Bang for the Buck: Efficiently Training and Motivating Collectors

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Debt collection, like any other business, has a skill set.  Not everyone is born with the proper skills and mindset that make an effective collection professional and even those who do have the right mix of mental and emotional attributes still require training.  Many collection agencies – especially smaller shops – struggle with staff turnover and the sense that they waste hundreds of hours and untold amounts of money and resources training collectors who then leave the industry shortly thereafter.

Typically, this sort of turnaround can be traced right back to the training the collectors are given.  Here are some simple suggestions to reduce staff turnover and make sure you’re getting the most ‘bang for your buck’ when it comes to training and motivating your collection staff.

·              Educate.  Training can’t simply consist of handing your new hire a stack of documents to read and sending them on their way.  An effective collector has to know the laws of your area and the policies and culture of your company.  Take the time to educate them.  It will pay dividends.

·              Foster Communication.  Collections can be a competitive field, and offering rewards for volume is always a good idea.  But you can’t allow your collectors to become solo agents, cut off from each other.  Weekly meetings where communication is encouraged are essential, as your collectors can learn from each other’s successes – and failures.

·              Keep Goals Realistic.  Setting goals for your collectors is a tried-and-true motivational tool, but you have to make these goals individual and realistic.  Tailor goals to the collector’s experience, prior record, and personality.  A little stretching is good, but a goal that is absolutely unreachable doesn’t motivate, it depresses.

·              Talk to Your Collectors.  Getting them to discuss business between themselves is good for education and shared experience, but you should make sure you touch base with your staff and make them feel valued, as well as to review their load and advise them on tactics and where they may be going wrong.

A motivated staff will clear more paper; it’s a simple fact of life.

Even More Reasons to Work with a Responsible Collection Firm

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There are plenty of reasons why choosing to work with a responsible collection firm is a wise decision. Not only are responsible collection tactics less distasteful than the “thug tactics” employed by many collection agencies, but relatively respectful collection tactics are more likely to produce favorable outcomes with your debtors as well. There’s a third, even more important and even more practical reason to choose a collection agency that does NOT utilize inappropriate tactics- there are laws against the most common debt collection harassment tactics.

At a very base level a collection professional needs to be polite and respectful to the debtors they speak with. Collection agents aren’t allowed to bully or otherwise act in an excessively rude manner to the debtors on their lists. While a collection professional isn’t likely to be reported if they speak in a manner a debtor considers “rude” or “disrespectful,”such a manner will hurt your case if your debtor’s account goes to court.

One of the most common forms of harassing behavior utilized by debt collectors is a continuous string of phone calls at inappropriate times. Now, there’s nothing wrong, illegal or immoral about calling a debtor about the money they owe. But legally speaking a collection agent can only make these calls during a range of hours that have been clearly defined according to state and federal law. The laws dictating when a collection agency can call a debtor differ from state to state, and if an agent repeatedly makes calls during prohibited hours they can be sued for harassment.

Harassing behavior does more than simply lower the chances you will collect from your debtors- it gives your debtors legal ammunition to use against you. 

Taking Responsibility as a Collection Agency

Collection agencies don’t always have the best reputations, and often with good reason. Many collection agencies utilize a whole suite of underhanded and downright immoral tactics in their quest to receive payment on their accounts. While tenacity is certainly a good thing in the world of debt collection, there’s no need to resort to unsavory tactics in order to close a case. Any collection agency that resorts to harassing, bullying, and applying negative pressure to their debtors is simply proving their lack of expertise in this admittedly challenging field.

Most lenders would prefer to collect from their debtors without their collection representative resorting to these sorts of tactics for a couple reasons. The first of these reasons is moral in nature- most lenders don’t want to be associated with a collection agency that uses tactics they consider underhanded, manipulative or actively insulting.

Yet there is a very good reason why a collection firm shouldn’t resort to acting in such a negative manner- thug tactics rarely work. The more a collection agency attempts to “squeeze” or threaten their debtors, the more that debtor will take increasingly drastic measures to avoid their financial responsibilities. A hefty loan is distressing enough on its own for debtors. Once you add on the constant threats and acts of harassment utilized by some debt collectors you create a negative situation of truly overwhelming proportions.

Considering the fact bullying collection tactics are both distasteful and ineffective, it’s surprising so many collection agencies continue to utilize them. The reason why most agencies stubbornly persist with these tactics is simple- they don’t know any other method to try out. Most collection agencies simply don’t have the training, the experience, or the imagination necessary to figure out a more effective, and less distressing, mode of closing their cases. 

Frequently Asked Collection Questions (Part 1)

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Q. IS YOUR LAW FIRM AND AGENCY BONDED, INSURED AND LICENSED?

A. The law firm is licensed to practice law in the state of GA and TN. We also have collection agency licenses in all states that require attorneys to be licensed as a collection agency. The Law Offices of Ross Gelfand, LLC has a $3,000,000 aggregate errors and omissions policy through Minnesota Lawyers Mutual -Policy #8199-03. We also have a $500,000 fidelity bond and a $1,000,000 business liability policy through Hartford Insurance --policy #20 SBA TQ2184.

Q. WHAT IS YOUR SUCCESS RATE?

A. Our most frequent question is "Will you be able to collect my money?" Everyone wants someone who can say "YES". We believe that if anyone can collect, we can. Because our business is debt collection and we are a national law firm, we collect more money, more often than most other third parties! Furthermore, our state of the art software as well as our highly trained collectors and paralegals make our success ratio higher. Our success rate depends on many things and even before we investigate and attempt your case, we can get a good idea of collection prospects. Certain cases, for example, are highly collectable while others have a low collection percentage.

High probability of collection success is often indicated by:

1. very recent debt; and/or 

2. lavish life style of an individual debtor; and/or 

3. operating businesses; and/or 

4. excellent credit history; and/or 

5. occupational or professional licenses of debtors; and 

6. generally stable history; and/or 

7. supportive family; and/or 8. strong financial statement or substantial asset ownership; and/or 

9. history of reliance on obtaining credit; and/or 

10. debts under $75,000.

A lower probability of collection occurs in cases that are:

1. very old; and/or 

2. against corporations that are out of business; and/or 

3. against outright thieves, like those in jail or who are being chased by law enforcement; and/or 

4. against those who have or will be filing for bankruptcy protection; and/or 

5. against those people whose lifestyle tends to indicate no assets now or in the future, such as alcoholics, drug abusers, chronic gamblers, those chronically on welfare, the terminally ill; and/or 

6. huge debts; and/or 

7. large IRS tax liens.