I received a great question this week from someone who owns a payday loan company. They said they needed help with making effective collection calls to past due customers that will get them results while staying within the guidelines of the Fair Debt Collection Practices Act.
When I owned my agency I did collections for payday loan companies and had good results. I found that you have to keep on top of those types of accounts more than others and be very aggressive without breaking the law. I think one of the key things is to follow up, making many calls and following up with letters and more calls. You can be aggressive and firm without breaking the law and yield good results.
I of course recommend my book "Become the Squeaky Wheel, a Credit & Collections Guide for Everyone" which has information on making collection calls, some examples of calls, what you can and cannot say, what you can and cannot do and what the laws are when making collection calls.
I have also just finished working on a "Flip Chart" with another collector, it is a chart that has what you can and cannot say, when to say what, how to say it, and examples of what to say when you get different excuses from debtors. They are about complete and I should have them available on my site within 2-3 weeks. We have one for Business owners dealing with consumers and commercial accounts and another flip chart for debt collection agencies.
I also just finished a book for Entrepreneur Press called the "Ultimate Credit & Collections Handbook" which they are publishing to be released in August. I included many more examples of phone calls and how to handle them in this book, so you may want to check that out when it comes out. It will be available in bookstores nationwide and on amazon.com. You can pre-order it now at amazon.com.
Some tips to remember when making collection calls are:
- Always verify you have the debtor on the phone, and not a spouse, friend or any other person.
- Always identify yourself and your company to the debtor.
- Tell the debtor why you are calling and what you want.
- Do not call before 8:00 a.m. or after 8:30 p.m. in the debtors time zone.
- Try not to ask questions, state what you want, for example:
My name is Michelle Dunn from Pegs Book Store and I am calling about your past due balance of $100 on your account. I am calling to take your payment of $100 over the phone today, would you like to pay that with a credit, debit card or with a check by phone?
STOP
Let them respond. Silence is most uncomfortable for them, remember that. DO NOT SPEAK, let them answer you.
As you can see, you are not really asking them a question, you are telling them:
- Who you are
- Where you are calling from
- Why you are calling
- What result you want
If you want your money, you need to stay in control of the call.
Good luck!!!
Keep in mind that what you call "excuses" from debtors may be their reality. Not all debtors are in debt due to negligence, some, actually most have very real hardships (loss of a job, divorce, illness, etc). You will get better results if you are amicable.
Posted by: Sherryl | January 3, 2007 9:38 AM | Permalink to Comment