Toyota Financial Services is seeing results from a year-old “collections treatment optimization” (CTO) program that uses more sophisticated analysis of consumer payment behavior over time, to head off serious delinquencies before they happen, the company said.
The program also assesses which consumers can be offered extensions or other loan modifications, without undue risk to TFS, according to Chief Financial Officer Chris Ballinger. “It’s all around modeling, forecasting, and collections and payment optimization,” he told AFN in a recent interview.
Ballinger said in its first year, the CTO program helped keep an estimated 6,000 customers in their cars who otherwise might have defaulted and had their cars repossessed. The program also helped an estimated 50,000 delinquent customers get current on their loans fast enough that their credit scores were not hurt, TFS said.
The CTO program helps the captive decide how quickly to contact an individual customer with a payment reminder. Last week, TFS won one of Fair Isaac Corp.’s annual Decision Management Awards, for its CTO program.
TFS said the program saved money because it reduced operating expenses for collections, and allowed the company to avoid adding headcount, even though the TFS portfolio of more than 4 million customers grew by 9% at the same time.
