To help cure delinquencies, care is king
Improve your collections communication strategy to provide compassionate member support while mitigating your credit union’s risk.
Today’s economy is not a forgiving place. With high inflation and interest rates, it can be challenging for members to manage even small expenses, let alone costly bills like auto loans and mortgages. Cox Automotive recently reported that 1.89% of auto loans were severely delinquent. MAISY states, “U.S. seriously delinquent mortgages are predicted to jump from 0.5% at the end of 2022 to an estimated 1.13% by the end of 2023.”
Times are tough, and some members will need to catch up financially. It happens. That does not mean it is easy for members to admit when it happens to them. And whether it is due to pandemic support ending, the price of gas, or how much it costs to make an omelet lately, one thing is sure: We could all use a little tenderness right now, especially your members.
Remember that they are not the problem; their financial predicament is, and it is up to credit unions to provide solutions. Here are some ways to improve your collections communication strategy to provide compassionate member support while mitigating risk for your institution.
Digital communication is key for collections
Developing a communication strategy incorporating text and email is a smart way to improve collections efforts on past-due accounts. It also shows that your credit union is committed to providing outstanding service to your members.
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