COLLECTIONS 101

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COLLECTIONS 101

• Moderator
• Presenter
• Chris Nye, Director of Training, ARM Recoveries
• NCO Financial Systems, Inc.

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COLLECTIONS 101

• Chris Nye
• NCO Financial Systems, Inc.

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ROLES

• As a collector, we have to play many different
  roles!
• Financial advisor
• Counselor
• Sales person
• Psychologist
• Coach

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TEN STEP Collection Process(Third Party
Perspective)

• Money Sources
• Resolutions
• Negotiations
• Words
• Closing the Call

• Opening the call
• Listening to the borrower
• Acknowledging
• Asking Questions
• Verifying Demographic Information

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Opening The Call

• Identify Borrower
• Identify Yourself
• FDCPA
• - Mini-Miranda- Debt Collector Disclosure
• - Thirty-day Validation Period
• State the Purpose of the Call
• Request PIF
• Pause

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Listening to the Borrower

• Listen to what the borrower has to say.

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Listening to the Borrower

• Many collectors lose the phone call and payment
  by not listening to what the borrower has to
  say- Be professional with the borrower.- Attack
  the debt, not the debtor.
• Find out what motivates the borrower.
• - Concerned about credit history
• - Concerned about not paying back the federal
  government
• - Wants to stop annoying collection calls and
  letters.

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Listening to the Borrower

• By listening to a borrower a collector finds out
  what their current situation is.- I dont owe
  the money because I have never attended the
  classes.
• - I am currently unemployed.- I thought my
  parents were going to pay for my
  education.- I didnt know this was a loan, I
  thought this was a grant.
• Remember attack the debt, not the debtor.

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Acknowledging

• By acknowledging the situation the borrower feels
  like their side of the story is being heard.
• This is the first step to building a relationship
  or a rapport with the borrower.- I understand
  what you are saying. I have talked to many
  people in a similar situation and here is how I
  helping them resolve it
• - I understand what you are saying and there
  are programs available to help get this
  resolved.

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Verifying Demographic Information

• We have to verify and update our records to make
  sure we have correct contact information for the
  borrower.
• - Home phone number
• - Work phone number
• - Other contact phone number (cell phone)
• - Address
• - Place of employment
• - Marital status
• - Number of dependents
• - Rent or own
• - Utilities

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Asking Questions

• By acknowledging the situation, the door is open
  for the collector to start asking questions.

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Asking Questions

• Collectors must ask open-ended questions in order
  to receive information- Which bank holds your
  checking/savings account?
• - How much equity do you have in your home
  loan?
• - Who or what source are you going to borrow
  the money from?
• - How much do you have available on your visa
  or master card?
• - Which institution holds your 401k?

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Asking Questions

• The point of asking the open-ended questions is
  to verify money sources.

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Money Sources

• Credit Cards Consumers can pay with a Visa or
  MasterCard including debit cards with the Visa or
  MasterCard logo. They can also get a cash
  advance on all types of credit cards. They may
  also obtain balance transfer checks from credit
  card companies as well.
• Checking and Savings Account The consumer may
  have money saved in their checking or savings
  account and would be able to give an immediate
  payment on the account.

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Money Sources

• 401K, stocks and bonds many people forget that
  they have 401K, stocks and bonds. These are
  great sources of funds.
• Relatives and friends the consumer may be able
  to borrow from friends or relatives in order to
  keep a good credit reputation.

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Money Sources

• Employers some employers are willing to advance
  money to their employees. The employer may
  co-sign for a loan for a long-term employee, or
  be willing to advance salary.
• Spouses employment the spouse income is another
  great source of income to suggest. The consumer
  may say that they have no job, but that does not
  mean that the spouse is out of work.

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Money Sources

• Vacation pay some employers allow their
  employees to cash their vacation time in for pay.
  This could be a week to two weeks pay toward the
  debt.
• Banks and credit unions many people can obtain a
  loan from the bank/credit union. If they already
  have a loan, they may not realize that they can
  refinance the note up to the amount of the
  original loan to obtain additional money.

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Money Sources

• Loan company the consumer may be able to
  consolidate already existing loans and get enough
  money to pay off the account.
• Insurance policy many people have built up a
  good size cash value on their insurance policies.
  They can borrow money from their policy at a
  very low rate of interest.

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Money Sources

• Deferment of a car payment or mortgage payment
  some finance companies are willing to allow the
  consumer to pay interest only on their loan
  attaching the principle portion of their monthly
  payment to the end of the loan.
• Home Mortgages the consumer who has been paying
  on a home mortgage for a period of time could
  re-finance the mortgage to get enough money to
  pay off debts or obtain a home equity loan/line
  of credit. They may be able to defer a monthly
  payment to free up funds as well.

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Resolutions Tools

• Order of business
• PIF/BIF--same day urgency CASH!!!
• Compromise if applicable per client
• Consolidation/Rehabilitation
• Counseling and working with the borrowers to see
  if a consolidation or rehabilitation program fits
  their situation.

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Resolutions Tools

• PPA (Partial Payment Arrangement)
• Large down payment size
• Weekly/Monthly arrangements based upon down
  payment size
• Revisiting arrangements in the future

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Negotiation Time vs. Money

• Always generate an offer using the proper order
  of business
• We are the professionals and we will have to
  explain to the borrower what is required
• Setting deadlines for repayment options based on
  the order of business
• Creating a sense of urgency and importance of
  payment with voice tone and wording

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Words

• Positive WordsNowTodayImportantWillAbleConf
  identPleaseThank you

• Negative WordsMaybeCantDontWontUnable

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Closing

• Confirm what the arrangement is going to be
• Receiving urgency payment with secure funds.
• Setting up rehabilitation or consolidation
• Getting a second voice on the call if necessary
  from a supervisor

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Communication

• Effective Communication Techniques

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Effective Communication

• Identify the type of communication needed for
  each situation
• Educating
• Assertive
• Direct
• Partnering
• Consistent
• Understanding
• Reassuring
• Complimentary

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Effective Communication

• Pay attention to tone and content
• Use open ended questions
• Work with the borrowers as opposed to against
  them
• When in doubt dont say it
• Deal with the facts only
• Dont say or insinuate anything that is false or
  misleading
• Probe for information to qualify the borrower
• Remember, its not only what you say but how you
  say it

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THANK YOU!Please be sure to complete your
conference evaluation forms after the conference!