The Consumer Financial Protection Bureau in the US recently proposed rules that would lead to debtors being inundated with emails and text messages (The Independent, 8 May 2019). The usual method of chasing debt is via landline, which, according to the Bureau, is a method easy for people to ignore. The idea is that debt collectors will be able to harass debtors under the new proposals using channels such as WhatsApp, Facebook and other personal avenues.
Instead of hammering messages to people via their personal ‘channels’ such as email and social media, would it not be more prudent to embrace the debt collection software route and build relationships with vulnerable customers?
We are, whether the political landscape reveals this or not, actually going through a period of cultural awareness and appreciation of soft skills. These skills usually wrap themselves in comforting words such as empathy, personalisation and customer-centricity. You will find no disagreement here. These so-called soft skills will play a significant part in transforming how we do business, and how we interact with people across all industries. In a strangely ironic way, artificial intelligence and clever algorithms have the potential to help us be nicer to one another!
If we apply such thinking to the above example, we can counter aggressive lines of communication by providing a safe, secure environment for vulnerable customers to manage their own debt.
What about those who never settle their debts?
Sadly, you may have to keep chasing bad debtors until one of you gives up. On the other hand, there are people who genuinely want to pay back what they owe, but struggle to understand the process, the lines of communication, and perhaps lack the social or business skills to be able to negotiate the terms of debt recovery. You may find that these people, given the right tools and guidance, will better manage their debt themselves via self-serve software.
Given the opportunity, I think some of us would rather not talk to someone over the phone simply because we’re befuddled by what’s being said, or need more time to contemplate the options available to us before having to make a decision. If the customer can see how to manage their debt via a simplified dashboard, they have the time to consider their options and can negotiate the terms of their financial liabilities without being made to feel stupid, embarrassed or harassed.
Swing this to your side, as the debt collector, and you can benefit by being able to provide a better service. Instead of sending out dozens of text messages and emails that make you seem like the bailiffs banging on the door, you can build more personal relationships by becoming an active part of the vulnerable customer’s financial environment. You can offer guidance on the best options available, what they can afford to pay back, what timescales may suit them better, and can incentivise the collection process by offering to extend debt recovery time, or reduce interest rates.
There may be much more to The Independent’s story than meets the eye, but by entering into better lines of communication, and using a digital approach to help people manage their own debt, the collections process can be made more human with the help of software and soft skills.