The changing face of debt collection

Merci Kinahan is Collections Manager at StubbsGazette. She talks about her job and the particular challenges her department faces in the aftermath of the economic bust.

Merci, can you tell us about your experience and background. What changes have you seen in collections over the years?

For the past 15 years I have worked in both legal and non-legal debt collection.  Over the years I have worked with many industry sectors including, the Revenue Commissioners, hospitals – both private and public. I have worked with semi-state bodies, financial institutions, corporate and the consumer market. 

I have seen a lot of changes over the years but none so fast as in the past few years. The greatest changes have been in the attitude of debtor to the collections process and payment, together with a new willingness of most clients to accept a payment schedule in order to facilitate the debtor’s financial situation.

Don’t underestimate how important this is when it comes to recovering bad debt. I would go as far as say that most debts are now paying by payment plan and most clients are willing to accept payment in this manner.

Are client expectations realistic in the current environment?

Let’s be clear – creditors have every right to try and recover what is due to them. StubbsGazette’s loyalty is always to our client and where possible to recover debts in full and in one lump sum.

However, collecting a debt in one lump sum is becoming increasingly difficult simply because the money is not there in so many cases.
 
Businesses are in distress, consumers are in distress, many, many people are unemployed and finding it hard to make ends meet.  Therefore, expectations need to be realistic and it may be necessary to rethink what you will and will not accept in relation as to how the debt is recovered. 

It is important that a debt recovery agency is able to recognise and ascertain in most cases if a debtor is in a financial position to discharge the debt or if it is a genuine case of hardship. You may well ask “How is that possible?” Well, it takes training, experience and asking the right questions.

To be fair, in most cases debtors are reasonably honest with regard to their financial situation. Holding debts no longer carries the stigma that it once did and people no longer feel embarrassed that people know their financial situation. Indeed, in recent times many end up telling us in great detail about their financial difficulties. The general attitude now is “Who doesn’t owe money?” – and that’s understandable when so many people are in the same boat.

Unfortunately, this attitude can be a positive or negative thing in so far as recovering a debt goes. On the positive side, for those of us in the collections business it means that people are more open when speaking to us and this gives us a better insight into how the debt can be recovered. 

What techniques do you use to optimise the collections process

StubbsGazette analyses all new debt and as Debt Collection Manager this is my responsibility. These debts are often assigned a treatment plan suitable to the value and background of the debt. The treatment will depend on a number of things such as the value of debt, the age of the debt and whether the debt is corporate or consumer. This is necessary in order to afford the agent the best opportunity for recovery.

If I feel that a debt may require a different route due to the background of the debt or that the client may need some advice on the best course of action I will call the client and enter into further discussion. This might be about taking legal action/winding up petition and so on. The discussion might also consider taking a settlement offer in order to get a quicker resolution.

Once a decision is made on how the debt should be handled the debt is then assigned to one of my agents who will upload the file onto our specialised computer system S-CAS.  S-CAS is a bespoke debt collection software that captures all movements on a recovery file. Real-time information is recorded and is available to our clients by using a unique username and password. This system offers clients full transparency on the collections we are undertaking on their behalf via our S-CAS web portal.

I am a firm believer in our collectors developing a relationship with our clients and therefore, once a client is assigned to an agent they will deal with whatever debts that client has. Each agent is responsible for reporting directly to their client and this is closely monitored by me.    Weekly team meetings are held to discuss any issues that may arise. I also meet with individuals one a month. I believe that this is important for the wellbeing of the agent given the nature of their work. 

Once a debt is uploaded to our system a Stubbs Demand Letter is sent to the debtor and within a 3-4 day period the agent responsible will commence phoning the debtor. 
In many cases, depending on the debtor’s circumstances, it may be necessary to negotiate a payment plan or stage payment based on the debtor’s financial situation. For debts of a high value it may be prudent to speak with the client about offering a settlement. Once a settlement is offered our policy is that it must be discharged in full within 5 working days. 

If a payment is missed the agent is notified by the S-CAS system. The agent will then make immediate contact with the debtor to rectify the situation. It is vital that immediate contact is made with the debtor at that point so that they are fully aware that we mean business in relation to recovery of the debt.

In some cases a debtor may point blank refuse to discharge the debt so, under those circumstances, if the debt value warrants it we may suggest legal action. 
StubbsGazette works closely with Eames Solicitors who have a high profile in relation to legal debt collection.  

What kind of skills are necessary to discharge the collections role effectively?

Working on a debt recovery call centre is totally different than working on a general call centre such as mobile networks support or general customer service.  For obvious reasons, staff must be highly skilled and equipped to deal with many difficult situations. More so at the present time when people are stressed, depressed, and under tremendous pressure. Training is a vital part of our everyday life in collections and serious resources are invested to ensure that agents are equipped to handle all situations. It is also important for the wellbeing of our staff.

Prior to working in our collections department all staff go through an induction course. This is necessary to deal with such issues as data protection, code of conduct and work ethics. They also have rigorous training both on call handling and the S-CAS system. This normally takes a week and only then are they allowed to participate as an agent. 

There is then a period where they are assigned a mentor who job it is to monitor calls (all calls are recorded) and generally take the new kid on the block under their wings. This of course is closely supervised by myself. I am very much a hands-on manager and sit among my staff so very little gets past me!

I don’t have to tell you that working in debt recovery in the present time is a tough job at the best of times, and whether we like it or not part of our job is to listen to people, and that invariably means listening to their troubles. On any giving day we have to deal with depression, temper, abuse, anger and it is essential that staff are equipped to deal with all of these emotions.

Do you think the circumstances people are in today are exceptional?

You could not be in a business like StubbsGazette without been fully aware of the financial burden that many people are experiencing at this time. 

This is the case at all levels. If I had a penny for every time I go to visit a client or prospective client who say to me “Ah, sure Merci he has plenty of money he drives around in a big car, or he lives in a big house.” Believe me on many occasions when you speak with these people and hear the real story it often paints a very different picture. So what I am saying is that it is not always possible to ascertain the financial situation of someone by what you see on the outside.

Whether we like it or not right across the board people are under extreme pressure to such an extent that many do not know where the next meal is coming from for their families, how they are going to pay their electricity bill and so on.

We hear these stories ever day of the week in our job and it is important to us that each and every member of our collection staff is equipped to deal with this. Which is why we have recently organised together with the HSE to run a one day workshop on Suicide Awareness on June 5th at the Clarion Hotel in Liffey Valley. This is essential for any organisation who have staff dealing with debt recovery on a day-to-day basis and I would highly recommend that you give it consideration. It is important that staff are equipped to handle the various types of situation that can occur and that they have proper training to do so.

I’m always happy to help colleagues in other organizations who have question or need advice with regard to debt collection or the legal process – just give me a call at StubbsGazette. 

More details on the Suicide Awareness workshop are available at stubbsgazette.ie.