U.S. consumer debt hit $12.84 trillion in Q2 of 2017, with delinquent debt reaching $612 billion and seriously delinquent debt — at least 90 days late — rising to $411 billion, according to the Federal Reserve Bank of New York’s quarterly report. In response, many businesses are contracting with debt collection agencies. To produce favorable results, best-in-class agencies monitor, quantify and evaluate three key metrics — performance, scorecards and reports.
Successful collection agencies employ high performing debt collectors who rely on a sound knowledge of relevant federal and state laws, technological literacy, excellent communication skills and tenacity. Comprehensive training programs are critical.
Introductory training reviews current laws governing collections as well as client-specific requirements and company policies, collection strategies, data entry procedures and appropriate responses to consumer disputes. To legally collect, each new collector must sign the ACA International Collector’s Pledge and pass an FDCPA exam. New employees must also perform exceptionally well in mock phone calls to consumers before speaking with the public.
Proven strategies to continue their education include monthly compliance meetings, reviewing performance goals, conducting one-on-one meetings between management and collectors as needed, and providing constructive scorecard feedback. With the right tools in place, agencies can efficiently evaluate overall collection results and individual performance.
Making the Grade with Scorecards
InsideARM defines a collector scorecard as a “summary of a wide variety of collector statistics in a single easy-to-read document.” The performance evaluation tool tracks a number of actions made by debt collectors such the number of calls made and “left messages” over a selected period of time. To calculate the final score listed at the bottom of a scorecard, each action is weighed with a specific value. This “grade” summarizes a collector’s work effort. Scorecards identify both successes and areas in need of improvement by revealing daily, weekly and monthly collection trends. This information is then used for tailored coaching.
To stay competitive within the industry, directors of collections will analyze data from previous and current scorecards on a daily basis to determine future collection strategies that will benefit clients. New strategies and their results are monitored daily and adjusted accordingly.
Additionally, scorecards are used to assess a debt collection team’s performance against “competing agencies working for the same client.”
Debt Collection Reports
Best-in-class collection agencies produce regular reports for clients who are typically provided with 24/7/365 access to online reports. While each agency provides a unique set of reports, common evaluations include:
- Monthly status reports
- Standard summary reports
- Detailed reports on individual accounts
Recurring reports provide transparency between clients and contracted agencies. The assessment tool allows clients to determine the value of an agency while providing agencies with an opportunity to showcase successes.
Internal auditing is invaluable. A systematic approach to performance evaluation by utilizing scorecards, reports and collector performance ratings enhances an agency’s effectiveness, aids in risk management and helps to produce collection results in line with client goals. Businesses with accounts receivables can contract with a high-performing debt collection agency for optimal results.
At Optio Solutions, our successful self-evaluation strategies position us as a leader in the collections industry. Those strategies are seamlessly integrated with full corporate compliance and certification, and the latest data security and technology to deliver consistent brand protection and measurable results.
Our effective first- and third-party collection services are available at affordable rates. Organizations may contact Optio today to discuss how our expertise benefits businesses.