Technology is a wonderful thing ... we can chat with friends in Singapore on Facebook, upload pictures from our smart phones to friends and family, access our bank accounts and send money or pay a bill at the touch of a button, or reach out and communicate with major brands from our computer. It's a shame the credit and collections industry hasn't figured out how to work in our brave, new world yet.
The Telephone Is Ringing...
At the heart of it, the credit and collections industry hasn't changed -- it is our role to communicate with customers, or former customers, to resolve problems, reduce risk, and recover outstanding funds on behalf of our company, or creditors who are our clients. Really, the human element shouldn't go away -- but things have changed from when 25 years ago when long-distance calls were a concern, call display was a luxury, letters had a stronger role in collections, and the internet was something that was used by Universities, not businesses.
The telephone is just as important as it ever was -- but the shape, function, and ability of that phone as owned by the consumer has changed dramatically.
The Land Line Is Going Away ... Whether You Like It Or Not
Recently, Virgin Mobile published a study showing that over 70% of people under 35 in North America have a cell phone and no landline, and it is a growing trend even in the commercial world. In Canada in 2012, the Canadian Wireless Telecommunications Association (CWTA) received a study from the Quorus Consuling Group. A number of interesting trends are shown in this sample study, including a rise in smart phone vs cell phone usage, a rise in the use of smart phones to do online banking, and a rise in households that exclusively used mobile phones.
If you are interested, the sample study can be viewed here: http://cwta.ca/wordpress/wp-content/uploads/2011/08/CWTA-2012ConsumerAttitudes1.pdf
This means that the credit and collections industries need to change to adapt to this growing trend -- if they do not change, they will find their methods outmoded and ineffective. This means adapting to email appends, the ability to send SMS texts to consumers, and having a work plan around communicating with mobile-friendly websites, payment portals, and offering other online payment options. It also means moving away from predictive dialers as consumers move to an increasingly mobile platform, and ensuring that they are attracting communication as intimidation and belligerence will become increasingly easy to ignore or avoid.
With Great Power Comes Great Responsibility
Manually calling 1,000 people would take a single person an entire week. Making 1,000 calls via predictive dialler or IVR campaign might take an hour. Sending 1,000 emails or SMS texts takes only an instant. Clearly the ease of communication through these channels is powerful. However, it may be subject to abuse because of ease.
For the last several years, there have been numerous horror stories from consumers of people being contacted 4-5 times a day by collection agencies -- and in almost every case, the complaint is tied to a predictive dialer system. Either the collection department doesn't understand how to manage their incredibly powerful dialler, or they are running the program at full throttle, not because they should, but because they *can*.
We should take the credit and collection climate in the US as a cautionary tale -- for our friends south of the border, there are several limiting laws under the FDCPA and TCPA preventing calls or texts to cell phones in most circumstances -- in America, the credit and collections industry is becoming increasingly neutered as consumers make the shift away from the landline. It is vitally important that does not happen in Canada, and to ensure that doesn't happen, it requires awareness, and consideration of this new channel of communication.
Most provincial legislation carries language to prevent passing the cost of communication to the debtor, or contacting a person more than three times in seven days. This is just reasonable common sense. There are also limiters on disclosing information surrounding a debt to an outside third party. Thus, while the subject of cell phone SMS texts and emails are completely unaddressed by our provincial legislation, we need to ensure the best business practices are carried out when communicating through these channels:
** Cell phone texts and emails need to be treated as unsecured communications and treated with the same precautions as would be used for a voice mail message on a household answering machine.
** The frequency of contact needs to be limited to no more than once every other business day, and preferably once every three business days, with an exception for return calls, emails, or texts.
** If we are told we have a wrong number, or a wrong email address, we must treat it as incorrect unless we can irrefutably prove otherwise.
If we do not use these tools responsibly, consumer reactions will drive political parties to amend our rules of conduct and collection laws, and prevent abuse -- case in point is the new Wireless Code established by the CRTC, which is a direct reaction to the perceived excessive contract terms and billing amounts set forth by wireless telecommunications companies.
Where Are My Two Sticks To Rub Together?
The other problem at the heart of it is that most CMS software platforms, especially in the collection industry, are antiquated. Telemarketing companies, US-based collection software platforms, and even most home-grown databases aren't built to facilitate this kind of communication -- but they need to.
Clear records of emails and texts sent back and forth need to be stored just as much as recorded telephone calls, and the best way to do that is have software platforms with these communication tools integrated. Not a patch, not an external vendor to perform these services, but an integrated tool as much as a telephone on a desk. The days of CUBS, Collect!, DebtMaster, ConnectSavvy, or other collection software platforms are not going to take us into the 21st century in Canada.
You Called Me -- Now What?
As part of the plan, we need to have options for mobile resolution when contact is finally made. Done are the days of the cheque in the mail. The Western Union Quick Collect service is antiquated and doesn't serve our needs any more. If you can reach someone on their mobile device, why can't they pay on their mobile device?
Credit and collections staff need to be equipped with online payment portals, to take payments by credit card, EFT, Interac e-Transfer, and online bill payments. And with many of these payment portals, the issue of information security becomes paramount. Solid policies need to be in place with the receipt, handling, and storage of personal banking information. PCI compliance, an understanding of the rules set forth by the Canadian Payment Association, and a foundation of good network security where electronic data or recorded telephone calls are necessary for authorization, but must be protected as a responsibility to the consumer.
So Who Is Going To Step Into The Future?
Our payment team receives notices via email every time a consumer inputs a payment to our secure payment website. We are now beta-testing rolling out a payment notification service via email to creditors. The daily mail delivery at our offices no longer represents the crux of our day. At our company, we are attempting to make the change to a mobile society, and we did so with little cost, discomfort, or complaint to ourselves or the consumers we talk to. It's still a changing environment, but we're trying to keep up with consumer habits, and it's working wonders for us and our clientele.
If you are interested in discussing mobile communication, texting, or email tools in credit and collections, I'm happy to talk to my fellow finance professionals. I can be reached directly at my office at 226-946-1730.
Kingston Data and Credit