Collecting Debt in a Post-COVID World

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​The COVID pandemic has dramatically changed the way American consumers travel, socialize, conduct business — and handle their debts.

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Collecting Debt in a Post-COVID World

How the Pandemic Has Changed
Debt Collection

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The COVID pandemic has dramatically changed the way American consumers travel, socialize, conduct business — and handle their debts.

With the economic downturn and mass layoffs, Americans are spending less and struggling more than ever. Unpredictable debt payment is to be expected in such uncertain times. Which is why debt collection practices are shifting, as well.
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Let’s take a look at how debt collection is changing as a result of this pandemic. 

Relationships Are Paramount

Collection agencies and their creditor clients are discovering that now—more than ever—the relationship with the consumer is paramount. So these relationships must be nurtured, even before payment begins. Chances of being paid greatly increase if there’s already a positive relationship with the consumer. To this end, a collector’s timing and tone are crucial.

It’s All in the Timing
Continual attempts to contact the patient or other consumer can backfire during times of extreme financial stress. This is where accurate data is invaluable.

In a post-pandemic world, knowing when a patient is most likely to be available to discuss his debt payment options has become increasingly important. It’s also important to know which consumers may have been adversely affected by the pandemic. This can require digging more deeply during the data gathering process.

Consumer data that is obsolete significantly hampers debt recovery efforts. It also weakens the collector’s ability to personalize the customer experience in order to pre-empt any future delinquency. Successful collectors keep their data continually refreshed and accurate, to ensure communications are appropriately timed.​

How’s Your Tone?
Controlling the tone of a collection call requires some finesse. It’s often helpful for collectors to remind themselves to smile, particularly at the beginning of the call. (See box at right.)

Listening with empathy is the next step toward helping patients understand that the creditor and collector are not their enemies. Then, validate their feelings and let them know your objective is the same as theirs:  to get them out of debt.
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These days, many consumers are feeling particularly anxious, angry or hopeless. And they may be suffering from issues that go way beyond their personal debt. So consideration plays a huge role in how collection calls will transpire. ​

Flexibility = Stability

Collection agencies and creditors who offer flexible, zero-percent-interest payment plans increase their chances of being paid. Patients and other consumers need the option of paying when they can and if they can.
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This may require adjusting or extending repayment terms, accommodating unpredictable income fluctuations, or deferring payments. Consumers tend to repay those debts they believe are most manageable.  Collectors who are the most flexible during uncertain economic times will be the most successful at recovering past-due debt.

When You’re Smiling

Some of the most successful customer service agents keep a mirror on their desk to remind themselves to smile.

The very act of smiling creates a more positive disposition and alters the tone of one’s voice. Physiologically, smiling raises the soft palate at the back of one’s mouth, generating more fluid sound waves and a warm, friendly voice.

During the course of a collections call, check your reflection periodically. If you look angry or tired, that will be conveyed in your voice.

Online Payment Portals

Increasingly, some patients may not wish to speak with a collections agent at all. Offering an online payment option empowers them to conveniently pay whenever and however they can, without having to speak with a representative.

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​The most effective payment portals allow consumers to defer payments, adjust payment terms, update their financial information and status, and dispute all or a portion of their debt. 

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No one can accurately predict how long the COVID pandemic will last. Debt repayments will continue to be inconsistent for the duration, especially as individuals receive intermittent governmental aid. Collectors who focus on nurturing consumer/patient relationships, remaining flexible, and offering detailed self-service options are the ones who will weather the storm.

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Sources:
Featured Image:  Adobe, License Granted
Inside ARM
Forbes
The Clinton Courier
Collection Hub