Learning Situation

Collections Help Guide

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Objective

To handle customer past due accounts professionally, using effective communication to increase the likelihood of payment, while maintaining a positive relationship with customers.

Key Principles

• 1. Be Prepared and Confident: Know the customer’s situation, review account details, and anticipate common excuses.
• 2. Control the Conversation: Guide the discussion towards the purpose—collecting the payment.
• 3. Use Open-Ended Questions: Encourage the customer to think of solutions and alternatives.
• 4. Maintain a Positive and Professional Tone: Be empathetic, yet firm, ensuring the customer understands the urgency without feeling overwhelmed.
• 5. WIIFM (What's In It For Me) for Customers: Always offer reasons why paying now benefits the customer, e.g., avoiding further interest or collection escalation.

Call Introduction

Collector: "Hi, may I please speak with [Customer’s Name]?" Customer: "Yes, this is [Customer’s Name]." Collector: "Hello, [Customer’s Name], this is [Your Name] from [Company]. Our calls may be monitored for quality assurance. Our records show your loan payment is overdue by [Days] days. The total amount due is [$X], and payment is required by today. Can I expect you to make the payment today?"

Request Full Payment

Collector: "We require the full amount of [$X] by the end of the day. What time between [X] and [Y] can I expect you to come in and make the payment?" Pause & Listen After the request, allow the customer to respond. Listen carefully for clues about their financial status and willingness to pay. The response will help shape the next steps.

Active Listening

Active listening is a communication technique where the listener fully concentrates, understands, responds, and then remembers what the speaker is saying. As an agent, this means giving your full attention to the customer, not just hearing their words but understanding their emotions, concerns, and needs.

Why It's Important?

Key Elements of Active Listening

Focus on the Speaker: Avoid distractions and be present in the conversation. Acknowledge: Use verbal and non-verbal cues like nodding or saying "I understand." Paraphrase: Summarize the customer's message to confirm understanding. Ask Clarifying Questions: If something is unclear, ask questions to get more details. Empathize: Show that you understand the customer's feelings by using empathetic phrases like “I can see how that would be frustrating.”

Acknowledge the Customer's Situation

Action: Listen carefully to the customer’s reason for not being able to pay. Why: Acknowledging their situation builds rapport and trust, showing the customer that you care about their situation and are willing to help. This fosters a more cooperative relationship, increasing the chances of finding a solution. Example: "I understand that you're going through a tough time right now. Let’s see how we can work together to figure this out."

Identify Problems

Out Of Town

Can't Make It During Business Hours

No Money Until Next Payday

Unexpected Bills

Loss of Income/Job

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Loss of Income/Job

• WIIFM: Avoid further late fees and interest; we can explore alternative payment options. • Rebuttals: o "Have you applied for unemployment? Any other income sources?" o "Let’s work on a payment plan that fits your current situation." o "Can anyone help you with a small amount today to avoid extra interest?"

Unexpected Bills

•WIIFM: Prioritize your loan to avoid higher costs later. • Rebuttals: o "Could you set up a payment arrangement with another bill to free up money for this payment?"

No Money Until Next Paycheck

• WIIFM: Pay a smaller amount today to reduce the impact of accruing interest. • Rebuttals: o "What other bills can wait until your next pay period? Let’s see if we can rearrange your priorities." o "We need at least a small amount today to avoid escalating the issue."

Can’t Make It During Business Hours

•WIIFM: Avoiding further complications by making an card or ACH payment. • Rebuttals: o "We offer ACH payments or card payments." o "Can someone else bring in your payment if you can’t make it?"

Out of Town

• WIIFM: Electronic payment is quick and convenient, ensuring you avoid late fees. • Rebuttals: o "We can process your payment electronically. It’s free, and you can avoid further interest." o "Can someone else come in and make the payment on your behalf?"

Reaffirm the Consequences of Non-Payment

Action

Gently but clearly explain the negative consequences of non-payment, such as additional interest, penalties, or escalation to higher-level collections.

Why It is important for customers to understand that delaying payment can make their situation worse. Knowing the consequences can push them to make a payment or at least set up a plan.

Example

In Conclusion

• Be Firm but Respectful: Customers respond better when treated with empathy, but they also need to understand the urgency.• Use Open-Ended Questions: These questions encourage the customer to think of a solution. Example: Instead of asking, "Can you pay today?" say, "What can you do today to make at least a partial payment?" • Stay Persistent: Always follow up if a payment is not made. Assume each call could lead to a solution.

Builds Trust: When customers feel heard, they are more likely to trust you and the company.Resolves Issues Faster: By understanding the root of the problem, you can offer more effective solutions. Reduces Miscommunication: Active listening ensures both you and the customer are on the same page, avoiding misunderstandings. Improves Customer Satisfaction: Customers leave interactions feeling valued, leading to a more positive experience. De-escalates Tension: When customers are upset, feeling heard can calm them down and lead to a more productive conversation.