Why Dial-Only Collection No Longer Works

If you are using a dial-only collections strategy, then the method you are using is becoming less effective to collect payment from today’s typical consumer.  There are several reasons for this, and they all boil down to one fact: today’s consumer uses technology in different ways and all of that technology allows for more advanced ways of ensuring privacy.  

Not only do over 20% of people not even have landlines, an increasing number of people are using their mobile phones as their only means of telephone communication.  Federal and state regulations governing cell phone use is presenting itself to be a major barrier from the collections industry point of view.  What’s more is that cell phones offer caller ID and call blocking, with some new apps that completely block any calls from even registering on the phone.  These privacy options play a significant role in hampering access to debtors for the purposes of discussing debt resolution.

Additionally, both the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act have placed severe limitations on the use of automatic telephone dialing systems (or robocalling) and pre-recorded calls.  These restrictions have made it even more difficult for collection agencies to reach consumers by phone to discuss an outstanding debt.  

What this means for the collection industry is that new, multi-channeled ways of reaching consumers about their debt are necessary if successful negotiations are to be made.  Since technology is changing, the collections industry must change as well, and learn to use technological advances like online payment gateways allowing debtors 24/7 access to an account.  Giving debtors more ways to pay their debt, and alleviating the intrusion of phone calls, often has a greater impact on the actual repayment of that debt.  

In increasingly difficult economic times, more people are going to stop paying their debts.  It’s simply the harsh truth that the industry is facing.  However, adjusting debt collection practices to fit the needs and lifestyles of the consumers is a way to assure that debt collection takes place, rather than just a stream of unanswered, unreturned phone calls that wastes time and money. 

Can Debt Collectors Contact You via Social Media?

The Fair Debt Collections Practices Act (FDCPA) was designed in 1978 to protect consumers in debt collection practices.  Although the Act was written before Facebook and social media became the powerhouse it is today, it is still applicable to collection practices conducted through these methods.

 

According to Michelle Dunn, an author and 24-year veteran of the debt-collection industry, many collectors do try to set up a fake profile and ‘friend’ someone in order to find out more information that is relevant to their debt collection, such as employment, cell phone number, etc.  However, this practice is illegal in many states and Dunn discourages it because it involves impersonation.

 

The FDCPA doesn't explicitly forbid collectors from posting on your Facebook wall or Tweeting your relatives and friends to ask about where you are. However, when your privacy is violated, there are federal statutes that are broken, and the FDCPA does explicitly protect you from breech of privacy.

 

If you don’t want your social media information to be used by creditors, experts suggest the following steps to take:

1. Don’t avoid creditors.  If you don’t want to be contacted via mail or phone about the debt, simply return a letter to your creditor stating that you no longer wish to be contacted via a certain method.  They will be forced to comply, although they will be more inclined to sue at that point to recover the debt.

 

2. Use your privacy settings. Some people have their Facebook profiles set to completely public, allowing anyone who wants to access your profile full ability to do so.  If you are concerned about privacy and about creditors finding out information, then set your profile to completely private.

 

3. Avoid posting disclosing information about your job or cell phone number.  If you owe money and don’t want to be called by collectors, don’t allow this information to be public on your Facebook profile.  

Obama Relies on Debt Collectors Profiting From Student Loan Woe

With $67 billion of student loans in default, the Education Department is turning to private debt collection companies to recover student loan money.  In fact, the Education Department has already held meetings with consumer representatives to discuss the considerations of requiring debt collectors to offer payments based on income to defaulted borrowers who qualify. 

In a phone interview for Bloomberg News, Justin Hamilton, a spokesman for the Education Department, said, “We want to make sure we are striking the right balance between helping borrowers who have hit hard times and honoring our responsibility to be good stewards of taxpayer dollars.”

Student loans can rarely be discharged, even in bankruptcy.  This makes it difficult for borrowers to escape the debt, especially compared to debt from credit cards.  However, as an increasing number of borrowers have been hit with job loss, unforeseen medical expenses, and otherwise devastating economic circumstances, the government is working to recoup its money while helping the thousands of Americans who have met economic loss and are unable to pay their bills.  Since the government has funded many student loans with tax payer dollars, it can confiscate tax refunds, paychecks, and Social Security payments. 

   

Under these contracts between debt collectors and the Education Department, a defaulted student loan can be “rehabilitated” if a borrower makes nine payments in 10 months. These payments must be .75 percent of the loan’s total each month.  Collectors who are able to achieve this result from borrowers can make up to a 16% commission on the total amount of the loan.  If they are unable to achieve this amount, they are generally given a $150 administrative fee to hold the account and continue collection efforts on it. 

EpayWizard Takes Advantages of Social Media to Reach Out to Potential Clients

EpayWizard is using the services of the marketing department of Transformational Outsourcing, headed up by Robert Levin, to reach out to Accounts Receivable managers and educate them on what EpayWizard can do for them.  Using social media channels like Facebook, blogs, Twitter, LinkedIn, etc., Levin’s team is getting the word out to potential EpayWizard clients about how much they can befit from using EpayWizard’s services.  These benefits include saving money on postage and printing, as well as improving the accuracy of Accounts Receivables transactions on a daily basis. 

Every year, companies spend thousands of dollars on postage, paper, and printing for bills and account statements.  Not only is the process time-consuming and prone to human error - it’s costly, ineffective in some cases, and wasteful of everything from environmental resources to company dollars.  In a time when cutting costs and streamlining business processes are crucial to running a successful business, EpayWizard offers Accounts Receivable managers the opportunity to meet the need for more innovative and resourceful collection methods.  

Saving payroll and postage dollars is not the only benefit of our service, however.  In a time when a tough economy has force many businesses to rethink their strategy or shut down operations, EpayWizard offers better rates than the competition and it is the best way to improve your treasury accuracy and streamline your debt collection process.  It has been proven that more people prefer to pay their bills online, after work or at a time of day that is most convenient for them.  Your customers will appreciate the ease of accessing their account online 24 hours a day/ 7 days a week, and will show a higher rate of on-time payments, making your business run smoother, taking work off of the hands of your Accounts Receivables employees.