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Collection Best Practices

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internal and external (credit bureau and public records) data ... Credit Bureau Scores & Attributes. Bankruptcy and Deceased Accounts ... Credit Bureau Reporting ... – PowerPoint PPT presentation

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Title: Collection Best Practices


1
Collection Best Practices
  • COHEAO
  • Mid-Year Conference
  • August 3, 2009
  • 215 300 PM

2
Todays Panel Presentation
  • John Adonnino NCO
  • How to leverage technology!
  • Karen Reddick NCM  
  • Back to the basics in Collecting!
  • Bill Cantalope ERS                      
  • Incentives Culture Changes!

3
How to Leverage Technology
  • Times Have Changed
  • Account Segmentation
  • Scrubbing, Scoring Segmentation Value
  • IVR (Interactive Voice Response)
  • Productivity Measures

4
Times Have Changed
  • Agencies have always utilized automation
    technology.
  • More critical now, than ever, in todays
    challenging economic climate is to utilize and
    leverage all types of automation and technology
    to meet four goals

5
Four goals!
  • Perform Competitively
  • Remain Compliant
  • Operate Efficiently
  • Increase Profitability

6
Account Segmentation
  • Segmentation Proprietary automated tool that
    leverages
  • internal and external (credit bureau and public
    records) data
  • to help predict account repayment probability
    with a high degree
  • of accuracy.
  • Objective - Accounts are sub-grouped based on
    expected
  • recovery rate or unit yield.
  • Segment Treatment Operations management applies
    the
  • optimal treatment for each value segment.
  • Remain in compliance with clients work
    standards.


7
Examples of Sub-Groups in a Segmentation Model
  • High Value
  • Medium High Value
  • Medium Low Value
  • Low Value

8
Scrubbing, Scoring Segmentation Value
  • Integrated into new business load process
  • Credit Bureau Scores Attributes
  • Bankruptcy and Deceased Accounts
  • Provides Detailed Skip Information
  • Cell Phone Identification
  • Preparing for global cell phone purge
  • Currently, flagging and usage determined by client

9
IVR
  • Technology that allows a computer to detect voice
    and keypad inputs.
  • Objective Increase borrower reach. Campaigns
    and message content are centrally controlled and
    consistent to ensure regulatory compliance.
  • Current Usage IVR technology used as both an
    auto-message platform, as well as a method to
    drive authenticated right party contacts to
    collectors, enabling our staff to be more
    efficient and productive.

10
Productivity Measures
  • Employee Metrics
  • Objective Improve financial performance by
    tracking agent level productivity, improving
    accountability and identifying areas of
    opportunities for re-training. Initial focus on
    efficiency (occupancy) and effectiveness (dollars
    collected).

11
Productivity Measures
  • Key Performance Indicator (KPI) Reports
  • Objective - The KPI report allows monthly
    performance tracking by client and segment.
  • Operations Managers can make treatment
    adjustments by each segment as needed.
  • Analysts can monitor the performance of
    segmentation models and adjust / redevelop as
    needed.

12
ADDITIONAL PANEL REMARKS
13
BACK TO THE BASICS
  • CHANGES IN TODAYS BUSINESS OFFICE
  • Failing Economy
  • Freeze in the Credit Market
  • Decrease in Budget/Resources
  • Decrease in Staff
  • Restricting Regulations

14
BACK TO THE BASICS
  • THE EFFECTS OF THESE CHANGES
  • Increase in AR bad debt
  • Increase in Bankruptcies
  • Less Consolidations
  • Increase in Cohort Default Rates
  • Less Perkins to loan out
  • More to do, less to do it with

15
BACK TO THE BASICS
  • STRATEGIES
  • Working Smarter Instead of Harder
  • Utilizing Technology
  • Working closer to FA Office
  • FAFSA
  • Forecasting
  • Clear and Concise Disclosures
  • Payment Agreements
  • Financial Agreements
  • Continue the Consolidation Pipeline-William D.
    Ford
  • Look at rehabilitations
  • Pro Allows borrowers to continue
    demonstrating ability to pay
  • Con Borrowers expectation in getting out of
    default

16
BACK TO THE BASICS
  • STRATEGIES CONTINUED
  • Cash Collections
  • Is payment in full gone
  • Loss of home equity loans and open line of credit
  • Flexible payment plans due to current economic
    conditions
  • Utilizing 3rd Party Servicers More
  • Send accounts out in a more timely manner
  • More Resources
  • Experts in Negotiating
  • Consolidation Gurus
  • Unique Skip Tracing Techniques/Skills
  • Credit Bureau Reporting
  • Utilize your billing servicers for AR Collections
    and other institutional funds

17
BACK TO THE BASICS
  • STRATEGY CONSIDERATIONS
  • Internal collections
  • More Due Diligence
  • More Follow Up On Broken Promises
  • More payment arrangements
  • Reporting to CB
  • Internal skip tracing

18
BACK TO THE BASICS
  • STRATEGY CONSIDERATIONS
  • Collection Agencies
  • Using more than one agency
  • How to find the right agency for your institution
  • Higher Education Experience
  • Bonding/Insurance
  • Licensing
  • Audits
  • Customer Service
  • Technology
  • Education
  • Recovery
  • RFPS
  • Pricing
  • Tracking Stats

19
BACK TO THE BASICS
  • COLLECTIONS AGENCIES DOING MORE WITH LESS
  • Competition and Set Pricing has forced agencies
    to develop techniques that provide better results
    using less time, manpower and expenses.
  • We are able to handle more business with less
    employees due to the technology changes in our
    industry, we are able to do this without
    jeopardizing results.

20
ADDITIONAL PANEL REMARKS
21
Incentives Cultural Changes
  • Todays Collectors vs. Yesterdays
  • It seems as the old saying goes, what goes around
    comes around!
  • With the changes in our industry over the last
    three years collectors of Today are using the
    collectors of Yesterdays techniques
  • Payer Trays Financial Statements
  • Large Down Payments Monthly Payments
  • More Family Involvement

22
Incentives Cultural Changes
  • Alignment of goals
  • Understanding Clients Goals and Objectives and
    how to incent Collectors to achieve the Goals.
  • Collector Incentive Plan.
  • Collection Manager Incentive Plan.
  • Non-Collector and Non-Collector Incentive Plan.
  • Senior Manager Incentive Plan.

23
Incentives Cultural Changes
  • Rewarding without Pay
  • Physical Environment Awareness of a job well
    done Collector Recognition.
  • Total Quality Management Team Work
  • Company Newsletter Recognitions
  • Informing Clients of Performance
  • Daily, Weekly, Monthly Contests
  • Weekly Lunches or Pot Lucks
  • Use your imagination!

24
Incentives Cultural Changes
  • Compensation and Motivation
  • WIIFM or WIIFThem
  • Pay Attention to the people that have the
    greatest impact on productivity. Following-up on
    results is the 1 motivator of people!
  • Share bonuses, incentivize reaching goals. Money
    is the best motivator!
  • Less hourly wages, more commission!
  • Employees are cash driven! They also like to be
    rewarded with Paid Time OFF!

25
Incentives Cultural Changes
  • Hiring Practices with all of the layoffs our
    pool of applicants has changed. More Educated.
  • Security and Background Checks very costly but
    a must, not only to protect customers but also
    fellow employees!
  • Contract Specific Training more demanding
  • Scope of Business understanding what the
    clients want, we are seeing different business
    lines, A/R Private Loans State Loan Programs
    etc.

26
Incentives Cultural Changes
  • Collection Techniques Collection Systems
  • Calling Strategies ( Dialers, Texting, E-mails,)
  • Scoring Models
  • Skip Tracing Techniques Facebook MySpace
    just a few examples.

27
ADDITIONAL PANEL REMARKS
28
QUESTIONS ANSWERS
  • AUDIENCE IDEAS
  • PARTICIPATION

29
EMAIL CONTACT INFORMATION
  • JOHN ADINNINO john.adonnino_at_ncogroup.com
  • KAREN REDDICK
  • kreddick_at_ncmstl.com
  • BILL CANTALOPE
  • bcantalope_at_ersinc.com
  • CARL PERRY cperry_at_progressivefinancial
    .com
  • THANK YOU FOR YOUR ATTENTION!
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