2007 masfsa annual conference collections 101 moderator: presenter: chris nye, director of training,...

2007 MASFSA Annual Conference

COLLECTIONS 101Moderator:

Presenter:Chris Nye, Director of Training, ARM Recoveries

NCO Financial Systems, Inc.


COLLECTIONS 101

Chris Nye

NCO Financial Systems, Inc.


ROLES

• As a collector, we have to play many different roles!

– Financial advisor– Counselor– Sales person– Psychologist– Coach


TEN STEP Collection Process(Third Party Perspective)

• Opening the call• Listening to the

borrower• Acknowledging• Asking Questions• Verifying

Demographic Information

• Money Sources• Resolutions• Negotiations• Words• Closing the Call


Opening The Call

• Identify Borrower• Identify Yourself• FDCPA

- Mini-Miranda- Debt Collector Disclosure- Thirty-day Validation Period

• State the Purpose of the Call• Request PIF• Pause


Listening to the Borrower

• Listen to what the borrower has to say.


• Many collectors lose the phone call and payment by not listening to what the borrower has to say- Be professional with the borrower.- “Attack the debt, not the debtor.”

• Find out what motivates the borrower.- Concerned about credit history- Concerned about not paying back the federal

government- Wants to stop annoying collection calls and letters.



• By listening to a borrower a collector finds out what their current situation is.- ”I don’t owe the money because I have never attended the classes.”- ”I am currently unemployed.”- ”I thought my parents were going to pay for my education.”- ”I didn’t know this was a loan, I thought this was a grant.”

• Remember – “attack the debt, not the debtor.”



• By acknowledging the situation the borrower feels like their side of the story is being heard.

• This is the first step to building a relationship or a rapport with the borrower.- ”I understand what you are saying. I have talked to many people in a similar situation and here is how I helping them resolve it…”- ”I understand what you are saying and there are

programs available to help get this resolved.”

Acknowledging


• We have to verify and update our records to make sure we have correct contact information for the borrower.

- Home phone number- Work phone number- Other contact phone number (cell phone)- Address- Place of employment- Marital status- Number of dependents- Rent or own- Utilities

Verifying Demographic Information


• By acknowledging the situation, the door is open for the collector to start asking questions.

Asking Questions


• Collectors must ask open-ended questions in order to receive information

- ”Which bank holds your checking/savings account?”

- ”How much equity do you have in your home loan?”

- ”Who or what source are you going to borrow the money from?”

- ”How much do you have available on your visa or master card?”

- ”Which institution holds your 401k?”

Asking Questions


• The point of asking the open-ended questions is to verify money sources.

Asking Questions


• Credit Cards – Consumers can pay with a Visa or MasterCard including debit cards with the Visa or MasterCard logo. They can also get a cash advance on all types of credit cards. They may also obtain balance transfer checks from credit card companies as well.

• Checking and Savings Account – The consumer may have money saved in their checking or savings account and would be able to give an immediate payment on the account.

Money Sources


• 401K, stocks and bonds – many people forget that they have 401K, stocks and bonds. These are great sources of funds.

• Relatives and friends – the consumer may be able to borrow from friends or relatives in order to keep a good credit reputation.

Money Sources


• Employers – some employers are willing to advance money to their employees. The employer may co-sign for a loan for a long-term employee, or be willing to advance salary.

• Spouses employment– the spouse income is another great source of income to suggest. The consumer may say that they have no job, but that does not mean that the spouse is out of work.

Money Sources


• Vacation pay – some employers allow their employees to cash their vacation time in for pay. This could be a week to two weeks pay toward the debt.

• Banks and credit unions– many people can obtain a loan from the bank/credit union. If they already have a loan, they may not realize that they can refinance the note up to the amount of the original loan to obtain additional money.

Money Sources


• Loan company – the consumer may be able to consolidate already existing loans and get enough money to pay off the account.

• Insurance policy – many people have built up a good size cash value on their insurance policies. They can borrow money from their policy at a very low rate of interest.

Money Sources


• Deferment of a car payment or mortgage payment – some finance companies are willing to allow the consumer to pay interest only on their loan attaching the principle portion of their monthly payment to the end of the loan.

• Home Mortgages – the consumer who has been paying on a home mortgage for a period of time could re-finance the mortgage to get enough money to pay off debts or obtain a home equity loan/line of credit. They may be able to defer a monthly payment to free up funds as well.

Money Sources


• Order of business– PIF/BIF--same day urgency CASH!!!

– Compromise – if applicable per client

– Consolidation/Rehabilitation• Counseling and working with the borrowers to see if a consolidation or rehabilitation program fits their situation.

Resolutions Tools


– PPA (Partial Payment Arrangement)

• Large down payment size

• Weekly/Monthly arrangements based upon down payment size

• Revisiting arrangements in the future

Resolutions Tools


• Always generate an offer using the proper order of business

• We are the professionals and we will have to explain to the borrower what is required

• Setting deadlines for repayment options based on the order of business

• Creating a sense of urgency and importance of payment with voice tone and wording

Negotiation Time vs. Money


Words

• Positive Words

NowTodayImportantWillAbleConfidentPleaseThank you

• Negative Words

MaybeCan’tDon’tWon’tUnable


• Confirm what the arrangement is going to be

• Receiving urgency payment with secure funds.

• Setting up rehabilitation or consolidation• Getting a second voice on the call if

necessary from a supervisor

Closing


Communication

Effective Communication Techniques


Effective Communication

• Identify the type of communication needed for each situation– Educating – Assertive – Direct– Partnering– Consistent– Understanding– Reassuring– Complimentary


Effective Communication

• Pay attention to tone and content• Use open ended questions• Work with the borrowers as opposed to against

them• When in doubt don’t say it• Deal with the facts only• Don’t say or insinuate anything that is false or

misleading• Probe for information to qualify the borrower

“Remember, it’s not only what you say but how you say it”


THANK YOU!

Please be sure to complete your conference evaluation forms after the

conference!

2007 masfsa annual conference collections 101 moderator: presenter: chris nye, director of training,...

Documents

borrower slide

masfsa annual conference

borrower acknowledging

demographic information

openended questions

similar situation

current situation

correct contact information