Collection Industry Tries A Different Approach In A Rough Economy
The debt collection industry’s techniques might be taking a turn for the….better? Bearing in mind the number of recent lawsuits against bill collectors, ACA International, the largest trade group of professional creditors and collectors, alleges more and more collection companies are working towards training collectors to take a more of an empathetic position.
Empathy may just be the plan of action that can turn the industry around. A large number of people who owe money are being called by various collections agencies, and if they do obtain money, they are not going to want to give it to the aggressive threatening collector, they will give it to the person they can work with.
As agencies are perfecting training courses to include advice on how to be gentler with consumers, there will be a change of focus that includes being put on coaching, mentoring and counseling debtors, rather than aggressively threatening them. Trainees are urged to reflect on their personal experiences with collectors or someone that they know has dealt with them.
One recent trend has been to suggest that debtors speak with their parents or grandparents about taking out a loan against their life insurance policies or reverse mortgage against their house. The collectors who practice this technique claim that our grandparents remember the Great Depression. They may not want this generation to feel that kind of pain and may be more apt to take a loan against the life retirement account or the life insurance policy.
Bill collectors who adhere to this philosophy believe that it is actually a positive thing. They allege that it does not hurt anyone. If a person borrows against life insurance it might be preferable to borrowing against a 401(k) or a retirement plan. That is because the person will be depending on that money to live on.
Right or wrong, it could do the collections industry some good to reassess its situation, and look for new innovative ways to collect in a suffering economy.
Mallory McGuinness works for a debt collection company. She also writes articles on business, finance, consumer spending and collection agencies.
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