Adapting your credit union’s collection approach to a post-pandemic world
As we come out of the COVID-19 pandemic and continue to adapt to changing economic conditions, it is difficult to predict when, or how quickly, a member’s financial picture will recover. Even after rounds of stimulus payments, industry experts suggest that credit unions will continue to see inconsistent payments from members with delinquent accounts. Aite Group’s recent annual survey of the third-party debt collection industry reports that, when looking out to the next six to 12 months, 62% of collectors anticipate more of a challenge. In addition, nearly half of collectors report that major new requirements — such as those concerning business continuity, movement to the cloud for greater flexibility and new security protocols — are on the horizon.
These collection challenges are partly due to governmental agencies curbing collection efforts in response to the pandemic. According to a recent article in The Financial Brand, “Deferral and forbearance programs have delayed the inevitable tidal wave of delinquencies and defaults.” The article stresses that collection departments delivering an exceptional member experience are more likely to be paid first.
A collector’s job is to help members pay off their debts by negotiating a win-win for the credit union and member. The best collector will offer kindness and respect to the member’s financial situation, but will be persistent in working through payment options. In order to do this effectively, a firm grasp on new collection laws and industry best practices is essential, as well as maintaining a trusting relationship with the member.
continue reading »