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. 

Debit Orders Can Increase Your Payment Collections

Payment collections are never easy but technology has certainly made the process less time-consuming and less costly.  In fact, the use of bulk payment collections through debit order payments has helped thousands of companies collect monthly payments from customers in a more organized way, allowing for greater certainty that payment will be made and that it will be made on time.

 

A debit order is a payment that is typically made once a month for the purposes of paying for a debt or on-going service.  It allows a business or creditor to collect money from a person’s bank account or credit card on a certain date of the month, with the permission of the account holder, and this payment is processed electronically.  The third party who initiates the debit order controls the amount that is debited each time but the bank account’s owner can still stop the debit order at any point with his or her bank.

   

One of the major differences between a debit order and a stop order is that when processing a debit order, the owner of the bank account gives the third party permission to take money out of the account.  The third party is the one who sets the amount to be withdrawn in a debit order, but in a stop order, the account holder sets the amount to be withdrawn.  Essentially, a debit order is a negotiation between the third party and the debtor (or customer) and is initiated by that third party, while a stop order is initiated by the holder of the bank account. 

Using debit orders for your businesses payment collections will not only help your business increase its revenue – it will also give you more control over the payments that come in, helping your bottom line and overall debt recovery. This is often as simple as incorporating web-based software in your debt recovery efforts to control and secure debit orders, EFT payments, and bad debt management solutions.