Tech, Talk, Customer Treatment are Key to Collections

Getting in touch with overdue borrowers has always been challenging for auto lenders. But that task is tougher, as more people cut their telephone land lines.

So in today’s mobile society, how do lenders go about reaching customers who probably don’t want to be contacted? It takes a combination of improved technology and a bigger focus on customer service, according to lenders who do their own collections.

“You have to be innovative and explore new technologies and integrate those new technologies to contact members,” says Kate Himes, vice president of asset recovery at Security Service Federal Credit Union in San Antonio. “As more individuals move away from land lines, organizations need to look for other avenues to service their members, via secured messaging, online or mobile services and 24/7/365 banking.”

Even more important is how borrowers are treated, both at the outset of a loan, and when and if they run into difficulties, experts said.

“The key to successful resolution requires a collaborative effort between our members and employees, to reduce, or eliminate where we can, any confusion,” Himes says. “We work to get our message out that we are here for our members and have assistance and services to help them.  We understand some may be nervous and don’t know what to do. They just need to give us a call.”

Natalie M. Brown, vice president of consumer lending communications at Wells Fargo, agrees that the message is almost as important, if not more so, than the medium.

“We want to help our customers succeed financially, and our customer servicing team listens closely to customers when they face payment challenges in order to try and find solutions,” she says. “We are available by phone, mail and alternative contact channels so that we can work with our customers.”

Himes at Security Service, one of the 10 largest credit unions in the country, says starting the collections process early is also important in staying on top of delinquent customers, before things spiral out of control and the borrower avoids contact. Security Service starts the collections process when the loan is 10 days past due, sending out a “friendly” reminder.

“The biggest thing we want to do is educate our members,” Himes says. “Sometimes they don’t realize they are past due. We want to make sure we get that information out to them so they can avoid any late fees or any possible impact on their credit.”

Experts said that sometimes, borrowers make a concerted effort to avoid phone calls and letters. When that happens, the only choice may be to go out and contact them in person, the old-fashioned way.

Jay A. Loeb, vice president of strategic business development at National Creditors Connection Inc., a field contact services firm based in Lake Forest, Calif., said many lenders have gotten away from that type of outreach strategy themselves, but it can be outsourced.

“We are successful because we don’t deal with phone calls and letters,” he said. “We go right to the borrower’s door at dinner time. It’s difficult for the borrower to avoid that.”

Justin Leach, public relations manager at Toyota Financial Services, says the best collections strategy of all is getting the customer into a loan he or she can afford in the first place. He said, “We are very conscientious about putting customers into vehicles they can afford.”