contract.
Mrs. Williams. I can take a check by phone right now. Please get your check book...
No, I ....
Mrs. Williams DO YOU WANT THIS TO GET WORSE?
Uh...
MRS. WILLIAMS. MAKE PAYMENT TODAY AND THIS WILL GO AWAY. THERE ARE 2 KINDS OF PEOPLE IN THE WORLD. HONEST FOLKS AND THOSE WHO CHEAT AND LIE. WHICH ARE YOU???
but, but...
MRS. WILLIAMS. GET YOUR CHECK BOOK!
At this point, Jennie started to cry. Just a little. I watched her body change. She looked scared. Remember, we were just role playing.
I was forceful, a little loud but not yelling. I didn't break the FDCPA rules. I didn't do ANYTHING like is done 10,000 times a day in agencies all over the world.
But still, I wonder. Does our industry have to reduce consumers to tears in unproductive browbeating? 30 years of talking to debtors has taught me that connecting on a human level, getting the consumer to recognize his responsibility and then working out a solution is all that's required. We have to be smart and persuasive, not hostile and threatening.
Anybody with me?
Modern Asset Management provides agency oversight, consulting, training and performance analysis.
Tuesday, November 8, 2011
Tuesday, October 25, 2011
140,000 and Counting
FTC reports are old news. We see numbers all the time. But, let's pause and just think for a minute.
140,000 FDCPA complaints.
How mad does a consumer have to get to complain to the FTC? Would you? What would it take?
The FTC gets so many complaints against agencies and creditors they set up an easy to fill in website for consumers.
Yes, yes. I agree that there are millions of debtor consumers and we make millions upon millions of contacts. So, let's debate this a bit. The #7 category for most FTC complaints is Internet sales at 56,000. Seems to me that WAY more people shop on the internet than refuse to pay their bills. So, apples to apples, wouldn't internet sales be higher than FDCPA complaints?
I'm advocating using collection tactics that work. Direct, to the point communication. A good firm demand for payment. Listening to the consumer and solving problems. Hitting your numbers without bludgeoning the consumer into defending themselves the only way they know how.
We've created a cottage industry of lawyers suing collectors, we supply 22% of the FTC's business. This collateral work and expense defending ourselves could be better spent collecting more money.
I owned a collection agency for 17 years. I was sued three times. When we were wrong, we settled. When we were right we defended ourselves.
I'm championing strong collection efforts balanced with compassion for consumers in the ever worsening economy. We did it for years. It's very profitable. I can show you how.My website
How about we take a payment plan today rather than threaten somebody with arrest?
Tell me I'm wrong!
140,000 FDCPA complaints.
How mad does a consumer have to get to complain to the FTC? Would you? What would it take?
The FTC gets so many complaints against agencies and creditors they set up an easy to fill in website for consumers.
Yes, yes. I agree that there are millions of debtor consumers and we make millions upon millions of contacts. So, let's debate this a bit. The #7 category for most FTC complaints is Internet sales at 56,000. Seems to me that WAY more people shop on the internet than refuse to pay their bills. So, apples to apples, wouldn't internet sales be higher than FDCPA complaints?
I'm advocating using collection tactics that work. Direct, to the point communication. A good firm demand for payment. Listening to the consumer and solving problems. Hitting your numbers without bludgeoning the consumer into defending themselves the only way they know how.
We've created a cottage industry of lawyers suing collectors, we supply 22% of the FTC's business. This collateral work and expense defending ourselves could be better spent collecting more money.
I owned a collection agency for 17 years. I was sued three times. When we were wrong, we settled. When we were right we defended ourselves.
I'm championing strong collection efforts balanced with compassion for consumers in the ever worsening economy. We did it for years. It's very profitable. I can show you how.My website
How about we take a payment plan today rather than threaten somebody with arrest?
Tell me I'm wrong!
Monday, October 17, 2011
Reader's Digest... READER'S DIGEST!
Yes, that's right. Reader's Digest just had an article called "13 Things a Debt Collector Won't Tell You".
How much more into the sunlight can you get? A magazine my grandmother used to read. The last place to find a clean, non political joke. Consumers overwhelmed debt collectors are so mainstream Readers's Digest does a piece on us. Now that everybody is late paying somebody, now that bragging about your "free rent" during foreclosure is common place; its time to straighten up and fly right.
Consumer abuses are out for anyone to hear. If the public is getting advice on FDCPA violations, maybe its time we stop creating them!
Can you do this job straight and by the book? You bet! I collected a lot of money over the years treating consumers with respect and dignity. Not to say we didn't go R&R (an argument that went nowhere) or heard one too many "HLS" (hard luck story). Not to say I'm not a little cynical after 30 years in the trenches.
But what I am saying is the law is the MINIMUM requirement. Good business practices go far beyond adhering to the law. The components of an excellent collection agency are superior training, hiring the smartest people you can find, paying fairly, and treating employees like gold.
Smart, happy, motivated, trained collectors simply know what is truthful and legal. They also earn you the most revenue. If you want some "secret sauce" or to tell me I'm wrong, just post your comments!
Readers's Digest? REALLY?
http://www.rd.com/slideshows/13-things-a-debt-collector-wont-tell-you/
How much more into the sunlight can you get? A magazine my grandmother used to read. The last place to find a clean, non political joke. Consumers overwhelmed debt collectors are so mainstream Readers's Digest does a piece on us. Now that everybody is late paying somebody, now that bragging about your "free rent" during foreclosure is common place; its time to straighten up and fly right.
Consumer abuses are out for anyone to hear. If the public is getting advice on FDCPA violations, maybe its time we stop creating them!
Can you do this job straight and by the book? You bet! I collected a lot of money over the years treating consumers with respect and dignity. Not to say we didn't go R&R (an argument that went nowhere) or heard one too many "HLS" (hard luck story). Not to say I'm not a little cynical after 30 years in the trenches.
But what I am saying is the law is the MINIMUM requirement. Good business practices go far beyond adhering to the law. The components of an excellent collection agency are superior training, hiring the smartest people you can find, paying fairly, and treating employees like gold.
Smart, happy, motivated, trained collectors simply know what is truthful and legal. They also earn you the most revenue. If you want some "secret sauce" or to tell me I'm wrong, just post your comments!
Readers's Digest? REALLY?
http://www.rd.com/slideshows/13-things-a-debt-collector-wont-tell-you/
Thursday, September 29, 2011
When a contract isn't a contract ---
Just because a consumer signs on the dotted line doesn't mean you have a valid contract. Consumers are entitled to protection and businesses are supposed to do their homework when drafting a contract. Its not a "legal document" if it's against the law.
There's this little group in Washington called the Federal Trade Commission and they protect us from, well, guys like us.
It disturbed me to find out that lenders still write contracts with illegal clauses like confessions of judgment, wage assignment and pyramiding late payments.
The wage assignment, or "voluntary wage garnishment" issue is in the sights of the FTC now. See their complaint against Big Sky Payday Loans, news release dated 9/12.
Here's a link to the pamphlet the FTC put out. Yes, they wrote a pamphlet for those of us too ADD to read the actual law. Are we following the rules?
http://business.ftc.gov/documents/bus04-complying-credit-practices-rule
The days of the wild wild west are over. Consumers are on to us. Time to take the upper hand and obeying the law is the minimum standard.
See more at my website.
http://business.ftc.gov/documents/bus04-complying-credit-practices-rulehttp://business.ftc.gov/documents/bus04-complying-credit-practices-rule
There's this little group in Washington called the Federal Trade Commission and they protect us from, well, guys like us.
It disturbed me to find out that lenders still write contracts with illegal clauses like confessions of judgment, wage assignment and pyramiding late payments.
The wage assignment, or "voluntary wage garnishment" issue is in the sights of the FTC now. See their complaint against Big Sky Payday Loans, news release dated 9/12.
Here's a link to the pamphlet the FTC put out. Yes, they wrote a pamphlet for those of us too ADD to read the actual law. Are we following the rules?
http://business.ftc.gov/documents/bus04-complying-credit-practices-rule
The days of the wild wild west are over. Consumers are on to us. Time to take the upper hand and obeying the law is the minimum standard.
See more at my website.
http://business.ftc.gov/documents/bus04-complying-credit-practices-rulehttp://business.ftc.gov/documents/bus04-complying-credit-practices-rule
Thursday, September 22, 2011
Mediation and 3rd Party Intervention to Diffuse Conflict
Back in the 80's, I was a Better Business Bureau arbitrator. My specialty was automobile Lemon Law cases. Consumers were frustrated with Ford, GM, Chrysler and the State of California required arbitration prior to trial. It was an enlightening experience and good community service to boot.
What did I learn? People lie and companies lie even more. My job as the arbitrator was to cut through the BS and get to a solution that all could agree on. I had authority to award a buyback of the car if the Lemon Law standard was met. That usually wasn't necessary.
Most consumers simply wanted a fair shake. They wanted their complaints acknowledged. The wanted a simple, honest apology and some promise that it wouldn't happen to the next guy. They wanted a reliable car for their money.
Instead sometimes factory reps would cut corners like attempting to buff out paint imperfections instead of fixing them. Or withholding records. Lots of cutting corners rather than fixing problems the first time. It was Detroit at its worst.
The result? Lots of buybacks, lots of negative publicity and consumer ill will. It was just part of why we're driving Camrys, Accords and Hyundais today. Poor treatment of the American consumer comes back to bite you eventually.
The point? We're doing the same thing in the short term lending and collection space. Consumers don't feel they're being heard, that they're being taken advantage of . If we don't resolve our problems in house, well... 10,000 FDCPA lawsuits last year, a new CFPB and countless complaints on online complaint sites. Add to that real regulatory "reform" targeting extinction of short term lending and limitation of collector's ability to contact consumers.
How do we start to fix this? LISTEN. Consumers tell you before they go running to FDCPA attorneys and the Attorney General.
How do I fix this for clients? Actively engaging consumers, diffusing anger, getting back to the business at hand. Getting both sides to agree to a fair, workable payment arrangement on valid debts.
What did I learn? People lie and companies lie even more. My job as the arbitrator was to cut through the BS and get to a solution that all could agree on. I had authority to award a buyback of the car if the Lemon Law standard was met. That usually wasn't necessary.
Most consumers simply wanted a fair shake. They wanted their complaints acknowledged. The wanted a simple, honest apology and some promise that it wouldn't happen to the next guy. They wanted a reliable car for their money.
Instead sometimes factory reps would cut corners like attempting to buff out paint imperfections instead of fixing them. Or withholding records. Lots of cutting corners rather than fixing problems the first time. It was Detroit at its worst.
The result? Lots of buybacks, lots of negative publicity and consumer ill will. It was just part of why we're driving Camrys, Accords and Hyundais today. Poor treatment of the American consumer comes back to bite you eventually.
The point? We're doing the same thing in the short term lending and collection space. Consumers don't feel they're being heard, that they're being taken advantage of . If we don't resolve our problems in house, well... 10,000 FDCPA lawsuits last year, a new CFPB and countless complaints on online complaint sites. Add to that real regulatory "reform" targeting extinction of short term lending and limitation of collector's ability to contact consumers.
How do we start to fix this? LISTEN. Consumers tell you before they go running to FDCPA attorneys and the Attorney General.
How do I fix this for clients? Actively engaging consumers, diffusing anger, getting back to the business at hand. Getting both sides to agree to a fair, workable payment arrangement on valid debts.
Friday, September 16, 2011
The Real Unemployment Number
Doesn't it feel to you that there are a lot more unemployed people than 9%? Well, that's because there are.
Only the officially unemployed are counted in the reported number. Not counted are the long term "discouraged" (benefits have expired) unemployed, closed small businesses, and folks working part time because that's all they can get. Combine those, and according to Shadow Government Stats, we have unemployment over 22%.
Here's a chart courtesy of www.shadowstats.com :
What can we do with this information? We can develop empathy for our fellows and take that $25 payment arrangement for a while. We can reset our employees performance standards to include emphasis on higher volume of payments rather than just commission dollars.
We can be grateful when we're not part of the statistics and resolute in our beliefs when we are. Its going to be a long haul people! Start developing relationships with debtors because you're going to be talking to them a lot.
Only the officially unemployed are counted in the reported number. Not counted are the long term "discouraged" (benefits have expired) unemployed, closed small businesses, and folks working part time because that's all they can get. Combine those, and according to Shadow Government Stats, we have unemployment over 22%.
Here's a chart courtesy of www.shadowstats.com :
What can we do with this information? We can develop empathy for our fellows and take that $25 payment arrangement for a while. We can reset our employees performance standards to include emphasis on higher volume of payments rather than just commission dollars.
We can be grateful when we're not part of the statistics and resolute in our beliefs when we are. Its going to be a long haul people! Start developing relationships with debtors because you're going to be talking to them a lot.
Thursday, September 15, 2011
Reputation Resurrection
When I left the bank to buy a collection agency in 1989, my mother was so disappointed. It was much more impressive to describe her son as a "Vice President of Associates Bank" instead of bill collector!
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