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Debt Collection

Debt Collection

Debt Collection Today

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Demand for debt collection services

The Debt Collection Agencies industry in the US is worth, by revenue, $18.8 billion. With 28% of Americans having at least one debt in collections, this is not surprising. Although so many are in debt, 80% of people want to pay it off.

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Where is the debt coming from

The average household debt in UK (incl mortgages) is £63,582, while the average American household has about $15,000 in credit card debt alone. The dependency on credit cards, tuition costs and the rising costs of living are forcing more people into collections.

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Debt collection with empathy

You can carry out debt collection with understanding by relating to your customers using conversational messaging. Debt collection software allows you to recognise a person’s vulnerability and respond accordingly.

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What is Debt Collection?

Debt collection is the process of recovering money owed to an organisation by individuals or businesses that is still outstanding past the agreed due date.

The process can be done internally, using a Debt Collection Agency (DCA), or with debt buyers who buy the debt at a lower value and keep the full amount recovered.

Typically, agents will use collections technology to ramp up efficiency, ensure compliance and help achieve positive outcomes that satisfy both the customer and the company.

Debt Collection Technology
What is Debt Collection
How to go about Debt Collection

How to go about
Debt Collection

There are different debt collection strategies depending on the type of debt it is, however, the general process is the same.

It starts with the company sending an initial notice to the customer who is in arrears. If there is no response within the required period and after repeated attempts to collect payment, a debt collection agency will be brought in to recover the debt.

For the best results, the debt collection agent involved needs to gauge the financial state of the customer and how to proceed. This might be, for example, putting a payment plan in place.

Debt Collection Regulations and Data Security

Companies are bound by legal obligations regarding debt collection which are similar in most EU countries and the UK. Some examples include:

  • Creditors cannot contact family members or employers about a person's debt.
  • They can’t misrepresent themselves as a higher authority and falsely say they can enforce payment.
  • They can’t be deceptive about the amount owed.
  • Threats of violence, intimidation or harassment are forbidden.
  • You have the right to question/dispute the debt
  • Creditors can only contact a person during certain hours, e.g. between 8:00 – 21:00; not on a Sunday or public holiday (country specific regulations).

All companies have to be vigilant about data security and strictly adhere to any regulations that govern this area, and particularly, a debt collections platform needs to conform to these security standards.

Debt Collection Regulations and Data Security

Automated Debt Collection with Conversational AI Technology

With the advances in conversational AI technology, debt collection is becoming more effective. More than half the customer engagement can be completed by an AI chatbot or digital assistant that can deal with most of the straightforward questions, such as ID and verification, account balances, etc.

Automated debt collection boosts agent productivity as each agent can now deal with multiple customer conversations at the same time. This is enhanced by integrating with other solutions for real-time data about a customer.

Since it is conversational, it can be done in a less aggressive way as it allows for two-way messaging with customers. Furthermore, advanced AI models in debt collection software can recognise context and a customer’s intent which informs how best to relate to a person as an individual - if debtors feel understood, the outcome is more positive.

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Customer Connections

The new conversation rules for Credit, Collections and Payments

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Make Debt Collection Easier by Being Customer-Centric with Self-Service

Hyper personalisation puts the customer at the centre of the conversation. In terms of debt collection, this means making the process struggle-free.

According to the Benchmark Study by Intelligent Contacts, 96% of people in debt would rather start on a payment plan than wait until they have the full amount to pay all at once. So, you must make it easy for the customer to pay, and this means offering them digital self-service, payment plans, easy payment methods and a smooth user experience.

Unsure about using technology? Don't worry, we'll guide you every step of the way

More about Debt Collection

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METRICS WE’VE ACHIEVED

52%
Uplift in Payment Arrangements
42%
Increase in Agent Productivity
57%
Decrease in Operational Costs
48%
Increase in Customer Engagement

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