Glossary of Terms for Automated Debt Collection

debt collectionWe have pulled together a glossary relating to conversational AI for customer engagement and debt collection.

   

Agent Handling Time
The amount of time an agent spends on each call.  

Artificial Intelligence (AI)
The ability of a computer to perform with human-like intelligence to perform tasks and solve problems.
  

Automated Debt Collection
Using technology, particularly AI-driven tech, to manage the collections process.   

Bad Debt
Usually refers to balances written-off.  

Behaviour Score
A score that predicts the likelihood of a Collection account curing.  

Blended Customer Engagement
Automated AI chatbots carry the bulk of the customer conversation load and hand over to live agents as needs be.  

Bot
Series of steps that are configured by users with routes set by logic rules.    

Chatbot (AI chatbot)
A program that uses AI, Natural Language Processing and Machine Learning to automate human-like conversations with people.  

Collections
Account is mildly in arrears or overdrawn. Most of these accounts “cure”.  

Commission Rate
The percentage of payments collected charged by a Debt Collection Agency.  

Connect Rate
The percentage of answered calls per dial attempt.  

Contact Rate
The percentage of customers contacted.  

Conversational AI
Uses AI-powered chatbots, Natural Language Understanding, Machine Learning and intent recognition to have two-way conversations in authentic sounding language.  

Conversational Customer Engagement
Using conversational AI technology to interact with customers across multiple digital messaging channels.  

Conversational Messaging/SMS/Texting
Two-way, AI-driven conversations with customers using digital messaging channels, such as WhatsApp and SMS.  

Cognitive Computing
A group of technologies, for example, AI, Machine Learning and Natural Language Processing, that aim to make computers think and interact like humans.  

Cure Rate
This is the percentage of Collections accounts that pay the overdue amount in a given month.  

Customer Self-Service
Customers using interactive technology, e.g., with conversational AI chatbots, to carry out tasks online without the need for human help. Self-service is often through a cloud-based self-service portal.  

Debt Collection Agency (DCA)
DCAs recovery debt owed on behalf of the creditors. They can recover debt for a percentage of the sum recovered or they buy it at a lower value and keep the full amount recovered.  

Debt Sale
The act of selling a portfolio usually post write-off.  

Default Typically
A Default Notice is sent at three payments down on financial services accounts followed by a termination notice.  

Delinquency Bucket
Buckets are usually 30-day cycles. So, a one payment down account would be in the 30-day bucket, a two payment down would be in a 60-day bucket, and so on.  

Digital Debt Collection
Using integrated conversational AI through digital messaging channels to engage customers regarding their debt.  

Forward Flow Used in Debt Sale
This provides for a monthly sale of debt to a Purchaser on specific terms rather than a one-off portfolio.  

Engagement Rate
The metric that measures the number of customers actively interacting with a company relative to its total number of customers.  

Entity Gathering
Using AI to recognise and pick out specific details within a larger context, e.g. recognising a date within a text paragraph.  

I&E
A detailed listing and sum of the customers Income and Expenditure.  

Intent Recognition
Uses Machine Learning and Natural Language Understanding to know what a person is saying and wanting to achieve in a text/voice message, and then responding accordingly.  

Liquidation Curve
A chart showing a timeline of percentage recovery per portfolio.  

Liquidation Rate
See Recovery Rate.  

Natural Language Understanding
A natural language is a human language. NLU analyses unstructured text or speech and transforms it into a machine-readable format.  

Natural Language Generation
NLG is how a bot replies to humans. It uses Dialogue Management to create a response from its understanding of what is being said (intent recognition).  

Natural Language Processing
NLP is the two-way communication between human and bot (NLU +NLG=NLP). The bot correctly interprets the human language and then responds in a meaningful way.    

Machine Learning
Algorithms use large data sets to learn and then predict outcomes. The learning builds up and accuracy improves over time so the program can perform tasks without specific instructions to do so.  

Multichannel Messaging
Using multiple digital messaging channels to communicate with customers. Examples: WhatsApp, SMS and Messenger.  

Past Due
Account in arrears  

PIF
Paid in Full

Plaintiff
The Lender or company owed money. 

P.P
Promise to Pay. Also PTP or P2P. 

Pre-Collections
Doing some work on a delinquent account before it enters the Collection process.  

Pre-Delinquency
Trying to forecast potential delinquent accounts and actioning accordingly.  

Propensity to Pay
The likelihood that someone will pay.  

Provisions
Sometimes called “impairment” this is the budget in the P&L account of institutions for likely bad debt.  

R.P
Repayment Plan set to resolve arrears over time.  

Recovery
Accounts that have been through Collections, then defaulted, and are now subject to more serious recovery activities.  

Recovery Rate
When an account reaches Recovery, this measure calculates what percentage of the Recovery balance is eventually collected.  

Repossession
The action of taking back a secured asset, e.g., house, car, phone, etc.  

Roll Rate
This measures the percentage of accounts that “roll” from one down to two down to three down, etc. It is helpful in forecasting both impairment and capacity planning.  

Score
A score that predicts the likelihood of a Recovery account paying.  

Sentiment Analysis
The process of identifying the attitudes and emotional tone in a text using Natural Language Understanding. 

Skip Trace
These are accounts where the debtor has moved address and “forgotten” to advise the creditor of their new address.  

Spin Rate
The number of times an outbound list has been called.  

Tee-Up
A campaign that is sent from a brand name and informs the end customer that they will soon receive a message from a mobile number that they will be able to reply to.  This increases the engagement rate.  

Termination
The formal act of terminating an account following a default notice. This is a short letter advising closure.  

Utility
Usually refers to the percentage of an agents or departments time that is spent on “productive” work – usually 80 to 85%. 

Written Off
When an account has been through all the necessary activity, both internal and external, and is written-off as bad debt. 

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